Greece to receive first bailout cash after German MPs and ESM approve deal - live
- The result: 454 in favour, 113 against,18 abstentions
- Angela Merkel contains rebellion, as 66 CDU/CSU oppose or abstain
- Schiuble: 'no guarantees bailout will work, but irresponsible not to try'
- Dutch parliament supports Greek deal
- Tsipras asks European Parliament to help with bailout reviews
- Questions over Greek airports privatisation deal
- Delay for Chinese yuan joining IMF currency basket
7.10pm BST
Today's agreement will unlock the first a13bn of bailout cash for Greece, a day before it is due to make a a3.2bn payment to repay a loan to the European Central Bank.
Here's the Reuters take:
According to a statement released by ESM, the board of governors approved a proposal for a Financial Assistance Facility Agreement (FFA) with Greece, under which the ESM will provide up to a86bn in financial assistance to Greece over a period of three years.
The board also adopted a Memorandum of Understanding (MoU) with Greece, specifying the policy measures that the Greekgovernment has agreed to undertake in order to tackle the main challenges facing its economy, the statement said.
7.10pm BST
#ESM publishes Factsheet with key information on Greece ESM/#EFSF programmes http://t.co/6JR6Z1m4eC pic.twitter.com/aq556vuiwX
7.01pm BST
#ESM Managing Director Klaus #Regling signs the ESM Financial Assistance Facility Agreement for #Greece pic.twitter.com/4IU7oIKuyf
7.00pm BST
So, after a teleconference call the European Stability Mechanism's board of governors - who are the eurozone's finance ministers - have agreed the programme for the a86bn bailout package.
Eurogroup president Jeroen Dijsselbloem said:
Today the countries in the eurozone have mandated the ESM to make to a maximum of a86bn available to finance Greece.
The programme for the coming three years goes with strrict conditions.. aiming at setting right public finances and administration and dealing with the economy and problems in the financial sector.
But the decisions taken in the last couple of weeks and especially today are a big step in that direction.
6.36pm BST
So Greece will get its money, as confirmed by European Commission vice president Valdis Dombrovskis:
Stability support for #Greece approved by azone. Just signed new #MoU on behalf of @EU_Commission and @JunckerEU pic.twitter.com/6a2b0ytng5
Greek authorities have an opportunity to restore financial stability. Implementation of the reforms is what will count at the end #Greece
6.34pm BST
Martin Selmayr, European Commssion chief of staff, says:
It's done, after hard work. New stability support4Greece agreed by whole aarea. Solidarity4reforms. Now 2bsigned by COM VP @VDombrovskis.
6.06pm BST
The request by Greek prime minister Alexis Tsipras for the European Parliament to become involved in the bailout review will be considered at the next conference of presidents, said the EP's Martin Schulz:
This morning I spoke with PM Tsipras. I confirm he wrote to me asking EP involvement in review process of implementation of loan agreement
This request will be discussed at the next Conference of Presidents of the European Parliament @tsipras_eu @PrimeministerGR #Greece
5.39pm BST
China will have to wait a little longer before fulfilling its hope of joining the International Monetary Fund's benchmark currency basket.
The fund said in a statement it was extending the current basket by nine months from the end of December to September 2016. It is set to decide in November whether China's yuan can join the Special Drawing Rights basket. The IMF said:
The nine-month extension is intended to facilitate the continued smooth functioning of SDR-related operations and responds to feedback from SDR users on the desirability of avoiding changes in the basket at the end of the calendar year.
The extension would also allow users sufficient lead time to adjust in the event that a decision were to be taken to add a new currency to the SDR basket.
5.30pm BST
Here's Reuters on the Dutch vote:
The Dutch parliament on Wednesday voted down a motion calling on the government not to back a third bailout package for Greece, effectively endorsing the rescue of the debt-ridden fellow euro zone country.
The motion was rejected by a margin of 81-52 in the 150-member parliament. One member of Prime Minister Mark Rutte's own party broke away to oppose the bailout, which is unpopular with Rutte's conservative voter base.
5.12pm BST
The Dutch parliament has expressed support for the Greek bailout package, Reuters is reporting.
