Greek parliament backs Tsipras on economic reforms

The measures are seen as a last chance to avert the collapse of the financial system.

A screengrab shows Greek Prime Minister Alexis Tsipras addressing the nation in Athens on 1 July 2015. Picture: AFP.

JOHANNESBURG - While Greek Prime Minister Alexis Tsipras has won backing from lawmakers, for reform proposals aimed at obtaining a new international bailout, he faced a rebellion in his own party that could threaten his majority in parliament.

The measures, which received an initial nod from European Union and IMF officials before a meeting of eurozone finance ministers overnight, were passed with the support of pro-European opposition parties.

Tsipras won overwhelming cross-party support but saw some of his own MPs vote against him or abstain.

Earlier, he admitted that some elements of the package fell short of his party's anti-austerity promises.

With Greece's banks shut and completely dependent on a credit lifeline from the European Central Bank, the measures are seen as a last chance to avert the collapse of the financial system and prevent Greece from being pushed out of the euro.

The proposals are to be studied by eurozone finance ministers later today.

German politician, Philipp Mißfelder said the entire euro group will have to act with sense of urgency to resolve the matter.

"It's not the failure of the whole currency but we don't want to have it happen because I think there will be a lot of collateral damage also for the German economy.

"So everybody will pay at the end, not only the Greeks, so also the rest of the euro group, or maybe the whole continent. And therefore we're convinced that keeping everything together is still the best option," he said.

While Germany says it wants the euro to remain as it is it's been accused of acting too harshly and unfairly towards Greece.

Mißfelder added that, "It's extremely high but it's never too late in politics. So they have the chance also after this bad referendum to come back to the table and to negotiate."

Reuters poll of economist the probability of Greece leaving the Eurozone is at 55 percent.

He said many eastern and central European countries suffered much more than Greece did and they did their homework and, in making things clear to the international community, German doesn't believe economic growth can be created just by austerity.

In an ominous sign for the stability of the government, however, 10 deputies on the ruling benches either abstained or voted against the measures and another 7 were not present, leaving Tsipras short of the 151 seats needed for a majority of his own.

Prominent leftwingers in the governing Syriza party signalled 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.

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 to acquiesce to something which does not reflect what it represents," Constantopoulou said.

Following the vote in parliament, 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," Tsipras said.

"The priority now is to have a positive outcome to the negotiations. Everything else in its own time."

Experts from the European Commission, ECB and the IMF spent Friday reviewing the Greek case for aid and the proposals for economic reforms that will be conditions for any loans.

A person close to the matter told Reuters that EU and IMF officials had given euro zone governments a positive initial assessment of Greece's request for a new bailout.

The positive evaluation, along with a conclusion that Athens needs a total of some 74 billion euros to meet its obligations, will form a key part of discussions among euro zone finance ministers when they meet in Brussels at 3 pm.

But after the jubilation in Athens on 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."

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Additional information by Reuters