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

Moving forward
Updated 29 Sep, 2023

Moving forward

It is hoped that the ECP followed the set rules diligently while demarcating constituency boundaries.
Pipeline in stasis
29 Sep, 2023

Pipeline in stasis

DESPITE repeated assurances by successive governments that the scheme is still on the table, the Iran-Pakistan gas...
Playing in India
29 Sep, 2023

Playing in India

WITH visa issues resolved, and after slight alterations in travel plans, Pakistan’s cricket team finally touched...
Accruing more debt
Updated 28 Sep, 2023

Accruing more debt

We are in midst of the worst, longest economic crisis because of lavish lifestyles of powerful interests.
Israeli normalisation
28 Sep, 2023

Israeli normalisation

OVER the past few weeks, there have been many reports prophesising the impending normalisation of ties between Saudi...
Kandhkot tragedy
28 Sep, 2023

Kandhkot tragedy

THE tragic incident that unfolded yesterday in Sindh’s Kandhkot tehsil, leading to the deaths of at least nine...