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11/12/2016

German parliament approves Greek bailout extension

Euro & Finance

German parliament approves Greek bailout extension

Germany’s parliament approved an extension of Greece’s bailout on Friday after Finance Minister Wolfgang Schauble, who has voiced doubts about whether Athens can be trusted, promised it would not be allowed to “blackmail” its euro zone partners.

With 542 lawmakers voting in favour, including almost all of Chancellor Angela Merkel’s right-left coalition plus the opposition Greens, it was the biggest majority for any euro zone rescue package so far in the 631-seat chamber.

The Bundestag vote was the only major parliamentary hurdle for a four-month extension to the bailout programme for the most heavily-indebted country in the single currency zone.

>>Read: Schäuble: “It is not only about individual countries, it is about Europe”

Greece’s economy contracted more than originally estimated in the last quarter of 2014 compared with the previous three-month period, a revised estimate by the ELSTAT statistics service showed on Friday.

The estimate of gross domestic product, based on seasonally adjusted data, showed the economy shrank 0.4 percent in October to December. This was worse than a flash estimate of a 0.2 percent drop made earlier this month, and growth of 0.7 percent in the third quarter.

Greece’s economic boom of the early 2000s ended with the country sinking into a recession after a global credit crunch. A subsequent debt crisis and austerity imposed by the international lenders who bailed out the country deepened the recession, wiping out a quarter of the economy over six years.