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Greece MPs back the Eurozone deal amid protests outside parliament building

Greece MPs back the Eurozone deal amid protests outside parliament building

The bailout measures package has been approved by Greek Parliament following the country’s MPs vote- http://www.theguardian.com/business/live/2015/jul/15/greek-crisis-mps-bailout-imf-debt-relief-alexis-tsipras-live (follow the link for more information). The members of parliament voted in support of the proposed economic reforms so that the country can get a fresh bailout amounting to $96 billion.

Greece is heavily indebted and it needs bailout money as a way of avoiding a ‘Grexit’ from Euro and bankruptcy. However, the reforms that the MPs supported are very unpopular. According to majority of the Greeks, European lenders have imposed strict, harsh reforms on the country’s tax and pension systems.

On Wednesday, there were protests outside the building of the Greek parliament in Athens. The protests turned violent before the vote. Protesters threw Molotov cocktails while the police use tear gas to disperse them- http://money.cnn.com/2015/07/15/news/economy/greece-bailout-vote-parliament/index.html?iid=hp-toplead-intl (follow the link for more information).

For several months, Alexis Tsipras, the Prime Minister and his party, Syriza rallied against these reforms. However, Tsipras was compelled to accept the reforms because the country was almost becoming bankrupt.

Measures that have been approved formally by the Greece’s parliament

Some of the measures that the parliament has approved formally include reforming tax code in order to generate more revenue. This includes raising restaurant meals’ sales taxes and taxes on other items up to 23 percent. It also includes eliminating discounts on taxes for popular islands in Greece.

The reforms also include an overhaul of the Greece’s pension system. This includes setting a standard age for retirement at 67 as a way of discouraging early retirement.

Additionally, the reforms entail safeguarding the national statistics agency’s independence. This institution keeps data regarding the debt that the country has and overall economic growth.

Following the approval of these reforms by the parliament, Greece will now implement rules that will enable it to meet the targets of its budget. This may require more cuts on government’s spending.

Although Tsipras said earlier that the deal was unbelievable to him, he urged the members of parliament to approve it- http://www.bbc.com/news/world-europe-33535205 (follow the link for more information). Tsipras said that he would implement the proposals though “irrational” in order to keep banks from collapsing and to prevent a disaster.

While giving a passionate speech before the MPs voted for the reforms, Tsipras said that the Greeks are fully aware and they know what differentiates people who hand in weapons and people who struggle to win a battle that is unfair.  The vote went through though 32 members of his party voted NO while six abstained.

Zoe Constantopoulo, the parliamentary speaker was among those who voted NO. Mr. Zoe walked out while the debate was going on and returned to make his fiery speech that condemned what he called a black day for Europe democracy.

Yanis Varoufakis, formally the finance minister, also voted NO after writing a scathing blog regarding the bailout package earlier.

Meanwhile, the European Commission on Wednesday published its assessment that showed an optimistic view for the sustainability of the Greece’s debt. The report by the commission said that it is possible for the debt to be rescheduled if the reforms are implemented. However, it ruled out the requested debt write-offs.

 

Sources

http://www.theguardian.com/business/live/2015/jul/15/greek-crisis-mps-bailout-imf-debt-relief-alexis-tsipras-live

http://money.cnn.com/2015/07/15/news/economy/greece-bailout-vote-parliament/index.html?iid=hp-toplead-intl

http://www.bbc.com/news/world-europe-33535205

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