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 In
parliament overnight, Tsipras had to rely on opposition votes from
the right after some of his leftist allies opposed spending cuts,
tax rises and other measures he proposed in order to unlock 54
billion euros in three-year credit and save Greece from a bankruptcy
that would force it out of the euro zone.
But Germany, the biggest creditor in two previous bailouts totaling
240 billion euros ($265 billion), is deeply skeptical after five
months of abortive negotiations. Euro zone sources said it was far
from certain that the 19-strong Eurogroup of finance ministers would
agree to open negotiations at a crisis meeting scheduled to start at
3 p.m. (1300 GMT).
"The high figures for financing needs over the next three years may
be too high and too sudden," one said. He added that EU and IMF
experts estimated Greece's needs at 82 billion euros, factoring in
cash to come from the IMF and other EU sources.
A spokesman for German Finance Minister Wolfgang Schaeuble declined
comment on a newspaper report that he found Tsipras's proposals
inadequate and would oppose further talks. He said the outcome of
Saturday's talks remained "completely open".
Schaeuble, as well as French Finance Minister Michel Sapin, arrived
more than two hours early, as did new Greek Finance Minister Euclid
Tsakalotos. IMF head Christine Lagarde said on arrival: "I think we
are here to make a lot more progress."
German Chancellor Angela Merkel has made clear she does not want to
see a "Grexit" that could disrupt the ailing European economy and
undermine a supposedly irreversible union. However, she faces stiff
opposition among her own conservative allies.
A positive assessment of the Greek proposals delivered by the
European Commission, European Central Bank and International
Monetary Fund late on Friday, along with bullish comments from
Athens' key euro zone ally France, had raised expectations that the
Eurogroup would give a green light to new loan negotiations.
Euro zone leaders, including Merkel and French President Francois
Hollande, are due to meet on Sunday, either to endorse the
ministers' decision or, along with other EU leaders, to take steps
to contain the fallout from a looming Greek bankruptcy.
Among the hawkish, small east European states whose voters are loath
to pour more money into a country some believe the euro zone would
be better off without, Lithuania's finance minister said the
Eurogroup would judge Tsipras's credibility.
"We have to take the best decision for the euro zone," said Rimantas
Sadzius. "We have to evaluate, how constructive and realistic it is
... We have no right to blindly borrow taxpayers' money - we have to
be sure they will be paid back".
PARLIAMENT DIVIDED
With Greece's banks shut and completely dependent on a credit
lifeline from the European Central Bank, the measures were seen as a
last chance to avert financial collapse.
The European Commission, ECB and IMF told euro zone governments
after a review of Tsipras's proposals that they was sufficient basis
to start negotiating conditional loans from the currency bloc's ESM
bailout fund.
But in an ominous sign for the stability of the Greek government, 10
members on the ruling benches abstained or voted against the
measures and another seven were absent, leaving Tsipras short of the
151 seats needed for a majority of his own.
Prominent leftwingers in his Syriza party signaled before the vote
that they could not support the mix of tax hikes and spending cuts
proposed by Tsipras, following the rejection of similar austerity
measures by voters in Sunday's referendum.
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Energy Minister Panagiotis Lafazanis, Deputy Labour Minister
Dimitris Stratoulis as well as the speaker of parliament, Zoe
Constantopoulou, all called "Present", in effect abstaining from the
vote and withholding their support from the government.
"The government is being totally blackmailed," Constantopoulou said.
Following the vote, where many leftists in his own party were
stunned by his acceptance of previously spurned austerity measures,
Tsipras said he would now focus on securing a deal.
"The parliament today gave the government a strong mandate to
complete the negotiations and reach an economically viable and
socially fair agreement with its partners," he said.
"The priority now is to have a positive outcome to the negotiations.
Everything else in its own time."
"HEAVY HEART"
After the jubilation in Athens last Sunday following the resounding
rejection of further austerity in a referendum, there was bitterness
that parliament was being asked to accept a strikingly similar
package of measures.
The leader of the right wing Independent Greeks party, the junior
coalition party in Tsipras' government, said his lawmakers would
back the proposals "with a heavy heart".
U.S. Treasury Secretary Jack Lew said on Friday that Greece and its
creditors appeared to be closer to a deal, calling for an adjustment
to Athens' debt burden to ease its cash flow.
Greece asked for 53.5 billion euros ($59 billion) to help cover its
debts until 2018, a review of primary budget surplus targets in the
light of the sharp deterioration of its economy, and a "reprofiling"
of the country's long-term debt.
A senior EU official said the Eurogroup talks would include
discussions on whether Greece needs some debt relief.
In addition to cash from the euro zone, if Greece makes payments it
missed last month to the IMF, the global lender still has a facility
to lend Greece some 16 billion euros.
Any deal would also have to be endorsed by national parliaments
including in Germany, which must also formally approve the loan
negotiations being started.
The latest offer includes defense spending cuts, a timetable for
privatizing state assets such as Piraeus port and regional airports,
hikes in value added tax for hotels and restaurants and slashing a
top-up payment for poorer pensioners.
Greek banks have been closed since June 29, when capital controls
were imposed and cash withdrawals rationed after the collapse of
previous bailout talks. Greece defaulted on an IMF loan repayment
and now faces a critical July 20 bond redemption to the ECB, which
it cannot make without aid.
(Additional reporting by Renee Maltezou, Michele Kambas, George
Georgiopoulos, Costas Pitas, Lefteris Karagiannopoulos, Georgia
Kalovyrna, Matthias Williams and James Mackenzie in Athens, Andrius
Sytas in Vilnius, Sabine Siebold and Paul Carrel in Berlin, Andreas
Rinke and Miranda Alexander-Walker in Brussels and Jan Strupczewski;
Writing by Alastair Macdonald; editing by Ralph Boulton)
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