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German MPs approve Greece bailout roadmap

AFP/The Local · 17 Jul 2015, 13:59

Published: 17 Jul 2015 08:09 GMT+02:00
Updated: 17 Jul 2015 13:59 GMT+02:00

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-  German parliament approves €86 billion rescue package for Greece
- Package passed with clear majorityof 359
-  Merkel tells parliament Greece must be kept in euro, with “chaos” the only other option

13.59 - A clear majority of the Bundestag have endorsed negotiation on a third bailout, with 439 voting for the motion and 119 voting against.

13.40 - Voting has started in the Bundestag.

12.15 - Thomas Oppermann, Chairman of the SPD parliamentary group, is showing a united front with the government. He is strongly critical of the US economists such as Paul Krugmann who have attacked German policy, describing them as “devious.”

He then goes on to lambast the opposition Green and Linke party's for flip-flopping on how they are going to vote.

He is particularly scathing about Die Linke, decrying their soon-to-be leader Sahra Wagenknecht's speech which preceded his as irresponsible, saying “It is just as well your influence over your partners in Syriza is so limited.”

Oppermann says that if things are to get better for the Greeks they must make their own economy more competitive.

He goes on to defend Schäuble against "unacceptable" criticism in social media and Greek media.

11.45 - Finance Minister Wolfgang Schäuble takes the podium: “Only the Greeks have gone back on pledges. That is the truth,” he says.

Greece had the highest growth in the eurozone, but that was destroyed by the Tsipras government, he argues.

Greece has the highest levels of bureaucracy in Europe in comparison with its national production.

The finance Minister had to pause on several occasions during his speech, and seemed to show the emotional strain of the past week sand months.

He reminded the audience that a debt reduction is against European law. That makes a new bailout a more difficult prospect, he said.

11:14 - Social Democratic Party (SPD) leader and Vice-Chancellor Sigmar Gabriel has finished addressing the Bundestag, saying that he was fully in favour of the Greece bailout plan.

"We say yes to opening negotiations over this third aid programme," he said, adding that so far Germany had not lost money but made loans and guarantees.

"We must do everything we can so that no money ever has to be sent [to Greece]," Gabriel said.

He agreed with Merkel that the Greece crisis risked the whole European project, saying that "the division [in the eurozone] would have led Europe into a much deeper crisis than simply a financial one."

With just one percent of the world's population and a position dependent on Europe, Gabriel said, "Germany can only have a voice in the 21st century world if it is a European one."

"This is about paying back a little of what we have got out of Europe over the last decades," he said.

"The greatest challenge is for Greece and the people there, because their country isn't just in a deep crisis, but it must change itself dramatically to get out of it," Gabriel said.

While he criticized the Greek government, Gabriel said that he was sympathetic to the fact that Greece was "struggling for its self-determination".

10:55 - Linke (Left party) leader Gregor Gysi had harsh words for Schäuble

“Herr Schäuble, I'm sorry to say it, but your role is to destroy the European idea. You are damaging our country, and you are doing it for the future.”

He also accused Gabriel and Merkel of simply going along with Schäuble's policies. “All three of you have made the worst mistake of your political career,” he claimed.

10:40 - After accepting the house's congratulations on her birthday, Merkel told a packed Bundestag (German parliament) chamber that Europe was a "community of laws", a "community of responsibilities," but also a "community of destiny"

She said that that pushing past the Greek crisis would let Europe face up to the economic and foreign policy challenges of the future, picking out Ukraine and Isis for special mention.

The Chancellor said that Germany and Europe must try this final chance to keep Greece in the euro, as the alternative was "foreseeable chaos" in the country.

She had begun her address by calling on lawmakers to imagine if the situation in Greece were reproduced in Germany, with lines of pensioners standing outside the bank waiting for the limited amount of currency they were allowed to withdraw.

But she quickly segued into a criticism of Greece's government led by the radical left Syriza party of Prime Minister Alexis Tsipras.

Tsipras had promised voters both an end to externally-imposed austerity measures and that Greece would remain in the eurozone – two incompatible aims, she argued.

But she reminded MPs that "compromise is to Europe what air is to a person", saying that Germany had overcome differences with other nations – name-checking France – and thanking Finance Minister Wolfgang Schäuble for his long hours at Brussels' negotiating tables, to rapturous applause.

