The reforms to the judiciary and banking systems were the final hurdle the financially-battered country was obliged to clear before it can start talks with its creditors on a third bailout worth around 85 billion euro (£59.5bn).
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In a passionate speech to the chamber, Tsipras argued Greece had to adapt to the “new realities” of the agreement if it wanted to avoid a default on its debts and a messy exit from the euro.
Government spokeswoman Olga Gerovassili admitted the government was facing a “political problem” and said “planned procedures” would be implemented to address it. Several MPs of the ruling Syriza party voted against the new deal with the country’s creditors.
A repeat of last week’s rebellion by lawmakers in Tsipras’ left-wing Syriza party is unlikely given the non-controversial nature of the reforms: revamping the civil law code to streamline legal proceedings and adopting EU regulations on guaranteeing bank deposits and strengthening banks. But that is still roughly a quarter of all party lawmakers.
“We have stability here: Reliable taxation, sound legislation and a positive environment”, said Ioannis Politis, manager of Greek hygiene products company Septona, which established a plant in the northern Bulgarian city of Ruse 10 years ago. The Athens Stock Exchange, multilateral trading facility and electronic secondary market for bonds have been closed since June 29, when the government issued a decree imposing capital controls and a forced bank holiday.
Former finance minister Yanis Varoufakis voted with the government this time, explaining on website The Press Project that it was important to preserve government unity even if the European Union’s bailout programme for Greece was “designed to fail”.
The bill passed by a resounding 230 votes out of the 298 members of parliament present, after a marathon five-hour debate that nonetheless exposed deep divisions in the governing Syriza party over whether to accept more austerity.
The two sides are under enormous pressure to hammer out the rescue deal before August 20, when Athens is scheduled to make a loan repayment of €3.2 billion to the European Central Bank that it can not now afford.
Despite the unpopularity of the austerity measures within Greece, Mr Tsipras still commands the support of about 60 per cent of Greeks, according to a recent poll by Kapa Research.
But Tsipras is losing the far-left wing of his leftist Syriza coalition, which has belatedly figured out that Tsipras’ bailout negotiations have been a disaster.
The judicial overhaul passed is meant to reduce the backlog of cases, particularly revenue-related cases.
The German government also welcomed the vote outcome.
“People moved into town to get jobs in the good years in the early 2000s, but they never changed their tax status – and nobody pressed them to”, Theodoros Petrakis, who grows animal fodder in central Greece, told the Financial Times recently.
In a Monday note, economists at the French bank Société Générale said that “the IMF’s financial involvement is questionable, given 1) its already high exposure to Greece, and 2) the IMF’s view that Greek debt is unsustainable”.
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Eurozone finance ministers meet in Brussels but no proposal reached European Commission head Jean-Claude Juncker, who is not in favour of Greece leaving the EU, warns a Grexit scenario has been prepared “in detail”.
