Greece's bailout passes final hurdles

2015-08-19 19:01

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Berlin/Brussels - Greece's third bailout in five years cleared its final hurdles on Wednesday after the German and Dutch parliaments backed the €86bn ($96bn) rescue plan for cash-strapped Athens.

Following the parliamentary votes, eurozone finance ministers are expected to approve the first bailout tranche totalling €26bn in a conference call late on Wednesday.

Greece is set to receive the first €13bn in time to meet Thursday's deadline for repaying a loan to the European Central Bank worth about €3.4bn. 

A further €10bn will be set aside to deal with ailing Greek banks, while the remaining €3bn are due to be disbursed to Athens in return for reform progress over the coming months.

The three-year bailout package also won parliamentary approval in Spain, Estonia, Austria, Latvia, Lithuania and Finland this week.

Both the Netherlands and Germany have taken hardline stances in the bailout negotiations with Athens, which came after six months of acrimonious talks that nearly resulted in Greece crashing out of the eurozone.

There is widespread scepticism among both German and Dutch voters to pumping more taxpayers' money into Greece.

Dutch Prime Minister Mark Rutte secured parliamentary backing for Greece's bailout after the small liberal opposition party D66 joined his conservative Liberal Party and its Social Democrat Party coalition partner to support the rescue plan.

The overwhelming majority of the German parliament also voted in favour of the Greek aid programme, despite Chancellor Angela Merkel also failing to rally more support from her conservative bloc.

While 453 members of the Bundestag voted in favour of handing Greece fresh aid, 113 opposed it. A further 18 abstained on Wednesday.

However, the number of lawmakers from Merkel's Christian Democratic Union (CDU) and its Bavaria-based sister party, the Christian Social Union (CSU) voting "no" to the bailout climbed to a record 63 - about one fifth of the chancellor's 311-strong parliamentary faction.

A total of 47 of the 631-member Bundestag were not present for the vote.

Four weeks ago, 60 CDU-CSU members rejected launching the bailout negotiations with Greece.

Still, the scale of the rebellion in CDU-CSU ranks was less than feared after Merkel joined her minister of finance, Wolfgang Schäuble, in lobbying hard to contain the number of "no" votes in Wednesday's debate on Greek aid.  

The bailout was in "the interests of Greece and Europe", Schäuble told the Bundestag. Germany's was the largest contributor to the two previous Greek bailouts.

But he also warned of the risks contained in the bailout after Athens was criticised by German political leaders for dragging its feet in introducing reforms agreed to under its two previous rescue plans.

"Of course, ... after the experience of the past months and years, there are no guarantees that everything will work, and doubts are always permitted," he told lawmakers, who were recalled from their summer vacation for the vote.

"But given the fact that the Greek Parliament has already adopted a large part of the measures, it would be irresponsible not to use the chance for a new beginning in Greece," he said.

Despite the chunk of CDU-CSU lawmakers rejecting the bailout, Bundestag backing for the aid package was always a foregone conclusion.

Both the junior member of Merkel's ruling coalition, the left-leaning Social Democrats, and the opposition Greens had signalled their intention to support the rescue plan.

However, four SPD member voted "no", including Peer Steinbrueck, who stood as the party's chancellor candidate in the last national elections in 2013.

One Green lawmaker also voted no. A total of 15 Green and SPD members abstained in the vote.

Merkel's CDU-led ruling coalition has an 80% majority in the Bundestag.

The votes in eurozone national parliaments came after Greek Prime Minister Alexis Tsipras last week secured the backing of the parliament in Athens for the package of tax, pension and fiscal reforms as well privatization measures that were conditions for his hard-left led government receiving the new bailout.

Read more on:    eu  |  germany  |  the netherlands  |  greece

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