Third bailout for Greece facing German unrest

Greece has been working on a third bailout, but German lawmakers are holding up the process, reluctant to push through a deal on short notice.

The bailout plan has a set timeline that aims to get cash to the country before a crucial bond payment is due next week. Chancellor Angela Merkel is receiving resistance though from the parliamentary caucus. Chancellor Merkel wants to hold a lower-house vote o Greece early next week for political and practical reasons, according to Bloomberg.

But at this point, any delay in Germany could jeopardize the deal derailing the already narrow timetable for Greece and national parliaments in other euro-area countries to vote on the three-year deal plan. The deal must go through by August 20 before a payment is due to the European Central Bank.

If the deal does gain legislative approval before that, Greece will be forced to request further bridge financing to cover the ECB payment until the bailout deal is finalized.

“One needs to look closely and then we’ll ask the Bundestag for approval when the common understanding is that this will hold for three years,” Jens Spahn, a deputy to German Finance Minister Wolfgang Schaeuble, said on ARD television. “It has to be convincing that it isn’t just about Aug. 20 and an installment payment, but really about how, together with the Greeks, we can have a lasting solution.”

The four institutions representing Greece’s creditors are: the ECB, the International Monetary Fund, the European Commission and the European Stability Mechanism rescue fund. The four made an initial agreement early on Tuesday regarding measures from pension changes to taxes intended to unlock over 85 billion euros in funds for Greece.

In order to create a buffer for its banks and make loan repayments, Greek Prime Minister Alexis Tsipras’s government needs a quick release of at least 20 billion euros to make that happen.

 

 

Be social, please share!

Facebooktwittergoogle_plusredditpinterestlinkedintumblrmail