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 Having staved off financial meltdown with a new agreement from
Greece's creditors, Prime Minister Alexis Tsipras has less than 48
hours to smother dissent from hardliners and pass measures tougher
than those rejected in a referendum days ago.
Syriza and its junior coalition ally held separate meetings to
prepare for parliament sittings to pass the laws, which include
plans for tax hikes, pension reforms and tighter supervision of the
government's finances.
It was a spectacular turnaround for a Syriza party voted into power
in January promising to end years of cuts and recession in a country
where a quarter of people are unemployed. There was some
speculation, including in Germany's mass-selling Bild newspaper,
that Tsipras could resign.
Comparing the challenge facing the government to the Gordian Knot of
mythology that was impossible to untie, Interior Minister Nikos
Voutsis was nevertheless confident that Tsipras could muster enough
votes in parliament.
"The decisions that will facilitate a return to normality will take
place," Voutsis told reporters.
But investors were less sure. European shares edged lower on Tuesday
after a four-day rally amid uncertainty over whether the measures
would be passed in time.
The party's junior coalition partner promised to support the
government, with the ambiguous caveat that it would only vote for
bailout measures agreed before last weekend's summit in Brussels,
which were less stringent.
"We are committed to voting for what we decided in the council of
the political leaders and only that, no other measures that are
imposed," Panos Kammenos, head of the right-wing Independent Greeks,
told reporters.
He and a parliamentary spokesman for Syriza railed against what he
described as a "coup" by creditors to force Greece to accept harsh
reforms, while opponents of the new measures are planning strikes
and protests in the coming days.
GOVERNMENT IN QUICKSAND
Tsipras will probably have to sack some hardline ministers and count
on opposition lawmakers to pass the reforms, which could be clubbed
together in one bill on Wednesday.
One obstacle could be the parliamentary speaker, Zoe Constantopoulou,
who is key to the logistics of the vote and has been one of the
creditors' most ferocious critics. Tsipras could try a potentially
risky move of forcing her out through a no-confidence vote, although
that would eat up precious time and political capital to prepare the
reform bills.
"The government finds itself in quicksand after the deal with
creditors," the center-right Kathimerini newspaper said.
"Mr. Tsipras needs to solve a difficult equation as dissenters on
Wednesday's vote may reach or exceed 40," it said. Tsipras needs 151
of 300 lawmakers to pass the reforms and with the votes of his own
party and allies theoretically has 162.
"Mr. Tsipras has decided to first pass the measures in parliament
with the support of the opposition parties and then attempt to solve
the Gordian Knot."
The Bank of England Governor Mark Carney also drew on Greek
mythology to underscore the scale of the challenge, saying it needs
a "Herculean" effort from all sides for the deal to work.
Austria's Chancellor Werner Faymann said a "Grexit" could not be
ruled out despite the agreement, echoing findings by a Reuters poll
of 60 economists, some of whom saw at least a 50 percent chance of
Greece leaving the currency.
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The poll, which was carried out in the 24 hours after news of the
agreement broke, also pointed to skepticism about whether the deal
was good for both Greece and Europe, and whether Greece had enough
assets to sell to meet the terms of the deal.
"No one can say that some kind of a catastrophe is ruled out,"
Faymann told a weekly government news conference.
Euro zone finance officials are struggling to find a way to give
Greece bridge financing to keep the country afloat while a third
bailout package is negotiated, especially to pay back loans owed to
the European Central Bank next week.
TRUCE OR DESTRUCTION
There has been a mounting anger at both the government and the
creditors, with many Greeks decrying what they saw as a humiliation
imposed on them that treated their country like a European colony.
German Finance Minister Wolfgang Schaeuble became the focus of the
outrage by floating a proposal during the bailout talks over the
weekend for a temporary Greek exit from the euro zone.
According to Germany's Handelsblatt newspaper on Tuesday, Schaeuble
later suggested in discussions with other euro zone finance
ministers that Greece could issue IOUs as a means of interim
financing. Schaeuble suggested Athens could use IOUs to serve some
of its domestic payment obligations.
"With this deal, the public mandate and the proud 'No' of the Greek
people in the referendum is canceled," said Energy minister
Panagiotis Lafazanis, one of the leftist hardliners whom Tsipras
must sidestep to implement the reforms.
"The government and the prime minister himself, even at the last
minute, have the opportunity to change their mind and take it back,
before the parliament decides," he said in a statement.
"The dilemma posed by the creditors, truce or destruction, is fake
and terroristic and has been demolished in the public conscience,"
he said.
The pain for Greece continues, with bank closures and strict
controls on withdrawals from cash machines squeezing businesses dry.
A Greek trade federation called on the government to loosen such
capital controls to allow companies to make payments owed to
overseas vendors.
Fighting its own battle with Brussels to secure reforms of the
European Union, British Finance Minister George Osborne has ruled
out any financial involvement in a fresh bailout for Greece. The
move followed suggestions a mechanism backed by the whole European
Union could provide bridge financing.
(Reporting by Renee Maltezou, Angeliki Koutantou, George
Georgiopoulos, Lefteris Karagiannopoulos, Dina Kyriakidou, Costas
Pitas in ATHENS; William James in LONDON; Angelika Gruber in VIENNA;
Sumanta Dey; writing by Matthias Williams; Editing by Sonya
Hepinstall and Anna Willard)
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