German MPs back Greece bailout plan
What you need to know:
- Despite scepticism, German lawmakers voted to approve Greece’s hard-won bailout extension in a parliament vote, removing the last hurdle for keeping crucial international aid flowing to Athens.
- Berlin’s unwaveringly hard line on the need for debt-wracked Greece to stick to economic reforms in return for aid is shared in other capitals from Helsinki to previous bailout recipients Madrid and Lisbon.
- Germany is Greece’s only eurozone partner to hold a parliamentary vote on granting Athens the breathing space, aimed at averting a potentially calamitous deadline on Saturday that could have sparked a Greek euro exit.
The parliament in Germany, Europe’s largest economy and effective paymaster, on Friday overwhelmingly backed a four-month extension of Greece’s bailout programme by international creditors.
The “yes” vote — which came despite widespread scepticism in Germany over whether Athens will repay its debts — was expected after Chancellor Angela Merkel’s left-right “grand coalition” and small opposition parties all voiced support.
The lower house vote was passed with 542 votes in favour, against 32 “no” votes and with 13 abstentions.
Despite scepticism, German lawmakers voted to approve Greece’s hard-won bailout extension in a parliament vote, removing the last hurdle for keeping crucial international aid flowing to Athens.
Berlin’s unwaveringly hard line on the need for debt-wracked Greece to stick to economic reforms in return for aid is shared in other capitals from Helsinki to previous bailout recipients Madrid and Lisbon.
But tough talk from Europe’s effective paymaster has sparked bitter exchanges with Athens since elections last month ushered in the hard-left government of Prime Minister Alexis Tspiras on a wave of anger at years of austerity cuts.
Pressure from Greece’s debt of 320 billion euros ($365 billion) — equivalent to 175 per cent of its annual economic output — is so severe that Tspiras wants to renegotiate repayment obligations during the four-month bailout extension clinched Tuesday after gruelling negotiations with creditors.
Germany is Greece’s only eurozone partner to hold a parliamentary vote on granting Athens the breathing space, aimed at averting a potentially calamitous deadline on Saturday that could have sparked a Greek euro exit.
Greek Finance Minister Yanis Varoufakis, a frank economics professor, again raised temperatures in Germany by calling Wednesday for a discussion to “begin immediately” on renegotiating the mountain of debt.
After Athens already secured a 100-billion-euro write-down of its debt to private creditors and two bailouts of 240 billion euros, Schaeuble expressed “disbelief” Thursday at the very suggestion.