Majority in Dutch Parliament votes to support Greek bailout, rejects anti-Greek bailout motions: 52 for, 81 against (CDA motion)
5.02pm BST
The FTSE 100 is down around 9.8% since its recent peak of 7103 towards the end of April. So it is close to correction territory, defined as a 10% drop from recent highs.
4.57pm BST
A combination of concerns has sent investors scurrying for the exits once more. Fears about the outlook for the Chinese economy - despite a slight recovery in the country's stock market earlier - set the tone for the day and sent commodities - metals and oil - lower once more.
US inflation figures came in much as expected, and did nothing to suggest the Federal Reserve would shy away from raising interest rates in September, another negative factor for the equity markets. Minutes from the Fed are due later.
4.43pm BST
Back with the Dutch and the voting has begun:
Dutch Parliament now voting name by name on third Greek bailout pic.twitter.com/nmLHAnX21d
4.30pm BST
And here's the Alexis Tsipras letter to European Paliament president Martin Shulz:
Tsipras asks @MartinSchulz for active involvement of #EU Parl in the evaluation of #Greece's programme pic.twitter.com/jdosDhnoUR /ht @nasoskook
4.26pm BST
Greek prime minister Alexis Tsipras reportedly wants the European parliament to joint the creditors overseeing the evaluation of its bailout:
Greece's @tsipras_eu writes to @MartinSchulz seeking 'direct & full involvement' of Euro Parl in creditor reviews of bailout implementation.
Greek PM's office says @MartinSchulz responded positively to contents of @tsipras_eu letter & said other groups in Europ Parl have same view
4.12pm BST
But as our Europe editor Ian Traynor points out, the German vote was the key one, and that went in favour of the Greek bailout:
but bundestag could have stopped it. dutch vote makes no difference. just a talking shop https://t.co/jGsEWlXPTv
#Grice: #Merkel a fait adopter le 3e plan d'aide sans trop de difficulti(C)s au #Bundestrag Ni(C)erlandais Mark #Rutte est plus bousculi(C)
4.08pm BST
And we apparently have timings on the Dutch vote:
Dutch MPs to vote on 17:35 CET on motions related to the third Greek bailout package and govt coalition
3.52pm BST
Oil and markets are heading even lower after a surprise rise in US crude stocks last week, indicating once more lack of demand and oversupply.
According to the Energy Information Administration, crude stocks rose by 2.6m barrels compared with analysts' expectations of a drop of 777,000 barrels.
Oil prices dropped again after a surprise build of 2.6m barrels in US inventories when a decline was expected. It was the biggest build in four months and demonstrates the resilience of US oil output despite the falling price.
3.37pm BST
Here's Reuters' take on Jeroen Dijsselbloem's comments about Greek debt in the debate in the Dutch parliament on the bailout deal:
Eurogroup President Jeroen Dijsselbloem said on Wednesday he believes that eurozone countries and the International Monetary Fund will be able to come to an agreement on IMF participation in Greece's latest bailout package.
Dijsselbloem said that while European governments opposed any nominal writedown of Greek debt, and the IMF believed Greek debt was not sustainable as is, they will be able to find a compromise in the form of lower interest rates and longer repayment terms.
3.34pm BST
Meanwhile, after Fitch upgraded Greece's debt by one notch from CC to CCC, the agency has also lifted the ratings for two of the country's banks:
Fitch Ratings has upgraded the state-guaranteed long-term senior debt ratings of National Bank of Greece and Eurobank Ergasias to CCC from CC. At the same time, Fitch has affirmed Eurobank's state-guaranteed short-term senior debt rating at C.
