Greece’s prime minister was fighting to keep his government intact in the face of outrage over an austerity bill that parliament must pass Wednesday night if the country is to start negotiations on a new bailout and avoid financial collapse.
The raft of consumer tax increases and pension reforms will condemn Greeks to years of more economic hardship and has fueled anger among the governing left-wing Syriza party.
Civil servants protested with a 24-hour strike that disrupted public transport and shut down state-run services across the country. Demonstrations were due to be held outside Parliament.
The bill is expected to pass with votes in favour by pro-European opposition parties. But the vote will almost certainly see large numbers of Syriza lawmakers dissent and vote against the package.
Alternate Finance Minister Nadia Valavani resigned from her post, saying she could not vote in favour of the bill.
In a letter she sent to Prime Minister Alexis Tsipras on Monday and released by the finance ministry Wednesday, Valavani said she believed the tactics of the “dominant circles in Germany” was “the full humiliation of the government and the country.”
The Economy Ministry’s secretary general, Manos Manousakis, also resigned over the agreement.
A meeting between the parliament speaker and deputy speakers was being held Wednesday evening to decide on the exact timing of the parliamentary debate and vote. A similar vote last week was concluded after 3 a.m. after a debate that started at midnight.
Tsipras agreed to a deal after a marathon 17-hour eurozone summit Monday morning. It calls for Greece to pass new austerity measures his left-wing government had long battled against in return for the start of negotiations on a third bailout worth about 85 billion euros in loans over three years.
The government, a coalition between Syriza and the small right-wing Independent Greeks, holds 162 seats in Greece’s 300-member Parliament. More than 30 of Syriza’s own lawmakers have publicly voiced objections.
Tsipras has acknowledged the measures he agreed to go against his election pledges to repeal austerity, and described them in a Tuesday night television interview as “irrational.”
But he said he had no option if he was to prevent Greece’s financial collapse.
The International Monetary Fund, which was involved Greece’s previous two bailouts and will also play a role in the third, has long argued the country’s debt is too high and that any deal must include debt relief something the Greek side has also insisted on.
In a report released late Tuesday, the IMF said Greece’s debt was now “highly unsustainable” and would reach “close to 200 percent of GDP in the next two years.”
On Wednesday, the European Union’s executive Commission echoed that analysis, saying there are “serious concerns” about the sustainability of Greece’s debt due to a worsening in the economy.
Tsipras has faced strident dissent even from top ministers, with Energy Minister Panagiotis Lafazanis saying in a post on his ministry’s website that the deal the prime minister reached was “unacceptable” and calling on him to withdraw it.
The civil servants’ strike disrupted public services. Pharmacies joined in with their own 24-hour strike to object to the austerity deal which will allow some non-prescription drugs to be sold by supermarkets.
“These laws will pass through parliament today, because they can’t do otherwise,” said private sector employee Eleni Sari, 45, as she walked through central Athens.
“Naturally, the people are furious, and they have not allowed them any choice. Unfortunately, it’s not in our hands anymore. That is, it’s no longer in the people’s hands. By necessity ... they will pass them in parliament, and by necessity we will bear their burden.”
Greeks continued to struggle with limits on cash withdrawals and transfers outside of the country. Banks were shut down June 29 and the finance ministry said they would remain closed through Thursday.
With its banks dangerously low on liquidity and the state practically out of cash, Greece desperately needs funds. It faces a Monday deadline to repay 4.2 billion euros ($4.6 billion) to the European Central Bank, and is also in arrears on 2 billion euros to the IMF.
Negotiations on the new bailout will take an estimated four weeks, leaving European finance ministers scrambling to find ways to get Athens some money sooner.
The European Commission has proposed to give Greece 7 billion euros in loans from a special fund overseen by all 28 EU nations so it can meet its upcoming debts. The loan would be made pending the start of a full bailout program, but faces resistance from Britain, a non-euro member of the EU.
Germany argued one way for Greece to meet its financing obligations was for it to issue IOUs for domestic needs.
