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08/12/2016

Greek parliament decides on Grexit tonight

Euro & Finance

Greek parliament decides on Grexit tonight

The Hellenic Parliament, Athens.

[European Parliament]

A compromise for a third bailout, which would allow Greece, to stay in the eurozone, is within reach. It is now up to the Greek parliament to have the final word: if Greece stays in the euro, and in the Union, or if it leaves. The vote takes place tonight, 10 to 11 July.

It is very likely that the European Commission, the International Monetary Fund and the European Central bank would give their green light tomorrow to a Greek reform plan, opening the way for a third bailout, which would eliminate the risk of the country leaving the eurozone.

This means that the entire political responsibility for Grexit would be borne by the Greek parliament, who will vote tonight to approve the proposals made Thursday night by the Greek parliament.

>> Read: Greece submits reform plan two hours before midnight deadline

The Greek people overwhelmingly said no to the creditors’ proposals in a referendum last Sunday. The irony is that the Greek parliament will vote on a reform plan which is in fact quite close to the proposals rejected by the popular vote.

Greek Prime Minister Alexis Tsipras appealed to his party’s lawmakers today to back the reforms package, urging them to help keep Greece in the euro.

“We are confronted with crucial decisions,” a government official quoted Tspiras telling his Syriza lawmakers.

“We got a mandate to bring a better deal than the ultimatum that the Eurogroup gave us, but certainly not a mandate to take Greece out of the eurozone,” he said. “We are all in this together.”

But hardline Syriza MPs are unlikely to vote in favour of the government’s proposal.

“We failed, we lost,” said leftist Syriza MP Alexis Mitropoulos today, referring to the new bailout proposals of the Greek coalition government.

“We are turning into a neoliberal party, urged to implement the most antisocial program,” he continued.

“We should not lead the country to a Grexit, because we are completely unable to handle it and we should not cause more harm to our people,” he stressed.

Syriza MP Kostas Lapavitsas went further, saying that Athens should start getting ready for a Grexit.

“It’s obvious that we cannot handle a Grexit. But we should get ready for that, as we will face it the next period of time.”

The latest bailout proposals sent to Brussels by the Greek government were not signed by leftist energy minister Panagiotis Lafazanis and Panos Kammenos, leader of the junior coalition partner, the Independent Greeks’ party.

“The new proposals are not compatible with our program,” Lafazanis said today, without elaborating on the position he will take during the voting procedure in the parliament.

For defense minister Panos Kammenos, two of his red lines have crossed, according to the new bailout proposal.

Conversely, Stavros Theodorakis the leader of the Potami party, who met with Commission President Jean-Claude Juncker yesterday, said that Potami would back the agreement. The centre left party has 17 MPs out of a total of 300 in the European Parliament.

Greece’s major opposition party, the centre-right New Democracy, also backed the proposals by the Tsipras government.

“The New Democracy party gives the prime minister not only the authorisation to reach an agreement, but also the mandate to avoid the country’s exit from Europe and the euro,” the party said in a statement.

EU officials said this morning that the Eurogroup meeting tomorrow, which starts at 3 pm, will be decisive. If the eurozone finance ministers give the thumbs up to the latest Greek proposal, the eurozone summit and the summit for all the 28 heads of state on Sunday, will be called off.

Conversely, if finance ministers reject the proposals, the two Sunday summits will discuss the Plan B, the official said, on how Greece can leave the eurozone. The assumption is that EU leaders will not overturn the decision taken by the Eurogroup.

The official added that with a positive outcome, six eurozone countries (Germany, Estonia, Austria, Slovakia, Finland and the Netherlands) are likely to have parliamentary votes on Monday and Tuesday.

Dijsselbloem said eurozone finance ministers may make a “major decision” when they hold a special meeting on Saturday to weigh the new Greek proposal.