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Greece debt crisis: MPs debate tough new laws | Greece debt crisis: MPs debate tough new laws |
(35 minutes later) | |
Greece's MPs are debating tough economic measures they must approve by the end of the day in order for a eurozone bailout deal to go ahead. | Greece's MPs are debating tough economic measures they must approve by the end of the day in order for a eurozone bailout deal to go ahead. |
The possible €86bn bailout was agreed on Monday, though one of Greece's creditors, the International Monetary Fund, says it does not go far enough. | The possible €86bn bailout was agreed on Monday, though one of Greece's creditors, the International Monetary Fund, says it does not go far enough. |
The deal requires Greece to increase taxes and raise the retirement age. | The deal requires Greece to increase taxes and raise the retirement age. |
Greek PM Alexis Tspiras said he does not believe in the deal, though he agreed to it. | Greek PM Alexis Tspiras said he does not believe in the deal, though he agreed to it. |
In a TV address on Tuesday, Mr Tspiras called the proposals "irrational" but said he was willing to implement them to "avoid disaster for the country" and the collapse of the banks. | In a TV address on Tuesday, Mr Tspiras called the proposals "irrational" but said he was willing to implement them to "avoid disaster for the country" and the collapse of the banks. |
Follow the latest updates here | Follow the latest updates here |
In order to receive €86bn (£61bn; $95bn) from the EU over three years, Greek MPs on Wednesday need to approve: | In order to receive €86bn (£61bn; $95bn) from the EU over three years, Greek MPs on Wednesday need to approve: |
The IMF report was written before the eurozone reached a deal with Greece in the early hours of Monday, and was shared with eurozone leaders in advance, but was made public only on Tuesday. | The IMF report was written before the eurozone reached a deal with Greece in the early hours of Monday, and was shared with eurozone leaders in advance, but was made public only on Tuesday. |
It predicts that, in two years' time, Greek debt will reach close to 200% of GDP (national income) which could "only be made sustainable through debt relief measures that go far beyond what Europe has been willing to consider so far". | |
It recommends a "very dramatic extension" on the maturity of Greece's debts, "with grace periods of, say, 30 years on the entire stock of European debt". | It recommends a "very dramatic extension" on the maturity of Greece's debts, "with grace periods of, say, 30 years on the entire stock of European debt". |
"Other options," it says, "include explicit annual transfers to the Greek budget or deep upfront haircuts (debt write-offs)". | |
Politics beats economics - by Chris Morris, BBC News, Brussels | Politics beats economics - by Chris Morris, BBC News, Brussels |
The IMF report highlights a massive flaw in the deal hammered out so painfully between Greece and the rest of the eurozone: the numbers don't add up. | The IMF report highlights a massive flaw in the deal hammered out so painfully between Greece and the rest of the eurozone: the numbers don't add up. |
It believes that without a restructuring of the Greek debt, it will keep on rising. | |
But the point about this deal is once again in the eurozone, it was a case of politics trumping economics. | |
The desire to keep the eurozone together was stronger (for now) than the economic forces threatening to pull it apart. | The desire to keep the eurozone together was stronger (for now) than the economic forces threatening to pull it apart. |
There was plenty of talk about debt restructuring during the negotiating process, but not on the scale that the IMF is suggesting. | There was plenty of talk about debt restructuring during the negotiating process, but not on the scale that the IMF is suggesting. |
Officially, there will be a discussion of restructuring only after a first review of the new bailout is successfully concluded. | Officially, there will be a discussion of restructuring only after a first review of the new bailout is successfully concluded. |
That is several months down the line. | That is several months down the line. |
But, while the IMF report doesn't comment directly on Monday's deal (because the report had already been written by then), it certainly implies that the IMF may feel it is unable to take part in the new bailout programme for Greece. | But, while the IMF report doesn't comment directly on Monday's deal (because the report had already been written by then), it certainly implies that the IMF may feel it is unable to take part in the new bailout programme for Greece. |
And that would leave a large hole - both in terms of numbers and political credibility. | And that would leave a large hole - both in terms of numbers and political credibility. |
Germany, the largest contributor to Greek rescue funds, and a number of other eurozone countries have long resisted any talk of haircuts and debt relief. | Germany, the largest contributor to Greek rescue funds, and a number of other eurozone countries have long resisted any talk of haircuts and debt relief. |
Monday's announcement was met with anger among many in Greece who called the deal a "humiliation". | Monday's announcement was met with anger among many in Greece who called the deal a "humiliation". |
Despite this, Greece - whose economy has shrunk by 25% in the last five years - is expected to pass new legislation in parliament on Wednesday. | Despite this, Greece - whose economy has shrunk by 25% in the last five years - is expected to pass new legislation in parliament on Wednesday. |
Three pro-European opposition parties have pledged to vote for the measures. | Three pro-European opposition parties have pledged to vote for the measures. |
However, hardliners in Mr Tsipras' own Syriza party are likely to rebel and the junior coalition party, the Independent Greeks, have offered only limited support for the reforms. | |
As parliamentary committees considered the details of the laws, Deputy Finance Minister and Syriza member Nadia Valavani announced her resignation, saying: "I'm not going to vote for this amendment, and this means I cannot stay in the government." | |
And tempers flared when former Finance Minister Yanis Varoufakis was heckled with shouts of "You got us here" while addressing one committee. | |
The jeers came when he said he doubted the deal could work, and compared it to the conditions imposed on Germany in the Treaty of Versailles after World War One. | The jeers came when he said he doubted the deal could work, and compared it to the conditions imposed on Germany in the Treaty of Versailles after World War One. |
Opponents of the deal took to the streets of Athens ahead of the vote, and unions and trade associations representing civil servants, municipal workers and pharmacy owners held strike action. | Opponents of the deal took to the streets of Athens ahead of the vote, and unions and trade associations representing civil servants, municipal workers and pharmacy owners held strike action. |
Greece faces an immediate cash crisis. Banks have been shut since 29 June. | Greece faces an immediate cash crisis. Banks have been shut since 29 June. |
Mr Tsipras warned banks are unlikely to reopen until the bailout deal is ratified, and this could take another month. | Mr Tsipras warned banks are unlikely to reopen until the bailout deal is ratified, and this could take another month. |
The European Commission has formally proposed a short-term €7bn loan for Greece through the EU-wide European Financial Stability Mechanism (EFSM). | The European Commission has formally proposed a short-term €7bn loan for Greece through the EU-wide European Financial Stability Mechanism (EFSM). |
Use of the EFSM for eurozone rescues has been opposed by Britain and other countries which are not part of the euro but are European Union members. | Use of the EFSM for eurozone rescues has been opposed by Britain and other countries which are not part of the euro but are European Union members. |
But one British official in Brussels told the BBC the UK government had no objection in principle to the use of the EFSM as long as British taxpayers' money is ring-fenced from any liability. | But one British official in Brussels told the BBC the UK government had no objection in principle to the use of the EFSM as long as British taxpayers' money is ring-fenced from any liability. |
Valdis Dombrovskis, a senior European Commission official, said the EC was working to protect non-euro states from any negative financial consequences should the loan not be repaid. | Valdis Dombrovskis, a senior European Commission official, said the EC was working to protect non-euro states from any negative financial consequences should the loan not be repaid. |