Furious Greek politicians rip up bailout deal and throw it in prime minister Tsipras's face as his own Syriza party seems increasingly likely to REFUSE €86bn agreement that even the IMF said was unfair
- Tsipras agreed to harsh austerity terms as part of an €86 billion bailout
- Had a deal not been struck, Greece faced crashing out of the Eurozone
- But many in ruling Syriza party are furious at way PM handled negotiations
- IMF condemned bailout, saying Greek debt will reach 'unsustainable' 200%
There were furious scenes in the Greek parliament today as politicians ripped up papers outlining the terms of the country's €86 billion bailout deal and threw them at Prime Minister Alexis Tsipras.
Politicians gathered in Athens this afternoon to debate the draconian reforms Tsipras agreed to implement during crunch overnight talks with eurozone leaders earlier this week.
The harsh austerity measures Greece would have to put in place to release the bailout fund have been widely condemned, with even the International Monetary Fund branding them unfair.
As a midnight deadline looms for Greek MPs to vote on whether to accept the controversial plans, it now looks increasingly likely that Tsipras' own hard left Syriza party will reject them, after more than half of the party's members slammed the deal, branding it 'humiliating' and 'destructive'.
Earlier Tsipras revealed that even he does not believe in the tough bailout deal offered by eurozone leaders but said he only agreed to implement it in order to save the near-insolvent country, adding that he has no intention of resigning over the matter.
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Frustration: There were furious scenes in the Greek parliament today as politicians ripped up papers outlining the terms of the country's €86 billion bailout deal and threw them at Prime Minister Alexis Tsipras
Anger: Politicians gathered in Athens this afternoon to debate the draconian reforms Tsipras agreed to implement during crunch overnight talks with eurozone leaders earlier this week
Carefree: As a midnight deadline looms for Greek MPs to vote, it now looks increasingly likely that they will reject the reforms agreed to by Tsipras (pictured centre in parliament this afternoon)
Tsipras' hard-pressed government suffered its first resignations this afternoon, with a junior finance minister Nadia Valavani (left) and a senior economy ministry official walking out in protest. Pictured right is Greek Finance Minister Euclid Tsakalotos
Defending the terms, Tsipras said the 'bad deal' was the best available under the circumstances.
He said: 'I assume responsibility for all mistakes I may have made, I assume responsibility for a text I do not believe in, but which I signed to avoid disaster for the country, the collapse of the banks.'
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Tsipras also predicted that 'the great majority of Greek people' will support the deal, but admits he 'cannot say with certainty' that it will be enough to stop Greece exiting the eurozone - a so-called 'Grexit' - until the final bailout agreement is signed.
The outcome of today's vote is in doubt after the IMF issued its stark warning that Greece's creditors will have to go 'far beyond' existing estimates for debt relief to stabilise the country's finances.
The deal has split the ruling radical Syriza party as it includes changes to labour laws, pensions, VAT and other taxes that were rejected by voters in a July 5 referendum.
Calm: Alexis Tsipras smiles during a Syriza meeting this afternoon. Greek MPs are debating ahead of a vote on austerity measures aimed at saving their economy - which financial analysts doubt will even work
Unpopular: Greece's PM Alexis Tsipras arrives for a meeting with lawmakers of Syriza governing party
Quit: This morning Greece's Alternate Finance Minister Nadia Valavani resigned from government in protest over the austerity measures the country is asked to implement in exchange for a bailout
No choice: Greek Prime Minister Alexis Tsipras (right) has revealed he does not believe in the tough bailout deal offered by Eurozone leaders but agreed to implement it to save the near-insolvent country from 'disaster' Pictured left is Greek Finance Minister Euclid Tsakalotos
Tsipras' hard-pressed government suffered its first resignations this afternoon, with a junior finance minister and a senior economy ministry official walking out in protest.
'I'm not going to vote for this amendment and this means I cannot stay in the government,' said junior finance minister Nadia Valavani.
The parliament in Athens must approve the deal before the 18 other eurozone leaders start negotiations over what Greece is to get in return: a three-year bailout worth up to €86 billion, its third rescue programme in five years.
This afternoon is emerged that more than half of Syriza's central committee has signed a statement slamming the agreement Greece reached with its European creditors earlier this week, describing it as a coup against their nation by European leaders.
The statement, signed by 109 of the committee's 201 members, says the agreement was 'the result of threats of immediate financial strangulation' and is a new bailout with 'humiliating terms of supervision, destructive for our country and its people.'
