Greek parliament OKs reform proposals as basis for talks with creditors

Greek lawmakers have approved a government motion that allows reform proposals to be used as a basis for negotiations with international creditors, as the country seeks a third bailout.

The 300-member parliament passed the motion by majority vote, with 251 lawmakers voting in favor, 32 against and 8 voting 'present' — a form of abstention indicating dissent from their own party line.

In a speech delivered ahead of the vote, Greek Prime Minister Alexis Tsipras sought to persuade lawmakers, including dissenters within his own left-wing Syriza party, to back the proposals and grant his finance minister the authorization to use them as a basis for negotiations with creditors over the weekend.

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Tsipras said his government had made mistakes during his six-month tenure but said he had negotiated as hard as he could.

"There is no doubt that for six months now we've been in a war," he said, adding that his government had fought "difficult battles" and had lost some of them.

"Now I have the feeling we've reached the demarked line. From here on there is a minefield, and I don't have the right to dismiss this or hide it from the Greek people," he said.

But he insisted the latest proposal contains measures that would help the economy and, if approved by Greece's creditors, would unlock sufficient financing for the country to emerge from its protracted crisis and see its massive debt tackled.

The proposed measures, including tax hikes and cuts in pension spending, are certain to inflict more pain on a Greek public who just days ago voted overwhelmingly against a similar plan.

But the new proposal, if approved by Greece's international creditors, will provide longer-term financial support for a nation that has endured six years of recession.

If approved, Greece would in turn get a three-year loan package worth nearly 53.5 billion euros (roughly $75 billion Cdn) as well as some form of debt relief. That is far more than the 7.2 billion euros (roughly 10 billion Cdn) left over from Greece's previous bailout that had been at stake in the country's five-month negotiations until last month.

Defence Minister Panos Kammenos, who heads the government's junior coalition party Independent Greeks, said he was advocating a vote in favour of the proposal even though it goes against his party's principles. The party holds 13 seats in parliament.

"I want to state clearly, I am not afraid of Grexit," he said, referring to the possibility of Greece leaving the euro. "I am afraid of one thing: national division and civil war."

He said he feared failure to get a deal with creditors would eventually lead to civil strife.

Greece's latest proposal was sent to rescue creditors who were to meet this weekend to decide whether to approve it. The country has relied on bailout funding since losing access to financing from bond markets in 2010.

The new measures overturn many of the election promises of Tsipras' left-wing Syriza party, which had vowed to overturn bailout austerity, and come less than a week after 61 per cent of voters opposed similar reforms, proposed by creditors, in last Sunday's referendum.

Creditors reviewing proposal

Greece's major creditors — the International Monetary Fund, the European Central Bank and other eurozone nations — were already fine-combing through the proposals before sending them to the other 18 eurozone finance ministers Saturday. A summit of the full 28-nation European Union in Brussels was to consider them on Sunday, with hopes for a deal before midnight.

French President Francois Hollande described the measures as "serious and credible," though Germany refused to be drawn on their merits. France's Socialist government has been among Greece's few allies in the eurozone during the past months of tough negotiations, with Germany taking a far harder line.

Jeroen Dijsselbloem, the Dutch finance minister who chairs the meetings of the eurozone finance ministers known as the eurogroup, said the proposals were "extensive" but would not say whether he considered them sufficient.

As the government inched closer to a deal to ensure Greece isn't jettisoned out of Europe's joint currency, some Greeks were furious at the proposed measures.

"If this is Europe, then we don't want this Europe," said Aristidis Dimoupulos, a marketing professor in Athens. "If this is the eurozone, we don't care if we go out or in. If in this life we'll be slaves, it's better to be dead."

Others adopted a wait-and-see approach.

"I don't know. The chances are 50-50" for a deal, said Athens resident Omiros Fotiadis.

The proposed austerity measures also drew a large crowd of protesters on Friday night, as several thousand people demonstrated in Athens while lawmakers debated.

Banks have been closed since the start of last week and cash withdrawals were restricted to 60 euros (roughly $85 Cdn) per day. Although credit and debit cards work within the country, many businesses refuse to accept them, insisting on cash-only payments. All money transfers abroad, including bill payments, were banned without special permission.

Alternate Finance Minister Dimitris Mardas said the banks would be gradually restored to operation. They are set to remain closed through at least Monday.

Experts said it is unlikely, even in the event of a deal, that limits on cash withdrawals and transfers will be lifted completely for some time.