German lawmakers back talks on third bailout for Greece

German lawmakers back talks on third bailout for Greece

PanARMENIAN.Net - German lawmakers gave their go ahead on Friday, July 17, for the eurozone to negotiate a third bailout for Greece, heeding a warning from Chancellor Angela Merkel that the alternative to a deal with Athens was chaos, Reuters reports.

The Bundestag lower house of parliament, whose backing is essential for the talks to start, decisively approved the move by 439 votes to 119, with 40 abstentions.

Popular misgivings run deep in Germany, the eurozone country which has already contributed most to Greece's two bailouts since 2010, about funneling yet more aid to Athens.

Finance Minister Wolfgang Schaeuble has questioned whether a new program will succeed, although the creditors' offer to Athens includes the conditions for more austerity and economic reform that Berlin had demanded.

But Merkel argued for negotiating a new deal to prevent a Greek exit from the euro - the "Grexit" that might undermine the entire currency union - and said suggestions Athens might temporarily leave the euro wouldn't work.

"The alternative to this agreement would not be a 'time-out' from the euro ... but rather predictable chaos," she told the Bundestag. "We would be grossly negligent, and act irresponsibly, if we didn’t at least attempt this way."

Schaeuble himself has suggested that Greece might be better off taking such a time-out from the euro zone to sort out its daunting economic problems.

But the conservative chancellor said neither Greece nor the other 18 euro zone member countries were willing to accept the idea. "Therefore this way was not viable,” she added, according to Reuters.

She still thanked Schaeuble - her most powerful ally - for his work in the long, grueling talks which produced the new bailout plan last weekend. Lawmakers gave him resounding applause while Schaeuble nodded and gave a wry smile.

Despite his misgivings, Schaeuble lined up with his boss. "I ask you all to vote for this request today. The government didn’t submit the request easily," he told the Bundestag. "It's a last attempt to fulfil this extraordinarily difficult task."

Merkel also won support from the Social Democrats, the junior coalition partner. "Every debate about a Grexit must now belong to the past," said Social Democrat leader Sigmar Gabriel, who is also vice chancellor.

The Greek parliament approved the new bailout offer in the early hours of Thursday, although Prime Minister Alexis Tsipras had to rely on opposition support after some lawmakers from his left-wing Syriza party rebelled.

Tsipras moved on Friday to replace his energy minister, one of the rebels, a government source said.

Some Syriza members refuse to accept the demands for yet more austerity and reform included in the deal with Greece's creditors. The Greek electorate had already rejected an earlier offer in a referendum, and the latest is even tougher.

Still, the Greek parliamentary approval opened the way for European action to stave off Grexit, at least for the time being. The European Central Bank increased emergency funding to keep the country's banks from collapse.

European Union finance ministers also approved 7 billion euros in bridge loans to Greece, allowing it to avoid defaulting on a bond payment to the ECB next Monday and clear its arrears with the IMF.

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