Tsipras Fights To Keep Greek Bailout Alive Amid Party Rebellion: Full Vote Preview

The Greek parliament will vote on a second batch of prior actions on Wednesday including EU rules on bank resolutions and civil justice reform amid protests from public sector union ADEDY which has pledged to "continue the battle so that the new barbaric bailout does not pass and is overturned," and so that Greece does fall under the "neocolonial control" of Brussels. 

Although there will be a third vote during the first week of August on pension reforms and taxes on farmers (these issues were removed from Wednesday’s bill with Brussels’ blessing), formal discussions around a third program for Greece will begin immediately if, as expected, lawmakers approve today’s bill. 

Although Alexis Tsipras will likely get the votes he needs, Wednesday’s proceedings will be watched closely for signs that Syriza has splintered further after the premier sacked dissenters in a cabinet “reshuffle” following last week’s vote in which 39 Syriza MPs refused to support the new bailout deal. That cut Tsipras support within the coalition government down to 123, meaning he is heavily dependent upon opposition support for the new program and as Reuters notes, there’s some speculation that if his support within the coalition drops below 120 votes, the PM would be forced to resign. Here’s more

Together with his coalition partners from the right-wing Independent Greeks, Tsipras has 162 seats in the 300-seat parliament. But last week's rebellion cut his support to just 123 votes and any further defections may be seen as undermining prospects for reform.

 

Some government officials have suggested that if support dropped below 120 MPs - the minimum required to win a confidence vote if parliament voted with the lowest allowable quorum of 240 lawmakers - Tsipras would have to resign.

And here’s more color from Bloomberg:

The Greek leader is fighting for political survival after abandoning his opposition to austerity earlier this month with his country on the brink of financial collapse. He’s trying to hold off elections long enough to steer the country through the bailout negotiations, Michaelides said.

 

The plenary debate began at about 9 a.m. in Athens with the vote in the Greek parliament scheduled for around midnight. The bill under consideration includes the transposition of the European Union’s Bank Recovery and Resolution Directive into national law, as well as an overhaul of Code of Civil Procedure.

 

"There is a risk of the number of rebels growing," said Michael Michaelides, a fixed-income strategist at Royal Bank of Scotland Group Plc in London. "It will be a question of whether Tsipras can maintain the party under control to prevent unwanted political developments."

Yes, "unwanted political developments," like a vote of confidence which would be the first step towards early elections.

Although it seems likely that Tsipras would win a confidence vote if it came to that, the fact that the PM is reliant on opposition support to secure the bailout suggests that the political situation is simply untenable going forward. Deutsche Bank has more on the "unprecedented political configuration."

The agreement has come at a significant political cost to the Greek Prime Minister. Only 122 out of 149 SYRIZA MPs voted in favour of the prior actions in last week's vote, with legislative approval heavily reliant on 106 affirmative votes from opposition MPs. Notable negative votes included former finance minister Varoufakis, speaker of the house Konstantopoulou and five government ministers. This prompted a small cabinet re-shuffle over the weekend to replace dissenting ministers. Developments ahead need to be analysed against four broader observations relating to Greek politics.

 

The PM can no longer rely on his own parliamentary group to pass legislation, but despite this the government has legally not lost its parliamentary majority. A government change (and potential early elections) can constitutionally only be precipitated by a formal vote of confidence, but this has not taken place and many dissenting SYRIZA MPs have stated that they still support the government.

 

The Prime Minister may no longer control the SYRIZA party either. This is a separate entity from the party's parliamentary group, governed by a 201- strong Central Committee that has the power to call a vote of no confidence on party leader Tsipras as well as deciding on parliamentary candidates during general elections. A letter signed by more than 50% of the party's central committee last week expressed opposition to the Euro leaders’ agreement. The Committee has yet to convene following last week's parliamentary vote, though it may do so in coming days. The party’s official reaction to the agreement will need to be closely watched.

Today's vote is thus a litmus test for Syriza. That is, the key issue is whether the party splinters further or if some of those who broke with Tsipras last week return to the fold on Wednesday.

If Tsipras' support within the party weakens further, it will have broader implications for how the political landscape will look once the bailout is official. The PM is expected to call a party meeting in September to discuss "the day after" (a reference to the fact that by then, Greece is expected to have formalized the third bailout). At that juncture, Syriza "will split in two groups, the followers of Tsipras and the leftist wing led by Lafazanis," one unnamed source told MNI on Tuesday.

"The Syriza party must ... accept the social concerns and the expectations of the thousands of people that support us," Tsipras said ahead of the vote.

When it comes to "accepting the social concerns" of the party's constituents, one good place to start might have been respecting the referendum "no" vote.

Alas, that ship has sailed.