14 July 2015

Tsipras faces party rebellion as Greek parliament prepares to vote on bailout measures

The Greek parliament is preparing to vote on a number of reforms that need to be passed by tomorrow night in order for negotiations over a third bailout package to start. The bills are expected to be approved with the support of opposition parties, but Greek Prime Minister Alexis Tsipras is going to face a party rebellion, with the Left Platform – the hard-line leftist fringe of SYRIZA – set to vote against the measures. Greek Energy Minister and Left Platform leader Panagiotis Lafazanis said yesterday, “Our so-called partners led by the German establishment, behaved towards our country as being their colony and they are nothing more than brutal blackmailers and financial assassins.”

Reports suggest Lafazanis and Deputy Labour Minister Dimitris Stratoulis could both be fired over their opposition to the bailout deal. Panos Kammenos, the leader of the Independent Greeks, SYRIZA’s junior coalition partner, also said that his party will not support the deal – but added that he is not planning to leave government. Meanwhile, Greece missed another €456m payment to the IMF last night.

Commenting on the Greek deal, Italian Finance Minister Pier Carlo Padoan told Il Sole 24 Ore, “Almost all [Eurozone countries] were against a new [bailout] programme. Only the French, tiny Cyprus and we were in favour of a compromise. Maybe this isn’t well understood.” Meanwhile, a snap Infratest Dimap poll for ARD found that 52% of respondents supported the agreement and 44% opposed it, while 62% said they want Greece to remain within the Eurozone compared to 32% who want it to leave. However, 78% of respondents said they did not trust the Greek government to fully implement the agreement.

Separately, the ECB has decided to leave the ceiling on emergency funding for Greek banks via the Emergency Liquidity Assistance (ELA) facility unchanged at €89bn. The Greek Finance Ministry confirmed yesterday that banks will remain closed until Thursday. Open Europe Co-Director Raoul Ruparel is quoted by The Independent as saying, “A crucial question remains over the solvency of Greek banks, since any recapitalisation won’t happen immediately…There remains a threat of a bank collapse.” Raoul is also quoted by The Washington Post as saying, “There are a lot of things out in the open now that can’t be put back in. There is a huge amount of tension inside the single currency, most of all between France and Germany.”

Source: The Financial Times The Wall Street Journal City AM Kathimerini Kathimerini 2 La Repubblica: Koundounas EUObserver Il Sole 24 Ore Il Sole 24 Ore 2 The Independent Spiegel Online The Washington Post

UK could face request to underwrite €850m share of Greek bridging loan

The UK could today face a request to underwrite a share of between €850m and €1.44bn for a ‘bridging loan’ to Greece which would allow the country to pay back maturing debts to the ECB and IMF while negotiations over a comprehensive €86bn bailout package are concluded.  The European Commission has drawn up plans to “reactivate” the so-called European Financial Stabilisation Mechanism (EFSM), a defunct €60 billion bailout fund, which was replaced by the European Stability Mechanism (ESM) in 2012. EU leaders took a unanimous “Council decision” in 2011 to mothball the EFSM with a binding agreement that it “will no longer be needed [and] should not be used for such purposes” and David Cameron has assured MPs the fund would not be used for further Eurozone bailouts.

Ahead of the meeting of EU Finance Ministers, Chancellor George Osborne said “The idea that British taxpayers are going to be on the line for this Greek deal is a complete non-starter. The Eurozone needs to foot its own bill.” The Czech government also voiced its opposition to the deployment with Finance Minister Andrej Babis yesterday telling journalists that “Within the mechanism, other EU countries, too, are pushed into the problem.”

Open Europe’s Raoul Ruparel is quoted by The Daily Mail and the Press Association as saying, “There is no good reason why the UK should participate. This is entirely a problem of the Eurozone and Greece’s own making.” He added, “Overriding the UK would feed fears of Eurozone dominance over non-Euro countries and help feed the Out vote in the UK.”

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Dijsselbloem re-elected Eurogroup President for second term

Dutch Finance Minister Jeroen Dijsselbloem was yesterday re-elected Eurogroup President for a second term, beating Spanish Finance Minister Luis de Guindos. Dijsselbloem won a majority of votes in a first round of voting, and was then unanimously backed for the post in the second round.

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Le Figaro: Greek deal should serve as a warning to France that Europe is merciless

An editorial in Le Figaro argues, “There’s a subliminal message that France and all the ‘lax’ Eurozone economies have an interest in grasping. When the EU is forced to pick up the pieces, it makes one pay dearly…For us too, the strengthened supervision and austerity that Athens is going to endure are a warning: that Europe is merciless.” Writing in his Irish Times column, Fintan O’Toole argues that “The European Union as we have known it ended over the weekend. That EU project was all about the gradual convergence of equal nations into an “ever closer union”. That’s finished now.”

In his Bild column, Ernst Elitz argues that “The Greeks have crossed every red line. They do not deliver on what they have promised. And no one seems to care. This is how Tsipras is sweeping away Europe’s values… Citizens cannot feel at home in a Europe in which values like trust and reliability are thrown to the wind.” Frankfurter Allgemeine Zeitung’s editor in chief Berthold Kohler writes that “Whether the advantages of the compromise will prevail will only become evident when it is too late to make any corrections.”

An editorial in El País argues, “Tsipras called the referendum hoping to strengthen his [negotiating] position. The result was the opposite. He has accepted that his initial programme was thrashed and erased. He eventually had the lucidity not to condemn his people to the condition of world pariah…He will have to use this lucidity to convince his fellow citizens that he can now be responsible.”

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Romanian Prime Minister Victor Ponta refuses to step down over corruption charges

EUobserver reports that prosecutors from Romania’s anti-corruption agency yesterday “temporarily seized assets” belonging to the country’s Prime Minister Victor Ponta who has been charged with corruption, forgery, money laundering, tax evasion, and conflict of interest during his time as a practising lawyer, before he entered politics. Ponta has refused to heed calls from the country’s President Klaus Iohannis to step down.

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UK faces fine over handling of EU farm payments

The BBC reports that the UK has incurred fines of £642m from the European Commission for the way it manages EU farming payments. The National Audit Office (NAO) said the penalties, imposed since 2005, gave the UK the sixth worst record of the 28 EU member states.

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