Merkel Urges Lawmakers to OK Greek Deal

BERLIN (AP) -- Chancellor Angela Merkel urged German lawmakers Friday to vote in favor of a third bailout package for Greece, arguing that the cash-strapped country faces chaos without a deal.

The proposed bailout, which was agreed Monday, has already cleared a number of hurdles and most observers think the German Parliament will overwhelmingly back the plan for the commencement of detailed discussions between Greece and its European creditors.

"The principle ... of responsibility and solidarity that has guided us since the beginning of the European debt crisis marks the entire result from Monday," Merkel told a special session of Parliament.

The alternative to an agreement, she added, "would not be a time-out from the euro that would be orderly ... but predictable chaos."

On Monday Merkel signed off on three-year bailout for Greece that is expected to be worth 85 billion euros ($93 billion). Germany has been the largest single contributor to Greece's previous two bailouts, and has taken a hard line, insisting on stringent spending cuts and tax hikes in return.

Merkel's coalition has around four-fifths of the parliamentary seats and approval looks assured. Still, bailing out Greece isn't popular in Merkel's conservative bloc and 48 of its 311 lawmakers said Thursday that they would vote against. Its coalition partners, the center-left Social Democrats, appear to be solidly behind the deal.

The chancellor acknowledged concerns over the chances of a successful bailout, stressing there will be strict monitoring of Greece's reform efforts and that "simple declarations of intent are not enough."

She will have to return to Parliament to seek approval for the final deal when the negotiations are concluded. Most indications are that the detailed bailout talks will take four weeks or so.

"I know that many have doubts and concerns about whether this road will be successful, about whether Greece will have the strength to take it in the long term, and no one can brush aside these concerns," she said. "But I am firmly convinced of one thing: we would be grossly negligent, even irresponsible, if we did not at least try this road."

Merkel's finance minister, Wolfgang Schaeuble, who has talked particularly tough on Greece, said "the German government did not take this proposal lightly." He added that if Greece does its part, then Germany will do its utmost to "making this last chance a success."

In Athens, Prime Minister Alexis Tsipras is widely expected to reshuffle his Cabinet Friday or over the weekend, following a rebellion within his party over a parliamentary vote to approve the measures demanded for new bailout talks to start.

A little more than a quarter of Tsipras 149 radical-left Syriza party lawmakers either voted against or abstained in the vote, including two cabinet members — the energy and welfare ministers — as well as the parliament speaker and the former finance minister, Yanis Varoufakis. Tsipras still won an overwhelming majority as three opposition pro-European parties backed the proposals.

The legislation, which includes consumer tax increases and pension cuts, was demanded by Greece's European creditors before negotiations on a third bailout could begin. Elements of the bill are implemented immediately, with changes to consumer tax coming into effect Monday, the finance ministry said.

The Greek Parliament's approval paved the way for an increase in the amount of emergency liquidity assistance to Greek banks from the European Central Bank. As such, the government said Thursday that banks in Greece would reopen Monday for limited transactions, for the first time in three weeks after capital controls were imposed June 29 ahead of a referendum Tsipras called on creditor proposals.

A central bank official said the Bank of Greece was working with the finance ministry and examining all possibilities so the banks could open as soon as possible. The official spoke on condition of anonymity because the discussions were not public.

Greeks have been limited to cash withdrawals of 60 euros ($67) per day since the banks shut.

Tsipras has acknowledged that the package he signed up to went against his party policies and his election promises to repeal austerity imposed over the last five years in return for Greece's two international bailouts. But he has insisted he had no other choice, as the alternative would have seen Greece catastrophically forced out of Europe's joint currency, the euro.

In a party meeting Thursday, Tsipras criticized the hardliners who voted against him, arguing that their decision was "in conflict with the principles of comradeship and solidarity and at a crucial time creates an open wound," according to a government official at the meeting. The official revealed details of the closed-door meeting on condition of anonymity.

The dissenters' decision, Tsipras said, forced him to continue governing with a minority government until Greece's bailout deal is concluded — something expected to take a month or more.

(KA)