3.30pm BST
Things now seem to be moving on in the Dutch parliament:
Wilders now reading out his proposed motions: On 3rd Greek bailout,on NL governing majority. Also praises EU referendum campaign geenpeil.nl
D66 leader Pechtold "congratulates Wilders with his 20th motion of confidence, a remarkable lustrum",submits motion to support Greek package
3.13pm BST
Dijsselbloem:We agreed w IMF that 15%/GDP debt service is sustainable. Difference is that IMF's worst scenario is more pessimistic than ours
Dijsselbloem: IMF respects that Euro states refuse nominal debt relief. I can't confirm that extending for 60 years has been demanded by IMF
3.07pm BST
Dijsselbloem: EZ and IMF can come to agreement on Greek debt relief, but Netherlands remains opposed to nominal debt haircut
3.04pm BST
And this will not be a comment welcomed by Germany:
Dijsselbloem: We had to accept that IMF couldn't take a decision before October, but I can't guarantee IMF - involvement
3.01pm BST
Jeroen Dijsselbloem has been speaking in the Dutch parliament. The finance minister and head of the Eurogroup is of course defending the bailout, but he admitted that the a86bn figure was "uncertain" and depended on the state of the Greek banks:
Dutch Finance Minister and Eurogroup chair Dijsselbloem now speaking: "Greek deal wasn't an easy trade-off, also not for the Dutch govt
Dijsselbloem: Some think conditions are too weak or too strong, not enough money, too much money to Greeks, some want #Grexit to destroy a
Dijsselbloem: current Greek govt has decided more measures already now than the previous Greek govt
Dijsselbloem: "Greece has seen decades of bad policies and 6 months of complete chaos"
Dijsselbloem: Can this programme work? Yes, look at Spain, Ireland, Portugal, and even Greece until January
Dijsselbloem: if #ESM gets the green light tonight, it will be able to lend to Greece for three years
Dijsselbloem on the figure of a86bn: this amount is uncertain. Much depends on the situation of Greek banks
Dijsselbloem on the figure of a86bn vs a92bn (which was cited in German media): a6bn is coming from privatisations
Dijsselbloem: IMF was involved in this programme, Lagarde was positive, but in Oct we'll discuss debt sustainability
Dijsselbloem: we agreed with IMF to look at debt service. On average until 2030 this is about 12% for Greece, so until 2030 it's sustainable
2.55pm BST
The US market has joined in the global sell-off, which is not really a surprise.
Ahead of the minutes of the last Federal Reserve meeting, investors continue to be unsettled by the outlook for China.
2.52pm BST
Back with the Dutch parliament:
The Dutch debate seems to have moved away from rights and wrongs of bailout and turned into a "Give Rutte a rollocking" session.
2.51pm BST
Time for an afternoon summary:
2.33pm BST
The Dutch prime minister Mark Rutte has defended his decision to break an election promise by backing another Greek bailout.
While running for election in 2012, Rutte said Greece should not get another cent. Last month, his government backed the latest bailout for Greece, which includes a a5bn contribution from the Netherlands.
The circumstances in 2012 were different. It is not always possible to keep a promise in politics. You have to take responsibility.
2.07pm BST
Greece has almost cleared the final hurdle to its a86bn bailout, but it isn't time to break out the ouzo yet.
Despite the approval of the German parliament, economics consultancy Capital Economics remains convinced Greece will be forced out of the eurozone in the next year.
Greece is still not out of the woods. Remember that it will have to pass regular reviews to be eligible for future aid payments. The requirement for it to run ever rising primary budget surpluses is based on forecasts for GDP to fall by a fairly modest 2.3% this year and then expand by 1.3% in 2016 - the latter assumption seems far too optimistic.
Admittedly, Greece's debt redemption schedule is considerably lighter over the coming months than it has been of late, so future delays to bailout payments might not be disastrous. But note that a successful first review is also required before the creditors will consider debt restructuring and probably also before the ECB will reinstate the waiver allowing Greeks banks to access cheap loans.
1.56pm BST
Here is the German chancellor Angela Merkel just ahead of this vote.
1.46pm BST
US inflation rose slightly in July as a result of marginal increases in the prices of gas (petrol) and food.
Here is a flavour of the wire report from Washington.
The Labor Department said on Wednesday its Consumer Price Index edged up 0.1% last month after advancing 0.3% in June, marking the sixth straight month of increases...
Signs of an ebb in the disinflationary trend, combined with a tightening labor market and strengthening housing sector could give the Federal Reserve confidence that inflation will eventually rise toward its 2 percent target.
1.38pm BST
The eurozone's current account surplus grew sharply in June, according to the latest official data from the European Central Bank.
1.20pm BST
Aside from the Greek debt saga, market watchers are also pretty excited about the release of the minutes of the US Federal Reserve's latest policy meeting, due later today.
