Greece's Parliament Approves Austerity Measures

Greece's Parliament Approves Austerity Measures

7:42pm Jul 15, 2015

Updated at 7:42 p.m. ET

Greece's Parliament approved the controversial austerity measures struck Monday with the country's creditors, but the vote created a rift within the ruling left-wing Syriza party.

"We don't believe in it, but we are forced to adopt it," Prime Minister Alexis Tsipras appealed to lawmakers before the vote.

The vote was 229-64, with six abstentions. Thirty-two of the "no" votes came from Syriza lawmakers; six of them voted present. Also voting "no" were members of the far-right Golden Dawn.

Tsipras needed the support of 121 government lawmakers. In the end, 124 backed the bill.

Nick Malkoutzis, deputy editor of the Greek daily Kathimerini's English edition, tweeted that this means "Tsipras keeps head above water."

The measure approved today raises taxes, cuts spending and overhauls the country's pensions system. The vote allows Greece to begin negotiations with its creditors on a third bailout.

Joanna Kakissis, who is reporting for NPR from Athens, tells our Newscast unit that Syriza was elected six months ago to end austerity. She says:

"[M]ore than half of the leftist party's central committee signed a statement slamming the deal signed by their leader, Prime Minister Alexis Tsipras. Former Finance Minister Yanis Varoufakis compared the deal to the 1919 Treaty of Versailles, which crushed Weimar Germany and helped fuel World War II."

"These negotiations failed because the creditors refused the only issue that would put Greece on a viable path again," Varoufakis said, "the issue of debt relief."

He was among the prominent "no" voters.

Tsipras said though the deal signed Monday was flawed, the alternative, an exit from the eurozone, was worse.

Debt relief for Greece was the focus of a study released Tuesday by the International Monetary Fund, one of Greece's creditors, which called the country's debt burden "highly unsustainable." The fund said it would not support the new bailout unless the agreement reduced the country's debt burden.

That position puts the Washington-based IMF in conflict with Greece's other creditors — the eurozone and the European Central Bank. The New York Times notes:

"The deal announced Monday morning stated that the creditors would not forgive any Greek debt and offered only a general assurance of further discussions about reducing annual debt payments by stretching out payment periods or reducing interest rates.

"The fund's decision to go public with its stance suggested that the draft agreement would be only the starting point for further negotiations about the sustainability of Greece's debt and the willingness of its lenders to recognize they might not get all their money back."

Greece owes its creditors about $330 billion, according to the Times, an amount that has been estimated to be 177 percent of the country's gross domestic product.

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