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14Aug15

Greek PM faces biggest party revolt yet as bailout approved

Greek Prime Minister Alexis Tsipras faced the widest rebellion yet from his leftist lawmakers as parliament approved a new bailout program on Friday, forcing him to consider a confidence vote that could pave the way for early elections.

After lawmakers bickered through the night on procedural matters, parliament comfortably passed the country's third financial rescue by foreign creditors in five years thanks to support from pro-euro opposition parties.

That clears the way for euro zone finance ministers to approve the first batch of aid from the 85-billion-euro package later on Friday, though deep doubts remain in major creditor Germany about whether Athens will fulfill its pledges.

"I do not regret my decision to compromise," Tsipras said as he defended the bailout from euro zone and International Monetary Fund creditors that comes at the price of tax hikes, spending cuts and tough economic reforms. "We undertook the responsibility to stay alive over choosing suicide."

But the vote laid bare the depth of anger within Tsipras's leftist Syriza party at austerity measures as 43 lawmakers - or nearly a third of Syriza deputies - voted against the bailout deal or abstained.

It also left the government with support from within its own coalition below the threshold of 120 votes in the 300-seat chamber, the minimum needed to command a majority and survive a confidence vote if others abstain.

In response, government officials said Tsipras was expected to call a confidence vote in parliament after Greece makes a debt payment to the European Central Bank on Aug. 20 - a risky move that could trigger the collapse of his government and snap elections.

A senior lawmaker, Makis Voridis, from the opposition New Democracy party said his party would not vote in favor of the government, raising the odds that Tsipras's coalition could be toppled.

Still, some of those who rebelled against Tsipras on Friday could still opt to support the government in a confidence vote - as could other pro-European parties like the centrist Potami and the center-left PASOK, leaving unclear the final outcome.

Fight Starts

The vote was only the latest in a series of events highlighting the deepening rift within Syriza, which stormed to power this year on a pledge to end austerity once and for all, before Tsipras accepted a bailout under threat of a euro exit.

The leader of Syriza's far-left rebel faction, former energy minister Panagiotis Lafazanis, took a step toward breaking away from the party on Thursday by calling for a new anti-bailout movement.

"The fight against the new bailout starts today, by mobilizing people in every corner of the country," said a statement signed by Lafazanis and 11 other Syriza members.

The rebels insist the government should stand by the promises on which it was elected, to reverse the waves of spending cuts and tax rises which have had a devastating effect on an already weak economy over the past few years.

Adding to Tsipras's troubles, parliamentary speaker and Syriza anti-austerity hardliner Zoe Konstantopoulou snubbed a request from Tsipras to speed up handling of the bailout bill.

Instead, she raised a long series of procedural questions and objections which held up proceedings that were due to be wrapped up on Thursday, infuriating lawmakers. The delay forced Finance Minister Euclid Tsakalotos to miss the vote because he had to depart for the euro zone finance ministers' meeting in Brussels.

As talks in parliament dragged on through the night, tempers flared, with the conservative opposition accusing Tsakalotos of making "provocative" comments and warning him not to take its support for the deal for granted.

With the bill's passage, focus turns to a meeting of euro zone ministers in Brussels who now must approve the deal so aid can be disbursed before Athens must make a 3.2 billion euro debt payment to the European Central Bank on Aug. 20.

Athens is keen to get ratification so it can avoid having to take a new bridge loan to make the payment - a prospect Tsipras called a return to the country's crisis days.

But Germany - the biggest contributor to Greek bailout programs - remains deeply skeptical that Athens will live up to pledges to reform its economy and political system, raising doubts about whether it will seek to hold up approval.

Other more long-term concerns also remain. The IMF has made clear it would participate in the program only if Europe agreed to ease Greece's huge debt burden.

But Berlin opposes writing off any Greek debt, although it is open to the idea of extending grace periods before Athens has to start paying interest and principal on its bailout loans.

Tsipras has long argued Greece cannot repay all its debts and demanded a partial write-off. The creditors have agreed to consider the issue only after a review in October of the government's implementation of its side of the deal.

[Source: By Lefteris Papadimas and Karolina Tagaris, Reuters, Athens, 14Aug15]
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