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ATHENS — Greece headed toward a critical vote Wednesday night on its bailout package as its creditors renewed a divisive debate over giving the country a break on its debt.
ATHENS — After a marathon session that stretched into the early hours of Thursday, Greek lawmakers narrowly approved a package of harsh austerity measures and economic policy changes that were required by its creditors as the terms of a $94 billion bailout package.
A day after the International Monetary Fund signaled that it might not back the new bailout unless the pact substantially reduced the debt burden on Athens, Greece remained committed to taking the first formal step required of it under the plan it negotiated over the weekend with its European creditors: giving parliamentary approval to a package of economic policy changes long opposed by the left-wing government of Prime Minister Alexis Tsipras.
In Greece’s through-the-looking-glass politics, the vote was seen as a victory for the country’s prime minister, Alexis Tsipras. He was elected on an anti-austerity platform but strongly urged lawmakers to approve the bailout, even after Greeks voted down a similar deal just over a week ago in a referendum he called for.
The I.M.F.’s stance aligned it with Mr. Tsipras on the question of debt reduction and provided him with new ammunition to argue that the bailout plan does not do enough to get the Greek economy back on its feet. But with Greece teetering on the edge of insolvency and its banks closed, Athens moved ahead with the planned vote, required to unlock the aid necessary to meet a debt payment on Monday, put its banks on sounder footing and negotiate a three-year package that would provide it with as much as 86 billion euros, or about $94 billion, in assistance.
That left only the International Monetary Fund’s insistence on debt relief for Greece as the last hurdle to the package, which would head off insolvency, the collapse of the banking system and the country’s exit from the euro.
Despite a revolt by some in his party, it seemed Mr. Tsipras would have the votes necessary to pass the measures in Parliament, even though he said in an interview on state radio on Tuesday that he considered the agreement flawed. He said the alternative — Greece’s being forced out of the eurozone — was the greater evil.
As lawmakers engaged in a bitter debate throughout the day Wednesday, protesters threw firebombs in the square outside and shouted anti-austerity slogans. But the demonstration, the first since Mr. Tsipras and his Syriza party came to power in January, quieted down rather quickly.
“I take full responsibility for mistakes and for signing a document that I don’t believe in but must implement,” Mr. Tsipras said.
Dimitrios Papadimoulis, a member of the European Parliament from Mr. Tsipras’s Syriza party who is close to the prime minister, said that the fund’s position could be helpful in the long run but did not make Wednesday’s parliamentary vote any less urgent. The I.M.F. position would provide an “additional argument” for reducing his country’s debt payments, he said, but right now Greece needed to “stay alive” and approve the measures demanded by its European creditors.
Yet there were also indications that the I.M.F.’s stance might give new vigor to those opposed to the bailout terms and intensify the political challenge facing Mr. Tsipras in keeping Syriza united. On Wednesday night, the police fired tear gas into crowds of anti-austerity protesters outside the Parliament building.
“There are new facts that need to be taken into account,” said Zoe Konstantopoulou, the speaker of Parliament, referring to the I.M.F. position.
“It’s the duty of Parliament not to allow this blackmail against the government and Parliament to be completed,” she added, referring to the first set of austerity measures, including tax increases and pension cuts, which the creditors have insisted be voted into law by Wednesday night.
The I.M.F.’s public signal on Tuesday that it supports steps like forgiving some of Greece’s debt or putting a three-decade moratorium on debt payments put it in conflict with the country’s European creditors. The deal announced Monday morning after a weekend of contentious negotiations stated that the creditors would not forgive any Greek debt and offered only a general assurance of further discussions about reducing annual debt payments by stretching out payment periods or reducing interest rates. The bailout would be the third for Greece in five years and would involve new loans from the other countries that use the euro, the European Central Bank and the I.M.F.
