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Greek economy surprises as vote looms

Thursday, August 13, 2015 - 01:41

A new bailout deal is expected to be passed by the Greek parliament in a vote on Thursday night, with opposition parties promising support. But as Ivor Bennett reports, doubts are being raised over Syriza government's future, and the deal it has agreed to.

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Of the hurdles that remain, this surely is the biggest? The Greek parliament, and a brewing rebellion. The new 85 billion euro bailout deal has to be agreed by lawmakers here AND by euro zone finance ministers meeting on Friday. Greece's finance minister Euclid Tsakalotos knows the stakes are high. (SOUNDBITE) (Greek) GREEK FINANCE MINISTER, EUCLID TSAKALOTOS, SAYING: "If tomorrow there is no agreement at the Eurogroup about the agreement that we discussed with the institutions, then Finland will not vote and we will be forced to accept a bridge loan. Whoever wants to risk this is welcome to vote against our request for an emergency plenary session." Opposition support should be enough to pass the deal. but a Syriza rebellion could yet have consequences. Constitutional expert Nikos Skoutaris is predicting a snap election that could be as soon as September. (SOUNDBITE) (English) CONSTITUTIONAL EXPERT AND EU LAW LECTURER, DR. NIKOS SKOUTARIS, SAYING: "It's a vicious circle, elections will be a problem in the implementation of the reforms, but without elections, without a strong government, reforms cannot pass." Though the headlines aren't favourable - this one suggests the Prime Minister is having a nervous breakdown - the government's hand just got stronger. Shock data shows the Greek economy actually grew in the second quarter by 0.8 percent. While most predicted it'd shrink by that amount at least. It may still yet of course, says JP Morgan's David Stubbs, when the bailout conditions kick in. SOUNDBITE (English) DAVID STUBBS, GLOBAL MARKET STRATEGIST, JP MORGAN ASSET MANAGEMENT, SAYING: "An overly aggressive fiscal consolidation plan is counterproductive. The economy needs some space and some demand to be injected rather than a more contractory policy." The government says it has little choice but to accept it. Its next multi-billion debt repayment is due in just one week.

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Greek economy surprises as vote looms

Thursday, August 13, 2015 - 01:41