Live: Eurozone casts doubts over Greek bailout plan

Greece's parliament backed the government's reform plan containing austerity measures to win a third bailout early today, but with the government suffering significant losses from dissenting lawmakers.

The motion, which sought to authorise the government to use the proposal as a basis for negotiation with international creditors during the weekend, passed with 251 votes in favour, 32 against and 8 voting 'present' -— a form of abstention -— in the 300-member parliament.

Those who voted 'present' or were absent, as well as two of those who voted against, were members of Prime Minister Alexis Tsipras' left-wing Syriza party -- raising questions about the stability of his government.

The dissenters included two ministers -- Panagiotis Lafazanis who holds the energy portfolio and Dimitris Stratoulis who holds the social security portfolio -- and prominent party member and Parliament Speaker Zoe Konstantopoulou.

All opposition parties except the Nazi-inspired Golden Dawn and the Communist Party voted in favour.

If the proposal is approved, Greece would get a three-year loan package worth nearly $60 billion (53.5 billion euros) as well as some form of debt relief. That is far more than the 7.2 billion euros left over from Greece's previous bailout that had been at stake in the country's five-month negotiations until last month. (AP)

16:56 IST Saturday, 11 July 2015

Greece needs debt relief, France's Macron tells German newspaper

A bailout package for Greece needs to include a reduction in the country's debt burden, French Economy Minister Emmanuel Macron told German daily Die Welt in an interview published on Saturday.

The German government has resisted a restructuring of Greece's debts, with Chancellor Angela Merkel opposing a "classic haircut" and the finance ministry saying Berlin would not accept any form of debt reduction that would lower its real value.

But Macron insisted the burden must be eased.

"It is necessary to reduce the debt burden so that the Greek economy does not go under," he told Die Welt.

Outlining the path to solving the Greek problem, Macron said structural reforms needed to be deepened, adding: "More competition doesn't mean saving more!"

Investment was also essential to supporting growth in Greece, said.

"Not to try everything possible to keep Greece in the euro zone would be to accept a step backwards in Europe," Macron said.

Euro zone finance ministers meet in Brussels at 3 p.m. (1300 GMT) on Saturday to discuss an assessment of Athens' latest reform proposals made by European Commission, European Central Bank and the International Monetary Fund.

15:53 IST Saturday, 11 July 2015

Eurozone not certain to agree Greek bailout -sources

Euro zone finance ministers meeting in Brussels on Saturday have serious doubts about Greece's request for a bailout and a deal to start negotiating on the basis of Athens' proposals is far from certain, sources close to the talks said.

Overnight, the European Commission, European Central Bank  and International Monetary Fund gave a positive assessment of the cash-for-reforms plan put forward on Thursday by Greek Prime Minister Alexis Tsipras, according to EU officials.

France, Greece's most powerful ally in the Eurogroup of finance minister, also welcomed the proposals on Friday, raising expectations that ministers would agree to open negotiations over the weekend. That could avert bankruptcy and prevent Greece running out of euros and falling out of the currency bloc.

But Germany and other governments have remained sceptical and two euro zone sources said on Saturday that the demands for new financing from Athens had alarmed some Eurogroup members.

One source, who told Reuters that he was almost certain late on Friday that a deal would be agreed on Saturday, said he was now not so sure, four hours before ministers meet at 1300 GMT.

Senior officials in the Euro Working Group were still in talks in Brussels on Saturday morning to prepare the Eurogroup.

"The high figures for financing needs over the next three years may be too high and too sudden," the first source said. The second said he now put the chances against reaching a deal in the Eurogroup meeting to open negotiations at 60-40.

The sources said experts reckoned that Greece, which asked for a three-year credit from the euro zone's European Stability Mechanism of 53.5 billion euros, would need 82 billion euros to meet its obligations. It could hope for some 16 billion still due from the IMF before March and could also hope to receive nearly 8 billion in other EU funding that it lost its claim to when it failed to complete an earlier bailout deal last month.

However, further funding from the IMF would depend on euro zone governments offering Greece substantial debt relief, the first source said -- something Germany has been very wary of.

A German Finance Ministry spokesman declined comment on a Bild newspaper report that Finance Minister Wolfgang Schaeuble, disenchanted with Greece's presence in the euro, saw Tsipras's proposals as inadequate and opposed opening new talks.

"The minister will this afternoon discuss with his euro zone colleagues the assessment of the institutions," the spokesman said. "The result of the discussion is completely open."

Germany has been the biggest contributor to two previous bailouts worth 240 billion euros to Greece since 2010.

15:00 IST Saturday, 11 July 2015

Germany says result of finmins' Greece meeting 'completely open'

The result of Saturday's meeting of euro zone finance ministers to discuss Athens' latest economic reform proposals is completely open, a German Finance Ministry spokesman said.

Spokesman Frank Paul Weber declined to comment on a report in Germany's mass-selling Bild daily that German Finance Minister Wolfgang Schaeuble regarded Athens' proposals as "inadequate" and opposed further talks.