Economists will be combing through the document for clues on when the Fed will raise interest rates, after nearly a decade of keeping them on hold.
There is the probability that the minutes are likely to be a little stale given recent events in China, and the volatility seen there, but nonetheless they should still give us an insight into the musings of those on the committee about the effects of overseas events might have on their deliberations.
Furthermore they should be instructive in the context of whether any other members are also leaning in the direction of Atlanta Fed President Dennis Lockhart when he stated earlier this month that the bar to not acting on rates was quite a high one.
For now he is one member leaning in that particular direction, but if others on the committee were to also lean that way we could get a sharp reaction.
1.02pm BST
12.58pm BST
The ink is hardly dry, but doubts are already emerging about a deal to sell management rights to run 14 Greek regional airports to German company Fraport.
According to Kathimerini, the consortium that won the 40-year concession for 14 Greek regional airports is asking for more guarantees and there are doubts whether the government will receive the a1.2 bn euros it was expecting from the project this year.
A decision published in the Government Gazette on Monday indicated that the current coalition is ready to move ahead with the deal, which was struck in 2014 but had been in doubt until recently, the paper writes.
...However, Kathimerini understands that the consortium is asking for more guarantees from the Greek government following the uncertainty of the last few months. The group is also facing greater financing costs due to the higher country risk associated with Greece.
This has raised doubts about whether Greece will able to reach its bailout target of receiving 1.2 billion euros from the agreement by the end of the year.
The Greek government's decision is not tantamount to the conclusion of a contract but rather offers a basis for the resumption of negotiations.
12.41pm BST
D66 leader Pechtold points out his opposition D66 party is needed to approve Greek bailout "as one dissident VVD-PvdA vote could torpedo it"
NF
12.41pm BST
Mark Harbers, finance spokesman of Rutte's liberals said all the crucial euro states now supported the bailout and there were no longer any international allies against the deal.
Wilders calls this a weak argument and quotes Gandi: "Only dead fish swim with the stream." He urges the liberals to use the country's veto even if it would be isolated.
12.35pm BST
More unhappiness in the Dutch parliament over the third Greek bailout:
Dutch Christian Union MP Arie Slob: "How is it possible that the same recipes which have failed twice is being tried once more?"
Dutch Christian Union MP Slob:"What has remained of the firm Dutch demand that IMF should be involved? Current package not supported by IMF"
12.29pm BST
Think tank Open Europe is following the Dutch debate:
Wilders: "Today we are here to prevent that Dutch PM Rutte indulges in his favorite hobby: sending money to Greece, this time a5bn"
Wilders: "We need this money to protect our borders, but no, Rutte prefers to give it to the Greeks"
Wilders: "We need this money to support health care and the elderly. This govt hates Dutch elderly."
Centre-left governing PvdA now speaking: "We think it's in the Dutch interest as a trading nation to keep peace and order on the Continent"
PvdA: Cyprus and Spain managed to escape the crisis. We believe that's also possible for Greece, but there are no easy solutions
PvdA MP Henk Nijboer: a default would have been disastrous for Greece. Important for Greece to take strucutral reforms
PvdA MP Nijboer: Greece was on the correct path before the elections, but the current Greek govt created a lot of damage
Pechtold: "Greece needs to stay in EU. Congrats to Dijsselbloem who had to deal w people like Tsipras and Varoufakis, who's in Paris Match"
Pechtold: "We need to have a more capable eurozone, to avoid being hostages of another Tsipras or another True Finn"
Pechtold: support for the third Greek bailout in the Dutch Parliament is weak. PM Rutte should discuss this
Pechtold: #Grexit would mean a Greek default, with as a result problems for Europe and our economy, so I'll support it
Pechtold: We risk bad conseq of a Greek default.Imagine what happens on the Greek island of Kos if border guards' pay would suddenly be cut
Chr.dem CDA leader Buma (opposition, anti-bailout):Other countries who did reforms (Ireland, Spain, Portugal) are now asked to pay the price
Chr.dem CDA leader Buma (opposition, anti-bailout): we have no trust in the Greek govt so we'll vote against
Chr.dem CDA leader Buma (opposition, anti-bailout): After Greece, France already stands ready to break the eurozone rules
Chr.dem CDA leader Buma (opposition, anti-bailout): We need to say "no" to Greece to give a signal and prevent that France exploits leeway
12.20pm BST
Meanwhile the debate in the Dutch parliament is well underway, with prime minister Mark Rutte facing a no-confidence motion from opposition rival Geert Wilders over an earlier pledge not to provide more emergency funding for Greece.
