Third Bailout Due Despite Skepticism in Greece, Europe

Finance ministers expect to finalize a €85 billion bailout after Greek lawmakers approve the plan.

German finance minister Wolfgang Schäuble takes part in a discussion at the Brookings Institution in Washington DC, April 16
German finance minister Wolfgang Schäuble takes part in a discussion at the Brookings Institution in Washington DC, April 16 (Steven Purcell)

European finance ministers were optimistic on Friday that a third bailout for Greece, worth €85 billion, could be finalized by the end of the day.

“I think that, at the end of this day, we will have a result,” Wolfgang Schäuble, the hawkish German finance minister, told reporters going into a eurozone meeting in Brussels.

His Finnish counterpart, Alexander Stubb, said he would be “very surprised” if there was no agreement tonight.

Both ministers took a hard line in negotiations with the Greeks for a third support package which is conditioned on liberal economic reforms and spending cuts that the far-left government in Athens previously opposed.

The Greek parliament approved the three-year plan in the early hours on Friday although 31 of Prime Minister Alexis Tsipras’ own Syriza delegates voted down the measures. Another eleven abstained. The bailout plan passed with support from the opposition

Syriza rebels are expected to split off at a party congress next month, likely triggering early elections. They blame Tsipras for capitulating to the demands of Greece’s creditors for comprehensive economic and judicial reforms despite winning January’s election on promises to cancel austerity and later getting 61 percent support in a referendum to reject the terms of the last bailout.

Other countries, especially in the north of the currency union, are skeptical that Tsipras will honor the conditions of the bailout when his more pro-European predecessors struggled to enact reforms in the last five years. In Germany, a fifth of Chancellor Angela Merkel’s conservative lawmakers voted against a third bailout. In Finland and the Netherlands, leaders had to break their election promises not to help the Greeks again.

Without a third aid package, Greece would have risked default and ejection from the eurozone.