"The minister will this afternoon discuss with his euro zone colleagues the assessment of the institutions," the Finance Ministry spokesman said. "The result of the discussion is completely open."

Euro zone finance ministers meet in Brussels at 3 p.m. (1300 GMT) to discuss an assessment of Athens' proposals made by European Commission, European Central Bank and the International Monetary Fund.

12:05 IST Saturday, 11 July 2015

Eurogroup confirms received assessment of Greek bailout request

The Eurogroup of euro zone finance ministers has received an assessment from EU and IMF experts of Greece's request for a bailout and its reform proposals, a spokesman for the group confirmed on Saturday.

"Assessment of institutions under Article 13 of the ESM (European Stability Mechanism) Treaty and initial review of the Greek proposals received by Eurogroup, meeting 3 p.m. (1300 GMT)," he tweeted ahead of an emergency meeting in Brussels.

11:45 IST Saturday, 11 July 2015

Greek PM Tsipras says has mandate for talks after parliament vote

Greek Prime Minister Alexis Tsipras claimed a strong mandate to complete negotiations with international creditors after winning the backing of parliament over a painful new package of reform measures.

In a statement issued after the vote in parliament, which the government won with the help of pro-European opposition parties, Tsipras said he had a "strong mandate to complete the negotiations to reach an economically viable and socially fair agreement".

He made no mention of rebels within his own leftwing Syriza party who withheld support for the measures but said his focus was on completing the negotiations.

"The priority now is to have a positive outcome to the negotiations. Everything else in its own time," he said.

11:11 IST Saturday, 11 July 2015

Read out live coverage of the Greek drama from yesterday here.

10:29 IST Saturday, 11 July 2015

Greek Prime Minister Alexis Tsipras (L) is congratulated by lawmakers after a voting session at the Parliament in Athens, Greece, July 11, 2015.The Greek parliament voted overwhelmingly on Saturday in favour of authorizing the left-wing government of Tsipras to negotiate with international creditors on the basis of a reform programme unveiled this week. Reuters. 

10:13 IST Saturday, 11 July 2015

Some comments made by the new Greek Finance Minister Euclid Tsakalotos defending the new bailout plan that Greece submitted. 

He said that the government understands that the agreement is a very difficult one but it always has a cost. He defends the measures in the new plan and says that boosting tax collection will help Greece generate revenues which could be used for the betterment of the economy. 

Tsakalotos stressed that the gains made from this bailout plan wil go to the middle and lower income households. He said that despite the pressure from the IMF and Germany, the government has not introduced any recessionary measures in the new plan. 

9:56 IST Saturday, 11 July 2015

White House says welcomes latest reform proposal by Greece

The White House said on Friday it welcomed the latest proposal by Greece to resolve its debt crisis and that it was something for that country's creditors to weigh.

"We are pleased to see that Greece has taken the step of putting forward a specific proposal, but it's one that their creditors will have to evaluate," White House spokesman Josh Earnest said.

9:55 IST Saturday, 11 July 2015

Greece expects 'many' of its debt demands will be accepted

AFP reports that Greek Finance Minister Euclid Tsakalotos said  believed "many" of his country's demands for debt relief will be accepted by eurozone partners, which are weighing a bailout proposal.

"Many of Greece's debt demands are going to be accepted," he told a parliamentary commission examining the plan.

He notably expressed confidence that Greece will be permitted to roll over a debt of 27 billion euros (USD 30 billion) in bonds held by the European Central Bank to the European Stability Mechanism, which would push back repayments.

Greece has submitted a proposal of reforms it will undertake if its creditors provide it with a third bailout to stave off economic collapse.

Much of the package consists of concessions to the creditors, especially on taxes and cutting pension costs.

Athens is hoping it will pave the way to easing servicing of its massive 323-billion-euro debt mountain, which it says is unsustainable. 

9:24 IST Saturday, 11 July 2015

A lot of developments over the past 12 hours. 

EU, IMF experts give positive assessment of Greek bailout request 

The European Commission, European Central Bank and the International Monetary Fund have given a positive assessment of the Greek government's request to start negotiations on a new bailout, a person close to the
matter said on Friday.

The three institutions were asked by the ESM bailout fund to review proposals for economic reforms made by Greece on Thursday. Based on their recommendations, the Eurogroup of euro zone finance ministers is to decide whether to open negotiations at a meeting in Brussels starting at 1300 GMT on Saturday.

Greek PM Tsipras defends "difficult" choices over bailout

After making a literal u-turn and accepting most of the creditors' demands, Prime Minister Alexis Tsipras defended the painful bailout proposals his leftwing government presented to parliament on Friday, saying they were difficult measures but would help keep Greece in the euro zone.

Arguing that the mix of tax hikes and spending cuts was better on many points than the package rejected by voters in a referendum on Sunday, Tsipras insisted that he had won important concessions on restructuring Greece's enormous public debt.

"For the first time, we have on the table a substantial discussion for a debt restructuring," he said in a debate before parliament votes on endorsing the proposals.

(With Reuters)