16/07 – Agreement adopted by Greek parliament amid large Syriza rebellion

The Greek crisis continues to draw blanket coverage, a few days after the deal was reached. Despite the Greek parliament adopting the agreement with a large majority yesterday evening, some media point out all the problems ahead, including the 20 July debt repayment deadline, the debt cut required by the IMF, and whether Greece can be trusted with passing the reforms. The deal was adopted yesterday with a wide parliament majority of 229 MPs and a heavy loss of 39 MPs from the government majority, Naftemporiki reports.

Meanwhile, protestors threw petrol bombs and clashed with riot police. The WSJE notes that the scale of the rebellion among Syriza lawmakers could determine how long Mr Tsipras can continue in office without reshaping his coalition or calling new elections. Hugo Dixon calls for Tsipras to form a national unity government that would have the support of around two-thirds of the Parliament in the INYT.

In a commentary in the FT, former Greek Minister of Finance George Papaconstantinou, also says that Mr Tsipras needs now to disown his old comrades of the extreme Left, swiftly reshuffle and broaden his cabinet, and govern as a minority government with the help of the opposition.

20 July is the first deadline ahead for the Greek government to repay its debt to the ECB and IMF in order to continue to get financing from them. Several media report on the possibility of a €7 billion EFSM loan, as the European Commission proposed yesterday, despite the hesitation expressed by non-euro area countries such as Britain and the Czech Republic. To quiet the concerns of countries such as Great Britain and Bulgaria, the European Commission is working on ways to safeguard non-euro countries from the negative consequences, SZ reports.

Naftemporiki adds that Brussels is optimistic that the decision will be made today. The European Commission also proposed express financing to Greece via the structural funds of the EU that cover the community funds of the periods 2007-2013 and 2014-2020 and via the investment plan for Europe yesterday, Naftemporiki also reported. Keeping the promise he had given during the last weeks regarding the mobilisation of the €35 billion EU funds that correspond to Greece, EC President Juncker passed a proposal fully adapted to the dramatic situation of Greece at yesterday’s meeting of the European Commission.

Naftemporiki highlights that never before the Commission had proceeded to such a big facilitation to a Member State, moving within the limits of legality. Regarding the possibility of a debt cut, required by the IMF in a note on Tuesday, Naftemporiki says the European Commission left open the possibility of a debt relief in its assessment for the sustainability of the Greek debt, excluding however a debt write-down.

Josh Barro argues in the INYT that the IMF’s memo may finally force eurozone members to either move closer to fiscal union in one non-loan form or another, money they will give Greece that they never get back, or break up. Alistair Osborne in The Times questions the actions of the IMF, which has put debt relief back on the table – but only by raising the risk of Grexit. Berliner Zeitung’s Stephan Kaufmann writes that the IMF’s request is not a charitable gesture. The mistake of the Greek bailout is that the EU had rejected a debt cut back in 2010; now the debt cut is a possibility again, except that now it affects the tax payers and not the private creditors, as it would have in 2010.

Meanwhile, doubts remain about whether Greece can implement the reforms. Bild reports that many in the Federal Government “secretly” hope for a Greek withdrawal of the Eurogroup. Moreover, the national parliament of certain EU member states could still vote against a third aid programme for Greece. In a commentary in Welt, Olaf Gersemann comments on Mr Tsipras’ interview where he stated that he takes over responsibility for an agreement he does “not believe in.” Mr Gersemann stresses that Mr Tsipras will never really be a partner, but always a foe and it was to be expected that disillusionment would follow the relief on Monday morning.

Le Figaro‘s editorial considers that asking Greece to “conduct more reforms in three days than France […] in three years” is unrealistic and unreasonable. Hardly has the agreement, a “masterpiece of political and economic intervention”, been reached when pessimism is making its come-back, editorialist Philippe Gélie notes. In an interview with Libération, Nobel-prize winning economist Joseph Stiglitz does not mince his words when criticising the European agreement. Instead of working on a Greek debt relief, Germany is imposing austerity measures which will bring Greece to its knees and will imply a “very dangerous” intrusion in Greece’s sovereignty, Mr Stiglitz warns.