Greece's Vital Bailout Vote Is Splitting Syriza

Greece's parliament will vote on a third bailout tonight, with a backdrop of political chaos, IMF reprimands, and demonstrations on the streets.

by VICE News
Jul 15 2015, 12:55pm

Imagen por Orestis Panagiotou/EPA

Greece's parliament is set for a midnight vote on Wednesday on a new austerity bill, as political and social tensions escalate again in the debt-stricken nation.

The International Monetary Fund (IMF) has also heavily criticized the bailout deal that's currently on offer from Greece's European creditors, saying that the country's public debt is now "highly unsustainable." The country has recently defaulted on two IMF loans of around 2 billion euros ($2.2bn).

Meanwhile, Greece's deputy finance minister Nadia Valavani stepped down on Wednesday over her dissent on the bailout. "I'm not going to vote for this amendment and this means I cannot stay in the government," she said.

Her resignation comes just over a week after the departure of Finance Minister Yanis Varoufakis, who stepped down the day after 61 percent of Greek voters opted to reject austerity in a referendum on July 5. In an interview on Monday he told the New Statesman that he's feeling "on top of the world" now he's left his position.

Varoufakis — who said he resigned to enable an agreement to be reached between Greece and its creditors — was highly critical of how the Eurogroup [meeting of the Eurozone finance ministers] had reacted to the crisis. 

"Our government was elected with a mandate to negotiate," he said. "The negotiations took ages, because the other side was refusing to negotiate."

Energy Minister Panagiotis Lafazanis also voiced his rejection of the new proposals, saying in a post on his ministry's website that the deal that Prime Minister Alex Tsipras reached was "unacceptable" and called him to withdraw it.

Related: Possible Greece Bailout Deal Emerges as Pro-European Greeks Rally in Athens

Left-wing party Syriza won Greece's general election in January, after running on the promise to end years of austerity that have seen the standard of living fall and unemployment rise.

The austerity bill that lawmakers are faced with tonight will condemn the country to years of further budget savings, but are also vital in terms of receiving a new bailout and averting likely financial collapse. At least 109 out of 201 Syriza's central committee members have called for a "no" vote.

Tsipras has acknowledged that the measures — which he calls "irrational" — go against his pledges to make life easier for Greeks, but said he had no option if he was to prevent Greece's financial collapse. The prime minister also vowed he would not step down despite the open dissent.

"I will not run away from my responsibilities," he said.

The bill is still expected to pass with pro-European opposition parties voting in favor.

The government, a coalition between Syriza and the small right-wing Independent Greeks, holds 162 seats in Greece's 300-member Parliament. 

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Talks on a bailout package worth 85 billion euros ($94 billion) over three years will start only if Greece's government takes certain steps, including pushing through Wednesday's bill.

The IMF, which was involved Greece's previous two bailouts and will also play a role in the third, has long advocated the country's debt is too high and that any deal must include debt relief — something the Greek side has also insisted on.

Civil servants today held a 24-hour strike in protest at the measures, disrupting public transport, and shutting down state-run services across the country. Pharmacies joined in with their own 24-hour strike to object to the austerity deal, which will allow some non-prescription drugs to be sold by supermarkets.

Demonstrations were planned for Wednesday evening outside parliament during the assembly debate.

Greeks, meanwhile, continued to struggle with limits on cash withdrawals and transfers outside of the country. Banks were shut down on June 29 and the finance ministry said they would remain closed through Thursday.

With its banks dangerously low on liquidity and the state practically out of cash, Greece desperately needs funds. It faces a Monday deadline to repay 4.2 billion euros ($4.6 billion) to the European Central Bank, and is also in arrears on 2 billion euros to the IMF.

Negotiations on the new bailout will take an estimated four weeks, leaving EU finance ministers scrambling to find ways to get Athens some money sooner.

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The Associated Press contributed to this report.