Greek prime minister Alexis Tsipras urged Syriza party colleagues to help Greece stay in the euro zone by approving tough proposals for €13 billion in cuts and tax increases.
He faced resistance from some MPs left stunned by his acceptance of previously rejected austerity measures, however, and large crowds demonstrated outside parliament last night as the debate on the package took place.
Applauded by colleagues as he entered a party meeting just hours after the proposals had been published, Mr Tsipras told them the government was confronted with “crucial decisions,” according to Greek officials. “We got a mandate to bring a better deal than the ultimatum that the eurogroup gave us, but certainly not a mandate to take Greece out of the euro zone,” he said.
The proposals were signed off by the government, but Mr Tsipras then sought authorisation from parliament to negotiate with the creditors based on the 13-page document.
The proposals were expected to be approved with help from the opposition parties, but losing a significant number of his own deputies would threaten Mr Tsipras’s majority and destabilise his coalition.
Five Syriza MPs signed a letter saying it would be better to return to the drachma than to accept more austerity with no debt write-off. "The proposals are not compatible with the Syriza programme," energy minister Panagiotis Lafazanis, who belongs to the party's far-left faction, said.
Reform package
The latest reform package was similar to a creditors’ document Greeks rejected in a referendum just last Sunday. Under the proposal, Greece would ask for €53.5 billion to help cover its debts until 2018, a review of primary surplus targets in the light of the sharp deterioration of its economy and an easing of the country’s huge long-term debt.
In exchange Athens said it would agree to a range of cuts and tax increases, including defence spending reductions, a timetable for privatising state assets, hikes in VAT for hotels and restaurants and cuts to a top-up payment for poorer pensioners.
“We all feel betrayed,” said Nefeli Koulouriotti, a student who joined last night’s Syntagma Square demonstration, organised by a communist-backed trade union. “They were supposed to reject [austerity]. That’s what people elected them to do.”
She believed the government alone wasn't at fault, however. "There is a lot of pressure from Europe. Europe controls us, not our government. We have no power. The only thing left is to protest."
Holding aloft a banner reading “Nationalise the Banks”, Giorgos Karabelas (44) said the government should have withdrawn Greece from the euro and printed a new currency. “I’m going to pay for this,” he said. “They want to increase VAT, for example, and that’s something that everyone pays – no difference between me and a rich guy.”
As the parliamentary debate got underway, former finance minister Yanis Varoufakis said he supported the effort to renegotiate Greece’s debt but was unable to attend parliament “for family reasons”.
Greek banks have been closed for almost two weeks and ATM withdrawals have been limited to €60 a day under capital controls introduced by the government.
The banks have relied on an ECB-approved emergency credit line from the domestic central bank to dispense rationed cash and are hoping that they can be reopened by the end of next week. They are officially closed until Tuesday, but even if a deal is reached at the weekend it could take more time before the banks can reopen.
With Greece on the brink of leaving the euro zone, a poll published yesterday showed most Greeks want their country to retain the single currency. A total of 84 per cent wanted to keep the euro, according to the poll for Parapolitika newspaper, researched before the Greek proposals were published, with just 12 per cent favouring a return to the drachma.
