The German and Dutch parliaments are the last to vote on the €86 billion Greek bailout today (19 August). The Dutch government is likely to face a possible no confidence vote, while German Chancellor Angela Merkel’s coalition is expected to face a rebellion.
With a payment of about €3.2 billion due to the European Central Bank on 20 August, Greek Prime Minister Alexis Tsipras is counting on the approval from the euro-area parliaments before he can receive the first tranche from his country’s third bailout package, agreed on 13 July (see background).
The third bailout has already been approved by Greece’s parliament and the euro group finance ministers.
French lawmakers endorsed the bailout agreement in July.
Last week the Finnish Parliament gave the government the green light to approve the bailout. Lithuania’s cabinet approved the deal on Monday (17 August) and Latvia’s Parliamentary EU affairs committee passed the deal the same day. Yesterday, the parliaments of Austria, Estonia and Spain voted to approve the bailout.
National legislatures in Belgium, Cyprus, Ireland, Italy, Malta, Portugal, Slovakia and Slovenia don’t have to vote on the plan.
The biggest hurdle is expected to come from the Netherlands, where Prime Minister Mark Rutte is expected to face a call for a no-confidence vote from eurosceptic, right-wing rival Geert Wilders, when parliament debates the latest bailout program for Greece today (19 August).
During his 2012 election campaign, Rutte had vowed “not one cent more for Greece,” a sentiment endorsed by Wilders, Rutte’s People’s Party, and most Dutch voters.
Wilders has said that if the Dutch government agrees to contribute more to Greece, he will submit a motion of no confidence.
But the current bailout package was negotiated by Rutte’s finance minister, Jeroen Dijsselbloem of the centrist coalition’s Labour party. The motion is not expected to garner enough support to pass the 150-seat legislature.
Dangerous rebellion in Germany
German lawmakers are expected to vote overwhelmingly in favour of Greece’s third bailout today, even though Chancellor Angela Merkel faces a dangerous rebellion in her own party ranks that suggests she cannot ask parliament to help Athens again.
A significant minority of Merkel’s conservatives may vote against the bailout, sending the government a warning that the latest package is its last chance to keep debt-ridden Greece in the 19-country eurozone.
In a test ballot of conservative lawmakers late yesterday – a non-binding vote – a clear majority voted in favour of the bailout. Sixty of the 311 conservative lawmakers voted `no’ or abstained – fewer than a rebellion by as many as 120 MPs that had been feared.
Today’s vote will follow a debate scheduled to start at 09:00 AM (0700 GMT).
Merkel, oddly enough, is not expected to address the lawmakers. She will leave her highly respected finance minister, Wolfgang Schäuble, to speak for her government.
Last month, he argued that Athens should consider a “timeout” from the eurozone, before later telling parliament that talks on the third bailout were a “last attempt” to solve the crisis.
Schäuble threw his weight behind the package before Wednesday’s poll, and said Athens was ready to reform. Senior figures in the ruling coalition agreed.
“One has to recognise that the Greek government has in recent weeks made a lot of concessions that it rejected for months,” Gunther Krichbaum, conservative chairman of parliament’s Europe committee, told Reuters.
Last month, a record 65 lawmakers from the conservative camp broke ranks and refused to back negotiations on the bailout. Bild estimated that as many as 120 CDU and CSU members out of 311 might refuse to back the now-agreed deal.
Support from parties including the Social Democrats, Merkel’s junior coalition partner, and the opposition Greens means approval of the bailout is not in doubt. But a rebellion by a large number of her allies would be a blow for Merkel, who remains highly popular after 10 years in office.
Eurozone leaders reached an agreement on a programme to save Greece from bankruptcy after 17-hour talks on 13 July.
If approved by parliaments, this will be the third rescue programme for Greece in five years. It will be managed by the European Stability Mechanism (ESM), the eurozone permanent crisis resolution fund that was initially set up five years ago in an effort to save Athens from bankruptcy.
Here is a look at what Greece must do:
- Request continued support from the International Monetary Fund after its current IMF program expires in early 2016.
- Streamline consumer tax and broaden the tax base to increase revenue.
- Multiple reforms to the pension system to make it financially viable.
- Safeguard the independence of the country's statistics agency.
- Introduce laws by Wednesday that would ensure "quasi-automatic spending cuts" if the government misses its budget surplus targets.
- Overhaul the civil justice system to make it more efficient and reduce costs.
- Carry out product market reforms that include allowing stores to open on Sundays, broadening sales periods, opening up pharmacy ownership, reforming the bakeries and milk market and opening up closed and protected professions, including ferry transport.
- Privatise the electricity transmission network operator unless alternative measures with the same effect can be found.
- Overhaul the labour market. This includes reviewing collective bargaining, industrial action and collective dismissal regulations.
- Tackle banks' non-performing loans and strengthen bank governance.
- Significantly increase the privatization program, transferring 50 billion euros worth of Greek assets to an independent fund, based in Greece, to carry out the privatizations.
- Modernize, strengthen and reduce the costs of Greek administration.
- Allow members of the three institutions overseeing Greece’s reforms - the European Central Bank, IMF and European Commission, previously known as the 'troika" - to return to Athens. The government must consult with the institutions on all relevant draft legislation before submitting it to public consultation or to parliament.
- Reexamine, with a view to amend, legislation passed in the last six months that is deemed to have backtracked on previous bailout commitments.