The fund’s decision to go public with its stance suggested that the draft agreement would be only the starting point for further negotiations about the sustainability of Greece’s debt and the willingness of its lenders to recognize that they might not get all their money back. Greece and its creditors will begin negotiating the details of the bailout and any debt relief once Athens gives parliamentary approval to the required policy changes and other European nations ratify their involvement in new talks. French legislators gave their assent on Wednesday, and Germany could take up the issue as soon as Friday.
In Athens, tensions flared at times as Parliament prepared to vote on the measures. When the controversial former finance minister, Yanis Varoufakis, took the floor to compare the deal reached over the weekend in Brussels to the Treaty of Versailles, one member of the center Right Democracy Party interrupted him to shout, “You ruined the country.” Mr. Varoufakis, who along with Mr. Tsipras had taken a confrontational stance with the creditors, has said he would not vote for the legislation.
During preliminary hearings, opposition party members took turns blaming Mr. Tsipras for the current state of affairs, but vowed to vote for the measures. Harry Theoharris, a member of the centrist To Potami party, said that 10 years from now students would be studying the events of today and “how we shot ourselves and then started whining for a disability benefit.”
On Wednesday night, the police fired tear gas into crowds of anti-austerity demonstrators outside the Parliament building after a peaceful rally turned chaotic, with firebombs and rock-throwing. One witness said youths had come out of nowhere, throwing what appeared to be Molotov cocktails without provocation and prompting crowds to flee. The confrontation calmed down later, and the police said there had been a number of arrests.
If nothing else, Greeks took some solace from the idea that the I.M.F. statement would help them keep attention focused on the issue of the debt, which Greece has long maintained is so heavy a burden that it chokes off hope of any strong economic recovery and forces unjustifiably deep cuts in government spending.
“Certainly this issue is also going to be part of the discussions, negotiations when we’ll be discussing the memorandum of understanding, when we will be really preparing the third Greek program,” Valdis Dombrovskis, a vice president of the European Commission responsible for the euro, told the news media in Brussels.
The I.M.F.’s position highlighted a rift between European countries. Some, including Germany, are adamantly against writing off any of Greece’s debt of more than €300 billion, or about $330 billion. Others, including France, have stressed the need to reduce Greece’s debt payments to a more realistic and sustainable level, if not by forgiving any of the debt then by extending the payment schedule or cutting interest rates.
The French government, which has played a central role in efforts to keep Greece in the eurozone, said it welcomed the fund’s comments.
“The I.M.F. is saying the same thing that we are,” Michel Sapin, the French finance minister, told BFM television on Wednesday. “That we have to help Greece, but that we can’t do it if we maintain the same repayment burden on the Greek economy.”
Wolfgang Schäuble, the German finance minister, has been one of the most hard-line opponents of debt relief for Greece.
He indicated on Tuesday that there was continued resistance in the German government to the deal hammered out over the weekend and a willingness to consider whether it might be better for Greece to leave the eurozone.
Chancellor Angela Merkel of Germany has ruled out writing off any of Greece’s debt, but has left the door open to renegotiating the terms for paying it back, suggesting that there remained grounds for a compromise. German officials have maintained that the easing of Greece’s debt repayments could be addressed only through further negotiations that would follow Greek parliamentary approval of the creditors’ current demands.
The I.M.F. made its views known on Tuesday by releasing a report that it had submitted to eurozone officials last weekend, in which it stated that Greece’s debt load was unsustainable. The fund proposed other measures, including giving Athens a 30-year grace period before having to make any payments. Later Tuesday, a senior I.M.F. official told reporters that the fund could not put its support or money behind any bailout agreement that did not ensure that Greece would be able to repay its loans.
Greece, which is already €2 billion in arrears to the I.M.F. because of two loan payments it recently missed, faces a crucial deadline on Monday, when it must make a payment of €4.25 billion on bonds held by the European Central Bank.
The Greek government will probably be unable to make the payment unless it can secure some sort of temporary financing from the eurozone creditors. Failure to repay the money might force the central bank to withdraw the emergency support that has been propping up Greek banks. If the banks fail, it would only intensify the downward spiral of the Greek economy.
