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With bill’s approval, Greece clears last batch of reforms needed to exit bailout

Greek lawmakers approved Thursday the last batch of economic reforms required by creditors, as the country approaches the end of its international bailout.

Lawmakers in the 300-member parliament voted 154-144 to approve the bill, with two deputies not present. The legislation includes a raft of reforms on issues, from pension cuts to health care and tax reforms. During the parliamentary debate ahead of the vote, around 3,000 demonstrators marched through central Athens in protest.

European Commission President Jean-Claude Juncker on April 26 urged eurozone countries to honour their promises to provide debt relief to Greece, whose economy is still struggling.

ANGELOS TZORTZINIS/Getty Images

The bill was the last step Greece’s government was required to make ahead of a meeting next week of finance ministers of the 19-nation eurozone, where Greece and its creditors are to reach a final deal on its bailout exit.

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Greece is to emerge from its third and final bailout on Aug. 20, after eight years of relying on emergency loans from international creditors.

In return for the funds it received, mostly from other eurozone countries but also from the International Monetary Fund, Greece had to make repeated rounds of deep spending cuts, structural reforms and privatizations through the years. Its economy has been under strict supervision, with creditors carrying out regular reviews.

“Today’s parliamentary session is of a historic nature. After eight years we are voting on the last measures of the last review,” Prime Minister Alexis Tsipras said in parliament. “We honoured our commitments, the credibility of the country has been restored.”

The repeated rounds of austerity measures have been met with frequent protests in Greece, whose economy has contracted by about a quarter since its financial crisis began in late 2009.

European Commission Vice-President Valdis Dombrovskis, who met with Tsipras in Athens Thursday, said creditors were working on reaching a final deal on the bailout exit at the finance minister’s meeting on June 21.

“Two months from now, Greece will complete its program,” Dombrovskis said. “It will be a delicate, yet perfectly doable exercise, provided that all parties show commitment and act responsibly.”

Later Thursday, Greece’s European creditors approved the release of a further 1 billion euros in bailout funds for the payment of arrears.

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Once the bailout is over, Greece will have to finance itself by borrowing on international bond markets. The country has long sought some relief on the rescue loans it has to repay to its creditors, which are mainly fellow eurozone states.

“There needs to be an agreement on the debt measures,” Dombrovskis said. “Upfront debt measures would be important for ensuring Greece’s gradual return to the markets.” He also stressed the country must “stay the course of reforms” to ensure economic growth.

The Greek government has committed to continuing reforms after the end of the bailout, but has resisted the idea preferred by some, including the country’s central bank, of taking a so-called precautionary credit line – a backup loan it could use as it eases back into international bond markets.

A credit line would likely involve further stringent government austerity measures and heavier international oversight, which would make it politically unpopular. Instead, the government has insisted on a “clean exit” from the bailout.

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