Tsipras secures backing of Greek MPs for crucial reforms

Financial Times Financial Times

Last updated: July 23, 2015

The Greek parliament backed a second round of reforms demanded by creditors early on Thursday but the vote revealed a deepening rift in the radical leftwing Syriza party of Alexis Tsipras, the prime minister.

A draft law setting up a new civil justice code and introducing an EU directive on bank recovery and resolution for collapsing lenders was approved by 230 votes for, to 63 against with five abstentions.


Repeating the same arguments he used in a debate last week on the first round of reforms, Mr Tsipras said he had been forced to choose between a Grexit, a disorderly default or implementing a tough economic programme.

“We must all adapt ourselves to this new situation,” he said, claiming that “Europe’s conservative forces had achieved only a Pyrrhic victory over Greece”.

A total of 36 Syriza MPs voted no or abstained, two fewer than last week’s vote, but another five chose to abstain from approving a key article in the civil service code.

Legislators from three pro-European opposition parties again backed the government even though they blasted Mr Tsipras during the debate for taking Greece to the brink of an exit from the eurozone.

Yanis Varoufakis, the outspoken finance minister who voted against last week’s package, also backed the government’s proposals, claiming he had proposed the same legal and banking reforms while in office.

As the debate began anti-austerity protesters gathered outside parliament in a demonstration organised by Greece’s federation of public sector unions, normally a stronghold of Syriza loyalists.

If it was not for his wife’s credit card, George Kollias’ music start-up would have been one of the thousands of Greek businesses to have collapsed this year. Hit by recession, political uncertainty and capital controls, the once-blooming Greek start-up scene has been crippled by the country’s financial crisis, leaving its entrepreneurs facing the stark choice of giving up, leaving the country, or praying for change.

The protest was briefly disrupted by extremists throwing petrol bombs at riot police guarding the parliament building.

The vote opened the way for Greece to begin negotiations with creditors on a new €86bn bailout on Friday with the aim of striking a deal by mid-August.

The timetable is exceptionally tight but the cash-strapped government needs funds from the new bailout to be disbursed by August 20 when it has to make a €3.2bn repayment the European Central Bank.

Panayotis Lafazanis, former energy minister and the leader of the Syriza rebels, warned they would continue to challenge the government while at the same time claiming that differences within Syriza “are a strength, they are not the party’s Achilles heel”.

As leader of the Left Platform, the party’s official internal opposition, Mr Lafazanis until last week was able to promote his position that Greece should leave the euro and adopt a “new drachma” without incurring criticism from Mr Tsipras.

But a government spokesman has admitted that a clash looms between Mr Tsipras and Mr Lafazanis, whose supporters are believed to hold a majority in the 200-member Syriza central committee which decides the party’s strategy.

Zoi Konstantopoulou, the combative speaker of parliament who is also seen as another potential leader of an anti-bailout splinter group, again voted No, after shrugging off demands from pro-European legislators during the debate that she resign.