Home Business Greece Bailout: German Parliament to Vote on €86 Billion Bailout Deal

Greece Bailout: German Parliament to Vote on €86 Billion Bailout Deal

German parliament is debating a motion on whether to allow negotiations on Greece’s €86 billion bailout deal.

Opening the debate, Chancellor Angela Merkel warned of “predictable chaos” if deputies did not back the plan.

The deal is expected to be passed despite opposition from the left and some members of Angela Merkel’s conservative party.

Greece’s parliament has already voted in favor of hard-hitting austerity measures required for a third bailout deal.

On July 16, the European Central Bank (ECB) raised the level of emergency funding available. This has paved the way for Greek banks, which shut nearly three weeks ago, to reopen on July 20.

However, credit controls limiting cash withdrawals to €60 a day will only be eased gradually, officials say.

Eurozone ministers have also agreed a €7 billion bridging loan from an EU-wide fund to keep finances afloat.German Parliament votes on Greece bailout deal

Chancellor Angela Merkel told German lawmakers ahead of today’s vote that the deal was hard for all sides, but said it was the “last” attempt to resolve the crisis.

“We would be grossly negligent, indeed acting irresponsibly if we did not at least try this path,” she said.

A number of eurozone countries require parliamentary approval to go ahead with bailout talks, including Austria, which is also voting on July 17. Both the French and Finnish parliaments have already backed the deal.

Meanwhile, there have been fresh calls for Greek debt relief measures from International Monetary Fund (IMF) chief Christine Lagarde – echoing a call from Greek PM Alexis Tsipras.

Christine Lagarde told France’s Europe 1 the IMF would participate in a “complete” Greek package that includes debt restructuring, as well as an “in-depth reform” of the Greek economy.

Greece has debts of €320 billion and is seeking its third international bailout. Last month it became the first developed country to fail to make a repayment on a loan from the IMF.

The Greek bank closures have been one of the most visible signs of the crisis.

From July 20, a weekly limit on withdrawals may replace a daily cap, Greek Deputy Finance Minister Dimitris Mardas suggested.

“If someone doesn’t want to take €60 on Monday and wants to take it on Tuesday, for instance, they can withdraw €120, or €180 on Wednesday,” he told Greek ERT television.

The announcements from the ECB and the Eurogroup came after Greek lawmakers passed tough reforms on taxes, pensions and labor rules as part of the new bailout deal.

A rise in value added tax (VAT) from 13% to 23% will kick in on July 20, affecting food and drink in restaurants, taxi fares, selected supermarket items, public transport and plane and ferry tickets.

PM Alexis Tsipras faced opposition to the deal from lawmakers within his left Syriza party. He is widely expected to announce a cabinet reshuffle on July 17.