The left-wing of Syriza are likely to revolt against the proposed deal
GREEK Prime Minister Alexis Tsipras' has issued a proposal to eurozone finance ministers for a three-year EUR53.5bn bailout deal that includes cuts similar to that rejected in Greece's referendum, and may prove difficult to get through his own party and the Greek Parliament.
The left of the Syriza party, which is the majority in a coalition government, are likely to revolt against the deal in the Greek parliament, meaning Tsipras may have to rely on the votes of opposition parties to get the bailout deal through.
Tsipras said after proposing the deal: "We are confronted with crucial decisions.
"We got a mandate to bring a better deal than the ultimatum that the Eurogroup gave us, but certainly not given a mandate to take Greece out of the eurozone."
Tsipras is reported to have told Syriza MPs in a meeting in parliament that "we are all in this together".
The EUR13bn in austerity includes many measures considered red-lines when the decision was taken to call a referendum on the creditors' proposal of 26 June, which was overwhelmingly rejected by a 61 per cent vote against the proposal.
The reforms include cuts to pensions, ending tax breaks for the country's main islands, VAT increase to 23 per cent on restaurants, privatisation of the electrical grid company and regional airports, and public-sector wage cuts from 2019. It's unclear at this stage what, if any, debt restructuring is included in the proposals.
The package was not signed by Energy Minister Panagiotis Lafazanis, who leads the left platform wing of Syriza that is pro-Grexit.
Lafazanis urged the prime minister not to agree to a deal on Thursday [9 June] evening, saying that a No vote in the referendum should not become a "humiliating Yes".
He added: "The worst, the most humiliating and unbearable one, is an agreement of surrender, looting and subordination of the people and the country.
"This choice is something we will never do."
Tsipras' administration believe it has run out of room to manoeuvre, with Sunday [12 July] set as a hard deadline for a deal to be agreed with all 28 EU leaders meeting at a summit to either agree or deal or setting in motion a Greek exit.
The European Central Bank has refused to extend emergency liquidity funding to Greek banks, which are said to have as little as EUR500m left in deposits. The banks have been closed for 11 days and ATM withdrawals have been limited to EUR60 a day.
The hope from Tsipras and his allies is that the extended bailout will give them time to rebuild the Greek economy and get it growing after half a decade of recession.
Markets rallied on Friday morning at news that a deal appeared closer, with Eurozone leaders apparently ready to negotiate an agreement based on Tsipras' proposal.
Picture courtesy of Fraktion DIE LINKE. im Bundestag