Germany is one of several European Union countries whose parliaments must sign off of any debt deal for Greece, as the legislature in Austria also did Friday.
The German parliament is to vote on Friday over whether to allow talks on a third bailout package for Greece to go ahead, as pressure mounts on the country to concede debt relief for Greece.
German lawmakers are expected to give Berlin a clear green light on Friday to start negotiations on a third bailout programme for Greece, despite Finance Minister Wolfgang Schaeuble questioning whether it will succeed. “It’s not going to be easy”.
Moody’s notes, however, that “judging by recent events and the deep economic problems and social divisions within society, it is highly uncertain whether the Greek authorities have the capacity to achieve agreed objectives and to abide by its creditor’s conditions”. “I support us not discriminating against them when it comes to taxes, and to remove any other discrimination wherever we may find it”.
Christoph Schmidt, an economist who advises German Chancellor Angela Merkel (known as one of her “wise men”), said the vote was a step towards Greece getting the bailout.
His comments on the eve of the parliamentary vote mirrored ambivalence among German policy makers about aiding Greece even as Merkel lobbied her caucus to back the proposed aid package. Greeks will still be limited to cash withdrawals of 60 euros per day.
“What we’re witnessing is European solidarity in action”, said Valdis Dombrovskis, the EU Commission’s vice president for the euro.
More refugees are seeking asylum in Germany than any other country, driven from their homes by violent domestic and worldwide conflict, The New York Times reports. Last September, Interior Minister Thomas de Mazière snapped at an audience of high school and college students, saying they were sitting “high and dry” while Germany’s cities were being overwhelmed.
Germany is likely to continue playing a key role in Greece’s future as it is the largest single bailout contributor.
“The principle… of responsibility and solidarity that has guided us since the beginning of the European debt crisis marks the entire result from Monday“, Ms Merkel told the special session of parliament. “The alternative to this agreement would not have been an orderly timeout from the euro because it had been wanted from Greece and organized by all, but rather predictable chaos”.
He said many economists, including Greek ones, have expressed doubts that Greece could emerge from its financial crisis without a reduction in its debt, which the global Monetary Fund has called unsustainable.
About a quarter of Syriza lawmakers voted “no” or abstained, refusing to accept the demands for yet more austerity and reform included in the deal with Greece’s creditors.
Tsipras removed two ministers who had voted against the government line. Valavani had announced her resignation immediately before the vote.
To prevent a catastrophic “Grexit“, the parliament in Athens early Thursday adopted sweeping reforms on pensions, taxes, labour laws and state asset sales that were harsher than those Greeks had rejected in a July 5 referendum. Nevertheless, Schaeuble repeated on Thursday that the suggestion he made in the weekend negotiations that Greece might be better off temporarily leaving the euro zone – a view that resonates with some of his fellow conservatives.