Greece's former finance minister Yanis Varoufakis attends today's meeting amid revelations that more than half of Syriza's central committee has signed a statement slamming the agreement Greece agreed to
Former Greek Finance Minister Yanis Varoufakis arrives at the parliamentary session in Athens this afternoon
Draconian: Greek people have taken to the streets in protest at the terms of the harsh €86 billion bailout agreement, which even the International Monetary Fund has condemned as 'unsustainable'
Fury: Many Greeks are angry at the harsh bailout terms and have taken to the streets of Athens in protest
No: In a scathing attack, the IMF said Greece will never be able to pay back the borrowed billions under the current loan agreement and creditors will have to accept they will never get all the money back
Under the plan, eurozone governments will contribute between €40 and €50 billion, the IMF will contribute another chunk and the rest will come from selling off state assets and from financial markets, a European official said.
Tsipras has admitted he 'cannot say with certainty' that it will be enough to prevent a so-called 'Grexit' until the final bailout agreement is signed.
An IMF official said the fund would only participate in a third bailout if EU creditors produce a clear plan. The current deal 'is by no means a comprehensive, detailed agreement,' the official said.
Its analysis pointed to Greek government debt reaching a peak of close to 200 per cent of the country's economic output over the next two years, which it called 'highly unsustainable'.
'Greece's debt can now only be made sustainable through debt relief measures that go far beyond what Europe has been willing to consider so far,' it added.
Political analysts questioned why the strongly-worded report appeared not to have been taken into account in the agreement.
Taking a stand: Civil servants began a 24-hour strike in Greece today, as municipal workers and some pharmacists also promised large-scale strikes, in protest against the reform measures.
Defiant: Anti-austerity demonstrators march along a street during a protest in central Athens this morning
Not working: Public servants protest during a 24-hour nationwide strike in Athens earlier today
Outrage: Public servants protest during a 24-hour nationwide strike in Athens earlier this morning
The revelations put greater strain on Tsipras, who has been forced to turn to pro-European opposition parties to get the reform measures through parliament after a rebellion by some 30 rebel lawmakers in his own party.
The embattled premier said he took 'full responsibility' for signing an accord he did 'not believe in.' He said he agreed to it 'to avoid disaster' as the country teetered on the brink of economic collapse.
'A prime minister must fight, speak the truth, take decisions and not run away,' Tsipras said in an interview on Greek public television, when asked whether he would resign if the reforms fail to pass or he loses his parliamentary majority.
Finance Minister Euclid Tsakalotos told a parliamentary debate: 'It's a difficult deal, for which only time will show if it is economically viable.'
Syriza's hardline leftists, lead by Energy Minister Panagiotis Lafazanis, were reported by Greek media as braced to vote against the measures while calling for a return to the drachma.
Polls published late Tuesday by Kapa Research found 72 percent of Greeks surveyed thought the deal was necessary if tough, but many nevertheless saw it as a humiliating climbdown for a country still reeling from years of painful austerity.
Small anti-austerity protests were held in Athens and Thessaloniki, with police in riot gear closing off roads around parliament ahead of a large-scale demonstration expected late Wednesday. A strike by civil servants against the deal was disrupting travel.
Despite the turmoil, 68 percent of people said that if the political fallout from the vote should result in a new coalition, it should be led by Tsipras.
Tough gig: The news comes as Greece gears up for this afternoon's parliamentary vote on the reforms, which will not be passed unless Greek Prime Minister Alexis Tsipras (right) and new Finance Minister Euclid Tsakalotos (left) convince their Syriza colleagues to unite behind them and agree to tough austerity measures
Challenge: Tsipras (pictured arriving at his office in Athens today) must convince Syriza colleagues to unite behind him and agree that tough austerity measures are the only way to stop Greece crashing out of the euro
Difficult: Banks have been shut in Greece since June 29 and capital controls have been imposed restricting ATM cash withdrawals to €60 per day, and to €120 per week for pensioners and the unemployed without bank cards. Pictured, elderly Greeks queue up outside a bank in Athens this morning
Under the deal, Greek assets for privatisation will be parked in a special fund worth up to 50 billion euros, with some 25 billion euros of the money earmarked to recapitalise Greece's banks.
Tsipras said Greeks' savings were safe, but the reopening of the banks - which have been closed since the end of last month - depended on the finalising of the deal, which could take a month. The finance ministry said they would remain closed until at least Thursday.
The European Central Bank has been keeping Greek banks afloat with emergency liquidity, but it could be forced to cut off that aid if Greece misses a huge debt repayment due on Monday.
European governments are meanwhile divided over options to help Greece meet its short-term cash needs while it waits for the eurozone bailout deal to be finalised, which will likely to take at least four weeks.
The European Commission on Wednesday formally backed a controversial proposal to use an EU-wide crisis fund to cover Greece's short-term cash needs, officials said, setting up a clash with Britain and Germany.
