Greek parliament passes reform bill full of bailout measures

Sun, 22 May, 2016 - 22:52

Greece's parliament on Sunday passed an omnibus reform bill providing for tax hikes, more austerity reforms and a new privatisation superfund, which will manage almost all state property.

There was one small dent in the left-led government majority of 153 politicians in the 300-member Parliament, with one Syriza party MP voting against the superfund and the contingency mechanism that will trigger automatic spending cuts if Greece fails to meet the targets of its bailout agreement with its creditors.

Greece now hopes the creditors will complete the first assessment of its third bailout programme, freeing loan disbursements that will allow Greece to meet its obligations and avoid default.

Greece also hopes the vote on the 7,500-page will open the way to a discussion on easing the terms of its loans.

But it will have to navigate differences between the International Monetary Fund, which call for a generous debt cut albeit with more austerity measures, and the Europeans, chief among them German finance minister Wolfgang Schauble, who want no such cuts.

At the end of an acrimonious four-day debate, including in committee, prime minister Alexis Tsipras blasted the main conservative opposition and other centrist parties for having supported last August's third bailout deal, but not the laws that have been voted on as prerequisites for concluding the assessment.

Opposition leader Kyriakos Mitsotakis countered that the bailout terms never included the superfund, which will expire in 2115.

He said the precise terms were the results of Mr Tsipras' failure to negotiate reforms he and his leftist party have never believed in.

He said he would prefer spending cuts to higher taxes and would negotiate with the creditors for lower annual levels of budget surpluses (2% of GDP instead of 3.5%) from 2018 onward.

The government majority was momentarily shaken on Saturday when the junior partner, right-wing Independent Greeks, objected to freezes in pay hikes for so-called "special categories" of civil servants, including military, police, diplomats, judges, public health service doctors and university professors.

The pay cuts, which would have saved about €120m, were shelved and will be partly replaced by bringing forward taxes on Internet users and beer.