Rutte is expected to survive the motion, while a majority of parliament supports the Greek bailout.
12.13pm BST
Breaking news: 63 German conservatives voted against the Greek bailout deal and three abstained.
Last month 60 voted no and five abstained in a vote on starting the talks.
12.10pm BST
In light of the reforms that are being demanded by Greece, from cutting pensions and liberalising parts of the economy to privatisation of holiday islands and airports, Der Spiegel takes its magnifying glass to Germany's own economy, and asks, were Germany to face the humiliation of a Troika to oversee how it runs its economy - as Greece, Portugal and Ireland have had to - what might have to change?
11.52am BST
Reuters has a useful take on how the politics of the Greek bailout plays in the Netherlands.
Today's confidence vote is not only a test for prime minister Mark Rutte, but also for Jeroen Dijsselbloem, his coalition partner and the finance minister, who negotiated the deal.
The debate may also show whether opposition politicians other than Wilders will seek to bring down Rutte's Cabinet, which is facing a huge challenge in trying to draft a budget for 2016 by next month.
Dijsselbloem's Labour Party, the junior coalition partner, lost half its seats in the Senate in May after a disastrous performance in provincial elections. Rutte must now find support from at least two major opposition parties to achieve the majority in the Senate he needs to pass any legislation, including the budget.
11.48am BST
As far as I can tell, we are still waiting for a breakdown on how German MPs voted. But Kate Connolly reports from Berlin that the figure for absences has now been revised down to 46, compared to an initial forecast of 73.
11.39am BST
As the German Bundestag completes its voting, the debate in the Dutch Parliament is just heating up.
Geert Wilders, the far-right populist leader, who is one of the loudest opponents of the eurozone bailout, has compared Greece to a junkie.
11.28am BST
11.26am BST
It looks like many German MPs stayed away from the vote.
11.23am BST
The size of the rebellion was slightly smaller than last month, when 119 German lawmakers voted against opening negotiations with Greece on a third bailout.
But we are still waiting to hear how many of Angela Merkel's CDU/CSU MPs voted against her.
11.17am BST
Breaking: MPs have approved the Greek bailout package, but a large number of MPs have voted against.
A total of 454 voted in favour, 113 voted against and 18 abstained.
11.09am BST
As we wait for the result of the vote, Kate Connolly in Berlin explains the curious pro-Merkel, anti-bailout stance of the German rebels.
The dynamics of this debate are interesting, not least because Merkel's conservatives, normally such a unified bunch, are so divided on the issue of Greece. The junior coalition partner, the SPD, is currently very divided on many issues - not least on the question of who should be its leading candidate for the 2017 election - but remains unanimously in favour of supporting a third bailout.
So in effect the rebel conservatives can afford to rebel only thanks to the SPD and opposition Greens who are supporting Merkel.
11.03am BST
And voting is underway...
11.02am BST
Here are some scenes from the Bundestag, ahead of the vote.
10.46am BST
Social Democrat MP Johannes Kahrs is already talking about Greece's fourth bailout.
10.40am BST
Europe's man in charge of the euro has promised that eurozone taxpayers will be protected from losses on aid to Greek banks.
Valdis Dombrovskis, a European commission vice president, with responsibility for the euro, said new rules on bank bailouts meant ordinary depositors would not pay the price for losses arising from bailing out Greece's banks.
It is not taxpayers that will pay for banking sector problems, but it is shareholders and bondholders of the banks.
It's clear that the IMF has its own procedures and will come back to its own programme in the fall... we are working to full participation of the IMF.
10.15am BST
A mass rebellion among Angela Merkel's conservative MPs is looking increasingly unlikely. In the days leading up to the vote, political insiders suggested that up to 120 conservative MPs could vote against the government, compared to around 60 last time.
10.01am BST
MPs from Germany's radical left party Die Linke have been speaking out against the bailout deal.