In a sign of the ongoing concern about the global fallout of the Greek crisis, US Treasury Secretary Jacob Lew will travel to Germany and France on Wednesday and Thursday for talks with top officials.
If Greece does pass the agreement, Europe's next step would be to push the deal through several national parliaments, many in countries that are loath to afford Athens more help.
Angry: Greeks have taken to the streets in protest at the terms of the harsh €86 billion bailout agreement
Protest: Greece is gearing up for this afternoon's parliamentary vote on the draconian reforms. The outcome of the crucial vote is far from clear but Tsipras must convince Syriza colleagues to back him if it is to pass
An anti-austerity banner attacking Tsipras' deal is seen in the northern Greek port city of Thessaloniki today
Today the European Commission says there are 'serious concerns' about the sustainability of Greece's debt load amid a worsening in its economy.
The Commission says in a report that its main forecasts are for debt to reach 165 percent of GDP in 2020, 150 percent in 2022 and 111 percent in 2030.
In an 'adverse' scenario, in which the economy does worse than expected, the debt load would hit a massive 187 per cent, 176 percent and 142 percent, respectively.
The left-wing government of Prime Minister Alexis Tsipras took office in January.
The Commission says that since the end of last year, there was a 'very significant weakening of commitment to reforms and backtracking on previous reforms' which quickly led to a 'significant deterioration of debt sustainability.'
The Commission has cut its growth estimates and expects up to a 4 per cent contraction in Greece's economy this year, compared with a 0.5 percent rise predicted early this year.
The German government is arguing that one possible way to help Greece meet its financial obligations in coming days, before a full bailout program is established, is for the country to issue IOUs for domestic needs.
Finance Ministry spokesman Martin Jaeger said Wednesday that 'we have included this element in the discussion' among eurozone nations on how to keep Greece afloat while talks proceed on the details of a full bailout deal. The talks are expected to last weeks.
Jaeger says that IOUs are just one of 'various conceivable approaches.'
Greece needs short-term financing among other things to repay a loan to the European Central Bank due next week and to clear arrears with the International Monetary Fund.
Under pressure: Tsipras (pictured arriving at his office in Maximos Mansion, Athens this morning) revealed that even he does not believe in the tough bailout deal offered by eurozone leaders
Pensioners wait outside a National Bank of Greece branch to receive their pension in Athens earlier today
Pensioners wait outside a National Bank branch to receive part of their pension in Athens earlier this morning
Banks have been shut in Greece since June 29 and capital controls have been imposed restricting ATM cash withdrawals to €60 per day
The loan would be made pending the start of a full bailout program agreed on between the 19 eurozone leaders on Monday.
Since Greece needs to meet debt payments as soon as next week, eurozone nations have been looking for a way to give it a first, quick loan. They are considering tapping a fund, the EFSM, which is backed by all 28 countries in the EU. The problem is that non-euro nation Britain does not want to help pay for Greece, which it considers a eurozone issue
The embattled premier said he took 'full responsibility' for signing an accord he did 'not believe in, but which I signed to avoid disaster for the country' as it teetered on the brink of economic collapse.
'A prime minister must fight, speak the truth, take decisions and not run away,' Tsipras said in an interview on Greek public television, when asked whether he would resign if the reforms fail to pass or he loses his parliamentary majority.
Greece's finance ministry says the banks will remain closed through Thursday.
The ministry says the transactions that can be carried out at the few bank branches that are allowed to open are being broadened.
Apart from allowing pensioners without bank cards to withdraw €120 per week, they will also process payments for credit card bills, debts to the state like taxes and utility bills, and insurance company bill payments. They will also allow the transfer of funds between accounts in the same bank.
Worry: A woman sits at the main gate of the National Bank of Greece as she waits her turn to withdraw a maximum of €120 from her pension
A Greek Orthodox priest walks past the headquarters of the Bank of Greece in Athens earlier this morning
People line up to withdraw a maximum of €60 from an ATM outside an Alpha Bank branch in Athens today
Banks have been shut in Greece since June 29 and capital controls have been imposed restricting ATM cash withdrawals to €60 per day, and to €120 per week for pensioners and the unemployed without bank cards.
Credit and debit card payments within the country are allowed, as are electronic banking transactions within the country.
Bill payments abroad or sending funds abroad require special permission.
This morning an independent United Nations expert on foreign debt says Greece's creditors may break international law if the austerity measures they demand lead to undue hardship.
Juan Pablo Bohoslavsky says he is concerned about reported shortages of medicines and food caused partly by restrictions on money transfers.
