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Euro lenders to pass bailout judgment as Greece backs reforms

(Agencies) Updated: 2015-07-11 19:42

Euro lenders to pass bailout judgment as Greece backs reforms

Greek Prime Minister Alexis Tsipras reacts during a voting session at the Parliament in Athens, Greece, July 11, 2015.The Greek parliament voted overwhelmingly on Saturday in favour of authorizing the left-wing government of Tsipras to negotiate with international creditors on the basis of a reform programme unveiled this week. [Photo/Agencies]

BRUSSELS/ATHENS - Greek Prime Minister Alexis Tsipras won backing from lawmakers on Saturday for painful reforms but it remained unclear it would be enough to secure a bailout from German and other euro zone ministers meeting in Brussels.

In parliament overnight, Tsipras had to rely on opposition votes from the right after some of his leftist allies opposed spending cuts, tax rises and other measures he proposed in order to unlock 54 billion euros in three-year credit and save Greece from a bankruptcy that would force it out of the euro zone.

But Germany, the biggest creditor in two previous bailouts totalling 240 billion euros ($265 billion), is deeply sceptical after five months of abortive negotiations. Euro zone sources said it was far from certain that the 19-strong Eurogroup of finance ministers would agree to open negotiations at a crisis meeting scheduled to start at 3 p.m. (1300 GMT).

"The high figures for financing needs over the next three years may be too high and too sudden," one said. He added that EU and IMF experts estimated Greece's needs at 82 billion euros, factoring in cash to come from the IMF and other EU sources.

A spokesman for German Finance Minister Wolfgang Schaeuble declined comment on a newspaper report that he found Tsipras's proposals inadequate and would oppose further talks. He said the outcome of Saturday's talks remained "completely open".

Schaeuble, as well as French Finance Minister Michel Sapin, arrived more than two hours early, as did new Greek Finance Minister Euclid Tsakalotos. IMF head Christine Lagarde said on arrival: "I think we are here to make a lot more progress."

German Chancellor Angela Merkel has made clear she does not want to see a "Grexit" that could disrupt the ailing European economy and undermine a supposedly irreversible union. However, she faces stiff opposition among her own conservative allies.

A positive assessment of the Greek proposals delivered by the European Commission, European Central Bank and International Monetary Fund late on Friday, along with bullish comments from Athens' key euro zone ally France, had raised expectations that the Eurogroup would give a green light to new loan negotiations.

Euro zone leaders, including Merkel and French President Francois Hollande, are due to meet on Sunday, either to endorse the ministers' decision or, along with other EU leaders, to take steps to contain the fallout from a looming Greek bankruptcy.

Among the hawkish, small east European states whose voters are loath to pour more money into a country some believe the euro zone would be better off without, Lithuania's finance minister said the Eurogroup would judge Tsipras's credibility.

"We have to take the best decision for the euro zone," said Rimantas Sadzius. "We have to evaluate, how constructive and realistic it is ... We have no right to blindly borrow taxpayers' money - we have to be sure they will be paid back".

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