"We are doing this for people in Greece, but also for people in Germany," she concluded, noting that "when Europe – all of Europe – is strong, then Germany is strong."

"My answer, with all my conviction, is yes," she said, before sitting down to loud applause.

08:00 - Germany the decisive vote

Germany is one of several eurozone states that must give the green light to the €86 billion rescue package agreed this week to save Greece from financial collapse, its third bailout in five years.

Merkel had yesterday  told conservative lawmakers - some of whom are refusing to back more aid for crisis-hit Greece - she was "absolutely convinced" the new reform package was the way forward.

The measure is expected to pass with a clear majority in the Bundestag on Friday, even if Merkel is facing growing disaffection in the ranks of her Christian Democratic Union (CDU) and their Christian Social Union (CSU) allies over lending more money to the country.

The vote comes after European Central Bank chief Mario Draghi agreed to increase a vital cash lifeline to Greece's struggling banks that will allow them to open their doors for the first time in almost three weeks on Monday.

Athens shuttered banks and imposed capital controls at the end of last month limiting withdrawls to €60 a day, bringing the economy to a virtual standstill and forcing Greeks to queue for hours for cash.

"From Monday, citizens can go to the bank counters and make any kind of transaction," Deputy Finance Minister Dimitris Mardas told ERT public television late Thursday.

Meanwhile, eurozone ministers approved the launch of vital bridge financing and more bailout talks after lawmakers in Athens grudgingly passed tough reforms to taxes, pensions and labour rules demanded by creditors.

"The Eurogroup welcomes the adoption by the Greek Parliament of all the commitments specified in the Euro Summit statement" reached in marathon talks last weekend, the eurozone's finance ministers said.

The European Commission, the bloc's executive arm, agreed in theory to grant Greece a three-month €7 billion bridging loan to keep its economy afloat until its new bailout is ratified.

Debt relief in vote

The vote in Germany - Greece's biggest EU creditor and the driver of austerity in the bloc - is due to start at 10 am and is expected to be a far stormier than in France and Finland, which have already approved the deal.

Story continues below…

Finance Minister Wolfgang Schäuble, who has been panned in Greece for his hard line in months of debt talks, has urged lawmakers to back the reform package, but remained intransigent on any further debt relief.

"A real debt haircut is irreconcilable with membership in a monetary union," Schäuble insisted on Deutschlandfunk public radio. The IMF, one of Greece's creditors alongside the EU and the ECB, caused a stir with a bombshell report criticising the deal and warning that lenders would have to go "far beyond" existing estimates for debt relief.

And on Thursday Draghi added his voice to calls for debt relief for Greece - whose debts amount to 180 percent of economic output - saying the main question at this stage was what form this relief should take.

Athens has already failed to make two key payments to the International Monetary Fund and its next debt deadline is a €4.2-billion payment to the ECB itself on July 20, a deadline Draghi said he was sure would be met.

Speaking in Frankfurt, the ECB chief also said the conditions were "in place" to raise the ceiling on the Emergency Liquidity Assistance (ELA) available to Greek banks, despite questions about their solvency.

The ELA - which has kept Greek banks, and by extension the economy, afloat - has been fixed at around €89 billion euros since late June, but would be topped up with an additional €900 million euros, Draghi said.

Syriza 'bruised'

Greek Prime Minister Alexis Tsipras on Wednesday faced down a major mutiny in his radical left Syriza party and violent protests in the streets of Athens to win parliamentary approval for the tough reforms by creditors.

Tsipras said the 32 MPs from his own Syriza party who had voted against the package had contradicted "the principles of friendship and solidarity at a critical time," and left the party "bruised," a government source quoted him as saying.

But the Eurogroup, led by the no-nonsense Dutch Finance Minister Jeroen Dijsselbloem, was encouraged by the outcome.
Dijsselbloem said the raft of reforms approved by the Greek parliament were a first step to "start to rebuild trust" as he called for urgent foreign investment to help Greece's debt-ridden economy return to growth.

A spokeswoman for the European Commission said the vote was "an important step toward rebuilding trust with Greece's international partners".

The EU's executive arm also green-lighted a bridging loan for Greece through an EU-wide crisis fund to hold Athens over until its new bailout is ratified. A compromise agreement is expected to be finalised on Friday.

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AFP/The Local (news@thelocal.de)

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