Greece debt crisis: PM Alexis Tsipras steers bailout reforms through parliament after night of unrest, but now faces revolt within own party

The vote to accept Eurozone-dictated reforms was passed overwhelmingly in parliament, but 40 Syriza MPs voted against the bill

Prime Minister, Alexis Tsipras, delivers a speech during the meeting in the Greek parliament
Prime Minister, Alexis Tsipras, delivers a speech during the meeting in the Greek parliament

Greece was last night bracing itself for serious civil unrest as MPs passed a bill to implement major economic reforms demanded by creditors in return for a bailout.

The International Monetary Fund’s shock admission that Greece could not hope to repay its debts fuelled public anger, and earlier in the day strikes and protests closed metro stations and brought city centre traffic to a standstill.

But as MPs prepared to vote, anarchist protesters outside the parliament building hurled rocks and petrol bombs at riot police who responded with teargas.

The sense of crisis had been heightened by Prime Minister Alexis Tsipras claiming the bailout he negotiated on Greece’s behalf was a deal he did “not believe in”.

Riot police run as they disperse protesters during clashes in Athens on July 15 (Reuters)

Once news emerged around 2am local time that Mr Tsipras had succeeded in gaining parliamentary approval for austerity measures he’d condemned only weeks earlier, following a debate, tensions rose again among the thousands outside in Syntagma Square.

An overwhelming majority in the Greek parliament passed the bill, which amounts to a parliamentary agreement to capitulate to Eurozone leaders' demands.

As has been common in this crisis, the deadline for the vote overran - it was planned to occur at midnight, but took place two hours later than that as a string of MPs, including Mr Tsipras, took to the podium to give their opinions on the situation.

Amongst the reforms that have now been agreed to are a privatisation of Greece's national electricity network, cuts to the generous pension system, and a major overhaul of the tax system, which is aimed at collecting more tax money from citizens.

Greek Prime Minister Alexis Tsipras leaves his office at the Maximos Mansion in Athens on Wednesday

Saying 'Yes' to the deal was essential for Greece, as they are the conditions of their new bailout, which will keep Greece functioning economically after the crisis of the last few months. Declining this offer would almost certainly lead to economic collapse and Greece being forced out of the euro.

However, the conditions of the bailout are similar to the kind of austerity measures that Greeks rejected in the referendum on 5 July.

Greek Finance Minister Euclid Tsakalotos leaves following a parliamentary session in Athens on July 16 (Reuters)

In some senses it is a victory for Tsipras, as it ensures that his country will get the bailout it needs to save it from collapse - but in others, it is a major loss.

40 Syriza MPs voted against the bill, a major rebellion that some said would 'split the party in two'. The days since the Eurozone deal have seen the resignation of a number of senior party figures, including the deputy finance minister Nadia Valavani.

The Eurogroup will meet on Thursday to review whether the parliamentary approval of the bailout is sufficient to merit the payment of a €12bn loan to keep Greek banks afloat.

Hard-line MPs in Mr Tsipra’s Syriza party were aiming to mount a rebellion large enough to force the Prime Minister from power. “If I don’t have your support [in tonight’s vote] it will be hard for me to remain as PM,” Mr Tsipras was reported to have told fellow MPs.

Anti-austerity protesters clash with riot police during a rally in Athens

But as predicted his coalition government was able to rely on the support of mainstream parties to get the raft of tax hikes, labour reforms and privatisation measures through parliament before the midnight deadline as its creditors required.

Ahead of the vote, political writer Christos Michaelides, predicted that Mr Tsipras would win and greatly strengthen his hand in Europe. “A ‘yes’ vote will pass the ball back to Brussels. If they back Tsipras no one in Brussels will be able to say that Tsipras can’t be trusted,” he said.

But Mr Tsipras’s domestic perils were underlined when Valavani quit her post because she could not support the bailout deal.

Another prominent left-winger, former Finance Minister Yanis Varoufakis, was reportedly booed by some colleagues when he appeared in parliament. Sources told The Independent that an earlier meeting of Syriza’s 200 central committee members was “split down the middle” on whether to back Mr Tsipras.

As thousands massed outside parliament, before the vote, riot police had prepared for attacks by extremists and anarchist groups.

Police were also guarding the Syriza party headquarters a mile away in Athens. The building was occupied by protesters in March.

Mr Michaelides said the “silent majority” of Greeks, not represented in Parliament Square, were resigned to more austerity.

“Ironically, many of these are the people who are not Tsipras supporters, but who see that failure to support the deal would lead to something worse,” he said.

Riot police detain an anti-austerity protester in Athens on Wednesday night

However, outside parliament, teacher Nikos Kourakis, 46, said he opposed all the reforms. “Why should the shops open on Sundays? Who will go to them apart from tourists? If this deal goes through there will be trouble on the streets – violence maybe, though not by us.”

Civil servant Ireni, who would not give her second name, said: “We’re striking and protesting for better conditions and for our children.”

But some people not protesting were more pragmatic. Dimitris Angelopoulos, 28, working in a nearby kiosk, said: “I think it’s good that the shops will open more, though more tax is not good.”

Economist George Tsarouchas of the Athens University of Economics and Business, hailed the labour market reforms but attacked the new austerity measures.

“Without the reforms we cannot attract the new investment we need,” he said.

“The government needs to totally restructure the public sector, otherwise there’s no way out of this mess.

Civil servants protest during a 24 hour nationwide strike in Athens on Wednesday (EPA)

“But there is a real need for debt restructuring. Europe is not ready for that and that is a major problem. More austerity is a disaster.”

Ashoka Mody, the former assistant director of the IMF’s European Department, repeated the organisation’s call for debt relief or restructuring. “This is the Greek tragedy. Like this, no one is going to win,” he said.

Civil servants and transports workers were not the only ones striking. But industrial action by pharmacists – one of the closed castes that Mr Tsipras is under pressure to crack open – passed virtually unnoticed.

There was more sympathy for the striking doctors, whose salaries have collapsed. “They have every right to strike because their salaries have dwindled to humiliating levels,” said commentator Philip Chrysopoulos.

“Unions in Greece are very political,” said economics lecturer, Platon Tinios.

“We’re going to see a lot more strikes. But the thing is, they will be posturing. The economy is so dead already, I’m not sure that strikes will make that much difference.”

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