In recent weeks the Greek economy, which is around a quarter smaller than it was back in 2008 following a brutal recession, has suffered a number of shocks with the country’s euro future on the line.
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Meanwhile, Greek Prime Minister Alexis Tsipras has sacked several ministers as he looked to strengthen his position at home before starting new bailout talks next week.
The measure to seek a new $126.32 billion rescue package sailed through the Bundestag by 439 to 119 votes with 40 abstentions.
In just a few weeks, Greece’s prime minister, Alexis Tsipras, went from being a staunchly anti-austerity, defiant would-be euro zone jilter to a bailout-embracing, leftist-purging premier.
Greek banks will reopen Monday after a three-week closure and withdrawal limits have been relaxed, but capital controls remain in place, a government decree said Saturday.
The European Central Bank says it has increased emergency funding to Greek banks by €900m (£627m) for one week.
“This agreement backed by 28 European Union member states prevents Greece from an immediate default”, Valdis Dombrovskis, EU Commission vice president for euro policy, told reporters in Brussels.
Chancellor Angela Merkel has urged MPs to back the deal, saying she was “absolutely convinced” it was the way forward. In the background is German Interior Minister Thomas de Maiziere.
The Washington-based crisis lender sent shock waves through the entire process when it said the deal as sketched out was not workable, and that it could not join in unless there was “dramatic” relief on Greece’s debt to ensure its finances are “sustainable” over the long run.
Greece agreed to significant economic reforms: Pension cuts and higher taxes, as well as the sale of some government assets. Administrative Reforms Minister George Katrougalos will be the new labour minister. “But I am firmly convinced of one thing: we would be grossly negligent, even irresponsible, if we did not at least try”. But nearly a fifth of Merkel’s conservatives voted “no” in a blow to the chancellor.
The reshuffle had been expected ever since the party rebellion left Mr. Tsipras dependent on the votes of pro-European opposition parties to pass the bailout deal but it is not likely to change the uncertain overall outlook for the government. His ally, the deputy minister of defence, was also axed. Valavani had announced her resignation immediately before the vote.
The reshuffle allowed Tsipras to replace cabinet rebels with allies of his own or from his junior coalition partners, the right-wing Independent Greeks party.
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“Although the results so far do not satisfy the 62 percent of Greek citizens who voted against austerity in the July 5 referendum, the collapse of this government would delete any hope for a better course in the future”, the editorial concluded, pointing to the latest opinion survey published on Saturday.