Die Linke has been Syriza's closest ally in the German Bundestag, being the only party in Germany to welcome Greece's no vote in last month's referendum on the bailout.
9.51am BST
As forecast, eurozone finance ministers will be holding a conference call tonight to finalise the Greek bailout deal.
Eurozone finance ministers are the governors of the eurozone bailout fund, the European Stability Mechanism, which will be sending a cheque to Athens.
9.37am BST
The Guardian's Berlin correspondent Kate Connolly has been watching German finance minister Wolfgang Schiuble explain why he is supporting the Greek bailout deal.
As Schiuble made the case for the German government, Angela Merkel looked on.
"The decision for a further rescue package for Greece is no easy one, one has to be honest about that," he said, blaming the insufficient framework of the currency union. It was interesting to hear this coming from the finance minister who just a few weeks ago was campaigning for a temporary Grexit.
He said that Greece had been "on the right path" with a population willing to undergo reform, before the government of Tsipras took over and then the message was: "Greece can stay in the eurozone without reforming", and that was just not tenable, particularly within the currency union, he insisted.
9.29am BST
Will Alexis Tsipras call early elections in an attempt to see off opposition within his governing coalition to Greece's bailout deal?
Since it became clear that the Greek prime minister was relying on opposition parties to get Greece's latest bailout through Parliament, the consensus held that Tsipras would soon call early elections.
There are two views in order to have a strengthened government - elections either before or after the first bailout review. It is a decision the prime minister will make.
What is most important at this phase is that the government serve the interests of the Greek people and not those of the party...Tsipras is the prime minister of 11 million Greeks, not of 30,000 members of the Syriza party.
8.57am BST
Social Democrat MEP Thomas Oppermann has been addressing the Bundestag.
He is also a supporter of the bailout and as a junior member of Angela Merkel's coalition backs the government.
8.44am BST
Breaking away from the Bundestag to another Greece-Germany story. The Greek government has agreed to sell to a German company the rights to operate 14 regional airports.
The deal is the first in a wave of privatisations Athens had previously opposed, but agreed to, in order to qualify for bailout loans.
The decision, published in the government gazette on Monday night would hand over the airports including several on popular tourist island destinations to Fraport AG, which runs Frankfurt Airport, among others across the world.
The deal, worth a1.23bn euros (0.9bn/$1.37bn), is the first privatisation decision taken by the government of Alexis Tsipras, who was elected prime minister in January on promises to repeal the conditions of Greece's previous two bailouts.
8.33am BST
Schiuble has finished his opening statement.
8.29am BST
Schiuble is now saying that Germany needs a strong Europe and that requires trust and solidarity.
He reiterates his view that a haircut, a reduction in Greece's overall debt, is not possible under European law.
8.23am BST
Schiuble says there is a unanimous view among the eurogroup (eurozone finance ministers) that Greece has made a major shift.
He says there is no guarantee that the bailout will work, but that it would be irresponsible not to use the opportunity for a new start.
8.21am BST
Germany's finance minister Wolfgang Schiuble is introducing the vote on the bailout debate. He says is a good deal for Greece and Europe.
8.14am BST
The Bundestag debate is underway and is being live-streamed here.
8.09am BST
Greeks should grow their own tomatoes: that is the blunt message to Athens from one of the German MPs who plans to vote against the Greek bailout today.
German Christian Democrat MP Klaus-Peter Willsch has been a vocal opponent of eurozone bailouts since 2011. A slightly longer, more-nuanced summary of his argument is that Greece should leave the euro to boost domestic production.
We are not sure if we're voting for a deal involving the IMF or not... But not only that, we only received the documents about the vote last night as a 207-page PDF. Many will be reading it on their way back from holiday, but they'll hardly have time to check the details.
Then they can get back on their own feet, grow their own tomatoes and develop domestic produce at a much higher standard than if they were to continue importing tomatoes from Holland at huge cost to feed the tourists.
7.53am BST
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and the business world.
Greece is now tantalising close to the a86bn (60bn) bailout it desperately needs to stave off bankruptcy, with German MPs expected to approve the plan today.
The risks to the programme's success remain high.
Continue reading...