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 With opposition support, the government is asking parliament to
approve a 85 billion euro bailout deal that Greece needs to avoid
defaulting on a debt repayment next week.
The parliamentary vote, expected in the early hours of Friday, will
test the strength of a rebellion by anti-austerity Syriza lawmakers,
which could raise pressure on Prime Minister Alexis Tsipras to call
snap elections as early as September.
The rebels' leader, former energy minister Panagiotis Lafazanis,
took a step toward breaking away from Syriza, a coalition of leftist
groups which stormed to power in January on promises to reverse
austerity policies demanded by the euro zone and IMF creditors.
"The fight against the new bailout starts today, by mobilizing
people in every corner of the country," said a statement signed by
Lafazanis and 11 other Syriza members posted on the far-left
faction's Iskra website.
The statement called for founding a "united movement that will
justify people's desire for democracy and social justice" though it
did not explicitly call for a new party or a split from Syriza.
Parliament, however, is expected to approve the bailout agreement by
a comfortable margin since opposition parties have promised their
backing for the government to ensure Greece does not return to
financial chaos.
Tsipras has faced a rebellion among about a quarter of his 149
lawmakers since agreeing last month to the bailout deal under the
threat of a banking collapse and euro zone exit.
Earlier, government spokeswoman Olga Gerovasili criticized the
rebels, saying a government without a majority "cannot go far" and
raising the possibility of early elections.
Gerovasili said that after the parliamentary vote, the focus would
shift to a meeting of euro zone finance ministers on Friday who must
also back the bailout, Greece's third in the past five years.
However, she signaled that the government would struggle if Syriza
remained disunited. "It is known that some Syriza lawmakers will not
vote in favor of the accord," she told Mega TV. "A government that
does not have a governing majority cannot go far."
The rebels insist the government should stand by the promises on
which it was elected to reverse the waves of spending cuts and tax
rises, which have had a devastating effect on an already weak
economy over the past few years.
DISHARMONY
As Greece needs the new deal to make a 3.2 billion euro debt
repayment to the European Central Bank on Aug. 20, Tsipras asked
parliamentary speaker Zoe Konstantopoulou to expedite debate on the
bill approving the bailout.
Konstantopoulou, a Syriza hardliner who opposes the deal, responded
by calling a series of parliamentary committee meetings to consider
the bill on Thursday, delaying the start of the plenary debate and
meaning it is likely to last well beyond midnight before the vote is
held.
 Gerovasili, the government spokeswoman, made clear the government's
displeasure. "Ms Konstantopoulou has her own ways," she said. "There
are two differing views which are creating disharmony."
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Pressed on speculation that Syriza might formally split, leading to
elections in the autumn, Gerovasili said: "It is possible that in
the future there could be procedures to seek a new mandate from the
people... This will happen when there is an assessment that there
must be fresh elections."
She was speaking before the Lafazanis statement.
Tsipras has said Syriza will hold a special congress after the
summer to debate its differences.
Months of bitter negotiations between Athens and the creditors have
shaken an economy which last year had been pulling out of a long
depression before turning down again.
But data on Thursday showed the economy returned to growth in the
second quarter of this year. Confounding economists' expectations of
a deepening recession, the ELSTAT statistics service said gross
domestic product rose 0.8 percent quarter-on-quarter in April-June.
Nevertheless, the economy is likely to have worsened since then as
the government imposed capital controls on June 29 to save the Greek
banking system from collapse.
The bailout deal is based on forecasts that the economy will shrink
between 2.1 and 2.3 percent this year. Nikos Magginas, an economist
at National Bank, said the surprise data offered hope that the fall
in GDP could be less than two percent in 2015.
With Greeks limited to withdrawing 420 euros a week from their
accounts and businesses subject to severe controls on payments, the
economy is taking another hit. The controls are unlikely to be fully
lifted until the banks are recapitalized, encouraging Greeks to
return cash they are keeping under their mattresses to their
accounts.
Under the bailout deal, Greece must take steps to tackle the
mountain of bad loans weighing on the banks.
The legislation before parliament also covers tax and pension
reform, public administration reform, the relaunch of a
privatization scheme which stalled earlier in the year and the
establishment of a wealth fund for privatization projects which will
be supervised by European institutions.
According to the 29-page memorandum of understanding Greece agreed
with creditors, a copy of which was obtained by Reuters, Greece must
move to rapidly privatize its ports, regional airports and its power
grid operator.
(additonal reporting by Deepa Babington; writing by David Stamp;
editing by Jeremy Gaunt)
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