ATHENS: Europe moved to re-open funding to Greece’s stricken economy on Thursday, hours after a fractious Greek parliament approved a tough bailout programme in a vote that left the government without a majority and looking to new elections within months.

Prime Minister Alexis Tsipras won the backing of parliament in the early hours of Thursday for the stringent reform measures demanded by Greece’s creditors led by Germany, but was left weakened by a revolt in his left-wing Syriza party.

His Interior Minister, Nikos Voutsis, said that a snap election could be held in September or October, “depending on developments”.

The move by the Greek parliament was enough to persuade the European Central Bank to re-open vital funds for the Greek banking system under its Emergency Liquidity Assistance (ELA) programme, after euro zone finance ministers signalled they would unlock 7 billion euros ($7.6 billion) in bridge loans.

“Things have changed now,” ECB President Mario Draghi told a news conference in Frankfurt. “We had a series of news with the approval of the bridge financing package, with the votes, various votes in various parliaments, which have now restored the conditions for a raise in ELA.” Draghi said the ECB would increase ELA funding by 900 million euros. But he added that it was difficult to make decisions on Greece given the constraints of a programme which was never meant to provide unlimited and unconditional support.

Finnish and Lithuanian lawmakers gave their approval to begin negotiations, a day before the German parliament is due to vote on the issue, while the European Commission said it believed an agreement on providing short-term bridge financing to Greece could come shortly.

However, German Finance Minister Wolfgang Schaeuble underlined the risks still surrounding the negotiations that will need to be conducted over the next few weeks, saying a temporary Greek “timeout” from the euro may still be a better option.

After a warning from the International Monetary Fund this week that Greece’s massive public debt could not be managed without a significant writedown, Schaeuble said that a debt “haircut” was incompatible with euro membership and would mean Greece would have to leave the euro, at least temporarily. “But this would perhaps be the better way for Greece,” he told Deutschlandfunk radio.

Published in Dawn, July 17th, 2015

On a mobile phone? Get the Dawn Mobile App: Apple Store | Google Play

Opinion

Editorial

Afghan puzzle
Updated 28 May, 2024

Afghan puzzle

Unless these elements are neutralised, it will not be possible to have the upper hand over terrorist groups.
Attacking minorities
28 May, 2024

Attacking minorities

WHILE Pakistan has watched many perish in the cauldron of sacrilege, the state has done little to turn down the...
Persistent scourge
28 May, 2024

Persistent scourge

THE challenge of polio in Pakistan has reached a new nadir, drawing grave concerns from the Technical Advisory Group...
Mercury rising
Updated 27 May, 2024

Mercury rising

Each of the country's leaders is equally responsible for the deep pit Pakistan seems to have fallen into.
Antibiotic overuse
27 May, 2024

Antibiotic overuse

ANTIMICROBIAL resistance is an escalating crisis claiming some 700,000 lives annually in Pakistan. It is the third...
World Cup team
27 May, 2024

World Cup team

PAKISTAN waited until the very end to name their T20 World Cup squad. Even then, there was last-minute drama. Four...