Greece’s Tsipras rallies political support for tough bailout terms

Greek Prime Minister Alexis Tsipras on Tuesday battled to hold his ruling Syriza party together as opposition mounted to a shocking new bailout deal that requires Athens to push through draconian reforms within two days.

With around 30 hardline Syriza lawmakers threatening to oppose the latest tough reforms demanded by Greece’s international creditors, Tsipras faced the unenviable task of turning to pro-austerity opposition parties to push the deal through parliament by Wednesday.

In the agreement struck Monday with the eurozone to prevent Greece crashing out of the euro, the Greek parliament must pass sweeping changes to labour laws, pensions, VAT and taxes.

Only then will the 18 other eurozone leaders start negotiations over what Greece is to get in return: a three-year bailout worth up to 86 billion euros ($96 billion), its third rescue programme in five years.

With much of the party up in arms, Tsipras loyalists were hard at work on Tuesday to convince a sceptical party that the tough cuts could be softened through alternative measures.

“I believe the people trust Tsipras and the government to remove these measures in the implementation phase, there can be policies that can cancel them out,” said Interior Minister Nikos Voutsis.

But a number of prominent leftists were refusing to budge.

“I was elected on a platform of abolishing the bailout and its application laws,” Syriza lawmaker and parliament vice-president Despoina Haralambidou told Vima FM radio.

“The great majority of Syriza organisations oppose this agreement… in terms of labour and pension issues this is worse than the last two bailouts,” she added.

Syriza’s junior coalition partner, the nationalist Independent Greeks party (ANEL) also said it would not approve the tough measures but would stay in the government.

In Washington, the White House hailed the deal on Greece as “a credible step” on the long path to economic growth and debt sustainability in the hard-up country.

And French President Francois Hollande insisted there was no Greek humiliation in the deal struck in Brussels.

Tsipras has predicted “the great majority of Greek people will support” the deal, which he said includes help to ease Greece’s huge burden of debt and revive its crippled banking system.

The last-ditch deal is aimed at keeping Greece’s economy afloat amid fears its cash-starved banks were about to finally run dry and trigger its exit from the single currency.

– ‘Humiliation and slavery’ –

Many ordinary Greeks however are sceptical that the deal will bring about any improvement in their lives. Some expressed their anger on social media, where the Twitter hashtag #ThisIsACoup trended.

Greece’s public servants are also to stage a 24-hour strike on Wednesday, the first big stoppage since Tsipras took power.

Haralambos Rouliskos, a 60-year-old economist, described the deal as “misery, humiliation and slavery”.

The eurozone creditors “are trying to blackmail us,” said Katerina Katsaba, a 52-year-old working for a pharmaceutical company.

Faced with a eurozone deeply distrustful of Athens after five months of tense meetings, the 40-year-old Tsipras had to agree to demands that critics say rob Greece of financial independence.

“This agreement may pass with (opposition party) votes, but it will never pass the people,” the head of a hardline Syriza faction, Energy Minister Panagiotis Lafazanis, said.

If Greece passes it, 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.

Germany’s Bundestag is likely to vote on Friday, provided the Greek parliament rushes through the four new market-oriented laws by Wednesday.

Despite strong opposition, Tsipras also yielded to a plan to park assets for privatisation worth up to 50 billion euros in a special fund.

Some 25 billion euros of the money in that fund will then be used to recapitalise Greece’s cash-starved banks.

There is also a pledge to reverse laws brought in by the Syriza government that run counter to Greece’s earlier bailout arrangements in 2010 and 2012.

– ‘No golden key’ –

The deal contains little mention of relieving a Greek debt mountain worth 180 percent of GDP — a step recommended by the International Monetary Fund — beyond a vague mention that it should be considered later.

The eurozone must now unite to tackle the immediate problem of finding funds to keep Greece afloat as Athens faces several huge debt payments to the ECB and other creditors and the bailout could take weeks if not months to finalise.

Eurozone finance ministers were meeting Tuesday to consider bridge funding for Greece, but officials said there was no easy solution.

The ECB meanwhile has kept Greek banks afloat — barely — with emergency liquidity, but has refused to provide extra funds.

Banks will stay closed in Greece until Wednesday, the country’s finance ministry said in a statement.