Tsipras wins backing for bailout reforms

Syriza’s thin majority is enough to pass new austerity measures

ATHENS – Greece’s parliament approved late Friday night a package of thorny pension and tax reforms demanded by the country’s creditors to unlock another €2 billion in vital bailout funds.

In Alexis Tsipras’s first parliamentary test since winning reelection last month, lawmakers in the 300-seat legislature voted 154 to 140 in favor of the reform bill.

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Pro-European opposition parties backed the leftist premier when he made a dramatic U-turn in July to accept the harsh terms of a third multi-billion euro bailout, but they told Tsipras he could no longer depend on them to support unpopular measures. Many MPs voted in favor of certain articles but against the bill as a whole.

“What’s good for the country, we’ll vote for. But when it’s tax and it’s recessionary, we will be against it,” Vangelis Meimarakis, leader of the main opposition party New Democracy, told parliament during the long and occasionally stormy debate.

Tsipras accused his opponents of flip-flopping, drawing jeers and applause from the floor.

“You were the ones who voted in August for the (bailout) agreement and today you refuse to. Are you pretending to be anti-bailout? You, who agreed to everything the creditors asked for five years?” he said.

Still, a pre-election purge of far-left members of Tsipras’ Syriza party meant the government’s slim 155-seat parliamentary majority was enough to carry the bill of so-called prior actions stipulated by the €86 billion rescue program.

Opposition leaders did express support for tougher tax evasion penalties, which were among the measures demanded by Greece’s international creditors — the European Commission, the International Monetary Fund and the European Central Bank.

Tax dodgers could face hefty fines and jail terms under the new legislation, which also cuts some pensions and raises the retirement age to 67 by 2022. Broader reforms include lowering the price of generic drugs and liberalizing the natural gas market.

A controversial proposal to make landlords pay taxes in advance was withdrawn following complaints that it might force property owners to evict tenants who had fallen into arrears.

Civil servants belonging to the ADEDY union and members of the Communist PAME group held demonstrations in central Athens as lawmakers debated the austerity bill.

The protest against the reforms was relatively muted, however, reflecting a mood of resignation among many Greeks wearied by a year of elections, capital controls and arduous debt talks that pushed the country to the brink of a “Grexit” from the eurozone.

“For the moment, there’s a kind of honeymoon between the government and the people,” said Grégory Claeys, a research fellow at the Brussels-based Bruegel think tank.

“The opposition say the prior actions are recessionary, but they did the same. Syriza was the biggest opposition to them and now they’re in power so there’s a feeling of resignation in the country,” he said, adding that reduced political uncertainty could counterbalance the recessionary impact of fresh austerity policies.

Tsipras said passing the roughly dozen new measures would pave the way for a smooth quarterly review by creditors later this month and the recapitalization of the country’s ailing banks by year’s end. Successful completion of the first review is a condition for starting negotiations on debt restructuring, though any haircut is opposed by most of the creditors, including Germany.

“They’re difficult measures and it’s our duty to implement them,” Tsipras told parliament. “But we have a strategy to move towards the review and the recapitalization of the banking system. We cannot always have red lines, we need to focus our efforts and after the review it will be very important to talk about debt relief.”