Greece poised to ratify accord with creditors

Greece's government and its creditors found common ground on a third bailout agreement late Tuesday ahead of a scheduled Thursday vote by parliament. The deal was the product of 23 hours of marathon talks and must be also ratified by some eurozone countries.

Greece and its creditors - the EU, the European Central Bank, and the International Monetary Fund - are under pressure to finalize the deal by Aug. 20 when a 3.4 billion euro ($3.76 billion) payment to the ECB is due.

Syriza to face backlash

The deal has caused a rebellion within Prime Minister Alexis Tsipras's left-wing Syriza party, forcing him to rely on opposition votes.

A Greek Finance Ministry official said the pact would be worth up to 85 billion euros in fresh loans over three years with Greek banks receiving 10 billion euros immediately.

But doubts remain about whether the leftist Syriza government, elected on a pledge to reverse austerity, can implement the punishing terms of this latest deal that critics say compromises the party's principles and platform.

That's because the proposed bailout would be in exchange for imposing fiscal and other policy measures including a gas market overhaul, the removal of most early retirement schemes, the elimination of fuel price benefits for farmers and an increase in some taxes, none of which will be popular with voters.

The government insists it has also gained concessions including greater control over labor reforms, avoiding a mass sell-off state assets and softer deficit targets.

"It is a very tough deal. The left had to either escape or take huge responsibilities and prove it can help society," Health Minister Panagiotis Kouroublis told local radio, saying it will be up to Greek voters to weigh in. "After this deal the prime minister should call for elections, so that the Greek people can vote on whether they approve the program or want something else."

Austerity drives unemployment

The austerity programs imposed by previous governments to satisfy creditors have reigned in public spending. But the measures also compounded a deep recession and pushed unemployment to a record high. Figures next week are expected to confirm that Greece's recession deepened in the second quarter.

Though the Syriza government was elected on a staunchly anti-austerity platform in January, it was forced to retreat from this stance after bailout talks came close to collapse last month.

Greece has relied on bailouts worth a total 240 billion euros from eurozone member states and the International Monetary Fund since concern over its high debts locked it out of bond markets in 2010. To secure the loans, successive governments have had to implement austerity measures through spending cuts, tax hikes and other neoliberal reforms.

jar/bw (AFP, Reuters, AP)