Greece yesterday geared up for a parliamentary vote on tough reforms demanded by eurozone creditors in exchange for a huge new bailout, just hours after a bombshell IMF report criticised the deal, reports AFP from Athens.
The outcome of the vote, expected to take place late Wednesday, was in doubt after the International Monetary Fund issued a stark warning that Greece's creditors will have to go "far beyond" existing estimates for debt relief to stabilise the country's finances.
The deal has split the ruling radical Syriza party as it includes changes to labour laws, pensions, VAT and other taxes that were rejected by voters in a July 5 referendum.
The hard-pressed government of Prime Minister Alexis Tsipras suffered its first resignations on Tuesday, with a junior finance minister and a senior economy ministry official walking out in protest.
"I'm not going to vote for this amendment and this means I cannot stay in the government," said junior finance minister Nadia Valavani. The parliament in Athens must approve the deal before the 18 other eurozone leaders start negotiations over what Greece is to get in return: a three-year bailout worth up to 86 billion euros ($95 billion), its third rescue programme in five years.
Under the plan, eurozone governments will contribute between 40 and 50 billion euros, the IMF will contribute another chunk and the rest will come from selling off state assets and from financial markets, a European official said.
Tsipras has admitted he "cannot say with certainty" that it will be enough to prevent a so-called "Grexit" until the final bailout agreement is signed.
An IMF official said the fund would only participate in a third bailout if EU creditors produce a clear plan. The current deal "is by no means a comprehensive, detailed agreement," the official said. Political analysts questioned why the strongly-worded report appeared not to have been taken into account in the agreement.