He says in a statement Wednesday that European institutions, the International Monetary Fund and the Greek government must ensure that any bailout deal safeguards the right to health care, food and social security.
Bohoslavsky says 'there is real legal risk that some of the harsh austerity measures could be incompatible with European and international human rights law.'
He is scheduled to visit Greece November 30 to December 7.
In Greece, Second World War imagery being used to portray Chancellor Angela Merkel (left) and her hardline finance minister Wolfgang Schaeuble (right) as cold-hearted bullies in the mould of the dreaded Gestapo
Hostility: Greeks have accused Germany of using WW2-style tactics to condemn their country to austerity. Pictured is a poster outside an Athens bank depicts German Finance Minister Wolfgang Schaeuble as a Nazi
Tsipras ally Panos Skourletis, minister for employment, urged lawmakers to 'vote for the bill', saying the government would 'reduce the painful consequences of this agreement'.
But Syriza's hardline leftists, lead by Energy Minister Panagiotis Lafazanis, were reported by Greek media to have decided not to vote for the measures but call instead for a return to the drachma.
Polls published late Tuesday by Kapa Research found 72 percent of Greeks surveyed thought the deal was necessary, with the majority blaming Europe for the 'tough measures', but many see it as a humiliating climbdown for a country still reeling from years of painful austerity.
Civil servants went on strike Wednesday, the first big stoppage since the 40-year-old took power.
But despite the turmoil his popularity seemed undented, with 68.1 per cent of people saying that if the political fallout from the vote should result in a new coalition, it should be led by Tsipras.
Under the deal, Greek assets for privatisation will be parked in a special fund worth up to 50 billion euros, with some 25 billion euros of the money earmarked to recapitalise Greece's banks.
Tsipras said the establishment of the fund meant ordinary Greeks' savings were safe, but added that the reopening of the banks - which have been closed for over a week - depended on the finalising of the deal, which could take a month.
PROFILE: WOLFGANG SCHAEUBLE - THE GERMAN FINANCE MINISTER WHO IS LOATHED IN ATHENS BUT LOVED IN BERLIN
Wolfgang Schaeuble arrives for the start of the Eurogroup finance ministers meeting yesterday
German Finance Minister Wolfgang Schaeuble, whose tough stance in bailout talks with Greece has turned him into a hate-figure there, has surged to a new high in popularity at home, with 70 per cent of Germans saying they approve of the job he is doing.
A survey for public broadcaster ARD showed the 72-year-old Schaeuble is more popular than his boss, Chancellor Angela Merkel, who had a rating of 67 per cent.
Foreign Minister Frank-Walter Steinmeier topped the popularity ratings with 73 per cent.
ARD said it was the highest rating for Schaeuble.
Schaeuble has been praised in the conservative German media in recent weeks for refusing to bow to the demands of Greek Prime Minister Alexis Tsipras in negotiations over a bailout extension.
Top-selling daily Bild, which has campaigned for the euro zone to cut the Greeks loose, included a picture of Schaeuble in a superhero costume last month, declaring him 'Euroman' and praising him for defending the currency in the face of the 'Greek rescue circus'.
In contrast, Schaeuble is widely disliked in Greece, where some newspapers have run cartoons of him dressed as a Nazi.
A survey last month showed that only 14 per cent of Greeks view him positively, compared to 39 per cent for Merkel.
A woman burns a Syriza flag during a demonstration against the Greek bailout deal in Athens yesterday
Protest: Greeks take to the streets on Athens yesterday furious at the way Tsipras handled negotiations - rejecting lighter reforms during months of talks before caving in to harsh austerity measures at the 11th hour
This morning a German official says criticism by Tsipras of the preliminary bailout deal with creditors isn't helpful.
Deputy finance minister Jens Spahn criticized Tsipras' comments last night, telling ARD television: 'This is not just about saving (money); it is about this country needing an idea of how it wants grow economically again, how it wants to be successful, change structures and win trust.'
He added: 'If someone then says, `I don't actually stand by what I'm doing now,' I find that difficult. That doesn't necessarily create trust.'
The European Central Bank has been keeping Greek banks afloat with emergency liquidity, but it could be forced to cut off that aid if Greece misses a huge debt repayment due on Monday.
European governments on Tuesday also clashed over options to help Greece meet its short-term cash needs while it waits for a eurozone bailout deal to be finalised, likely to take at least four weeks.
In a sign of the ongoing concern about the global fallout of the Greek crisis, US Treasury Secretary Jacob Lew will travel to Germany and France on Wednesday and Thursday for talks with top officials.
If Greece does pass the agreement, Europe's next step would be to push the deal through several national parliaments, many in countries that are loath to afford Athens more help.
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