Greek Parliament OKs new bailout proposal

ATHENS, Greece – Greek Prime Minister Alexis Tsipras on Friday persuaded his leftist colleagues and conservative opponents in Parliament to back his U-turn with European creditors and give his government the authority to negotiate a third bailout even though it would mean more painful cutbacks and higher taxes.

Lawmakers endorsed the proposal in a vote early today that followed an all-night debate on the plan for satisfying the demands of Greece’s European lenders.

Tsipras and his radical-left Syriza Party had backed down a day earlier from their steadfast rejection of the terms set by creditors for new loans to avert a banking collapse. The government also wants to open talks on another bailout so Athens can keep up with its massive debt servicing and repayment.

The plan Tsipras was selling – nearly identical to the one rejected by Greek voters in a referendum on Sunday – seeks about $60 billion over the next three years in exchange for spending cuts expected to generate $13 billion to keep the creditors at bay and the government solvent. Tsipras sought the endorsement of Parliament, but his seesawing has alienated many within the majority’s ranks.

The radically changed posture of the government raised prospects that Athens will be able to seal a deal that keeps Greece in the eurozone, which sent stock markets surging Friday.

Before the marathon parliamentary session, Tsipras met with the Syriza leadership to discuss the 13-page proposal delivered late Thursday to the International Monetary Fund, the European Central Bank and the European Commission.

Among the new plan’s concessions: an increase in the value-added tax from 13 percent to 23 percent; abolishment of special VAT discounts for the tourism-dependent islands in the Aegean Sea; a phased-in increase in the retirement age to 67; immediate incentives to discourage early retirement; a phase-out of preferential tax treatment for farmers; and an increase in the corporate tax rate from 26 percent to 28 percent.