With a national referendum, months of tense negotiations, billions in market losses and the careers of “rockstar” finance ministers behind us, not to mention a divided nation— the fate of a nation of 11 million people and its role in Europe’s common currency now comes down to two people: German Chancellor Angela Merkel and her finance minister Wolfgang Schaeuble.
With a reluctant approval of the Greek parliament in a debate that ended in the wee hours of the morning, Greek prime minister Alexis Tsipras caved in to international pressure and the realization that the forces that he was fighting— even with an entire nation’s backing— were just too big to fight.
The two German politicians— who are despised in Greece for their tough stance in negotiations, manage the biggest and most powerful economy in Europe. Germany has already given Greece the most loans of any European nation, totaling roughly 56 billion euros ($62 billion).
That works out to about 700 euros ($780) per German citizen.
Even with hesitation, it is believed Merkel is motivated to keep Greece in the eurozone because cutting it loose would cause a domino effect of potentially dangerous incidents, most importantly, the questioning of the viability of the common currency itself.
But Merkel is facing an uphill battle. The media has waged a harsh battle against Greece’s future prospects in the eurozone and many politicians, including from within her own party, openly oppose any further bailouts for Greece.
In the end, 251 members of the Greek parliament voted for the plan while the remainder of the 300-member body either abstained or voted against it. Seventeen lawmakers from Syriza did not support the plan including prominent party members.
Two openly opposed with a “no” vote, 8 voted “present”— including the fiery president of the Greek parliament and member of Syria’s hard left Zoi Konstantopoulou. Other dissenters included two ministers — Panagiotis Lafazanis who holds the energy portfolio and Dimitris Stratoulis who holds the social security portfolio. Seven were absent.
“I support the government but I don’t support an austerity program of neoliberal deregulation and privatizations which … would prolong the vicious circle of recession, poverty and misery,” Lafazanis said in a statement released to the press explaining his “radical and categorical” objection to the proposal.
All opposition parties except the Nazi-inspired Golden Dawn and the Communist Party voted in favor.
If the proposal is approved, Greece would get a three-year loan package worth nearly $60 billion (53.5 billion euros) as well as some form of debt relief. That is far more than the 7.2 billion euros left over from Greece’s previous bailout that had been at stake in the country’s five-month negotiations until last month.
Speaking earlier in the debate that began just before midnight Friday, Tsipras acknowledged the reforms his government has proposed were harsh and include measures far from his party’s election pledges, but insisted they were Greece’s best chance to emerge from its financial crisis.
Tsipras said his government had made mistakes during his six-month tenure but said he had negotiated as hard as he could.
In addition to the Germans— the proposal must win approval from European institutions and officials.
France’s president Francois Hollande welcomed the proposed policy overhauls which French officials helped draft. “The Greek program is serious, credible and shows a determination to remain in the eurozone. Nothing is done yet, everything can be done.”
Tsipras has lost a lot of political capital and bargaining power with his inexperience in politics and negotiating. European leaders were stunned when he abruptly walked away from the negotiating table and called a national referendum. And there is of course, the Varoufakis effect— the polemic ex-finance minister who alienated most Europeans with his style and professorial-like lecturing despised by technocrats.
A flurry of meetings will be taking place all weekend in Brussels and throughout Europe where leaders of nations will review the Greek proposal— now with the backing of the nation’s parliament— and decide whether or not Greece deserves a chance to remain in the common currency.
Eurozone finance ministers meet Saturday afternoon, followed by a summit of the 28-nation European Union set for Sunday.