The German parliament voted by an overwhelming majority Wednesday to back a third bailout for Greece, with Chancellor Angela Merkel spared a major rebellion of deputies opposing the aid.
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While 454 members of the Bundestag voted in favour of the 86-billion-euro (96-billion-dollar) bailout, 113 opposed it. The euro was up 0.2 per cent as of 12:14 p.m.in Berlin.
Eurozone finance ministers were on the verge of approving a third bail-out for Greece last night (Friday) after hardline creditors including Germany and Finland said they would back a deal.
The Bundestag backed the bailout with both the junior member of Merkel’s ruling coalition, the left-leaning Social Democrats, and the opposition Greens supporting the rescue plan.
“Of course, … after the experience of the past months and years, there are no guarantees that everything will work, and doubts are always permitted”, he told lawmakers, who were recalled from their summer vacation for the vote.
“But considering the fact that the Greek parliament already approved most of the (stipulated reform) measures, it would be irresponsible not to seize this chance for a new beginning in Greece“, he said to applause from the chamber as Merkel looked on.
Bailout opponents argue Greece is in a debt trap and that policy makers are bending euro-area rules to hold the currency union together.
Schaeuble, who last month told parliament that talks on the third bailout were a “last attempt” to solve the Greece crisis, threw his weight behind the package ahead of Wednesday’s vote and said Athens was ready to reform.
Decisions would be made in coming days, she said.
This – and a possible forced Greek exit from the euro zone – was narrowly averted at the end of June when Athens closed the banks for three weeks and imposed capital controls on money leaving the system.
The speculation has led to opposition accusations that Tsipras, who remains popular despite his U-turn on resisting austerity, wants elections simply to deal with his own internal rebellion.
But a revolt against leftwing PM Alexis Tsipras for agreeing to tax hikes and spending cuts demanded by global lenders, despite being elected in January on an anti-austerity ticket, could plunge the country into the uncertainty of fresh elections.
Merkel and Finance Minister Wolfgang Schaeuble will make the case for backing the bailout plan in party meetings on Tuesday.
Debt relief for Greece could result in a change in the Greek bailout, which is likely to require another vote in the Bundestag.
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Eurogroup President Jeroen Dijsselbloem said the EU and IMF would be able to find a compromise in the form of lower interest rates and longer repayment terms. Some of these have already been passed. “But it is not that we are seeing any sizeable return of mattress cash, not yet”.
