Greece debt crisis: Bailout talks given go-ahead

Greece and its creditors can formally start talks on the country’s third bailout after the necessary eurozone parliaments gave their backing.

The final approval came from the German parliament after an impassioned and at times ill-tempered debate.

A €7bn (£5bn) bridging loan has also been confirmed for Monday, when Greece has big debt repayments to make.

The head of the Eurogroup said there was now a chance to get the Greek economy back on track.

But Jeroen Dijsselbloem warned that the process would not be easy, saying he expected the negotiations to take four weeks.

Meanwhile, Greek Prime Minister Alexis Tsipras reshuffled his cabinet on Friday, a day after some members of his left-wing Syriza party rebelled during a vote on the bailout deal.

Energy minister Panagiotis Lafazanis, one of the hardline rebels, was among those replaced.

The German parliament voted in favour of starting the talks on Greece’s €86bn (£60bn) bailout, with 439 MPs in favour, 119 votes against and 40 abstentions.

Prior to the vote, Chancellor Angela Merkel warned of “predictable chaos” if the Bundestag did not back the plan.

Approval

The Greek parliament has already voted in favour of accepting the hard-hitting austerity measures required by the eurozone for a third bailout deal.

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Chancellor Merkel told MPs that the deal was hard for all sides, but said it was the “last” attempt to resolve the crisis

On Thursday, the European Central Bank (ECB) raised the level of emergency funding available. This has paved the way for Greek banks, which shut nearly three weeks ago, to reopen on Monday.

But credit controls limiting cash withdrawals to €60 a day will only be eased gradually, officials say.

The eurozone’s bailout fund, the ESM, announced it would formally open negotiations on a third bailout programme on Friday after both the Austrian and German parliaments voted in favour of negotiations.

They were the last of several eurozone states needing to give parliamentary approval for the bailout talks to get under way. France and Finland had already backed the negotiations.

Separately on Friday, the European Council approved the €7bn bridging loan for Greece from an EU-wide emergency fund. The loan was approved in principle by eurozone ministers on Thursday and now has the go-ahead from all non-euro states.

It means Greece will now be able to repay debts to two of its creditors, the ECB and International Monetary Fund (IMF), due on Monday.

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