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Greek Parliament Approves Third Bailout As Tsipras Support Tumbles, Snap Elections Imminent

Moments ago the Greek parliament, after a dramatic, most likely on purpose, overnight session - because when you are a puppet government of Belgium/Brussels you have to put in extra effort to prove you are "independent" - gave its approval for the third Greek bailout when Tsipras secured votes of more than 151 lawmakers in country’s 300-seat parliament. As on previous cases, the vote passed with substantial opposition support.

Earlier Tsipras urged lawmakers to approve an 85-billion-euro bailout agreement with creditors on Friday, calling it a "necessary choice" for the nation.  Addressing parliament before lawmakers vote on the deal, Tsipras said Finance Minister Euclid Tsakalotos faced a battle at a meeting of euro zone finance ministers later on Friday to avert the threat of a bridge loan - which he called a return to a "crisis without end" - being offered to Greece instead of bailout aid.

In terms of numbers, the rebel faction within Syriza is now up to 42, with 43 being seen as the threshold beyond which Tsipras has no choice but to call elections. In other words the Tsipras government now hangs in the fate of just one person.

Greek Parliament like Church. Extremely silent. They all fear support to gov't is dwindling. They all fear elections.

— Dim Rapidis (@rapidis)

According to other sources, Tsipras may no longer even have the required minimum support to pass a confidence vote, suggesting snap elections are imminent:

Skai TV puts gov't MPs who voted for 3rd bailout at 118. Below min of 120 needed to survive confidence vote & may lead to snap polls

— Nick Malkoutzis (@NickMalkoutzis)

As has been extensively covered before, the legislation spells out the economic overhaul measures govt committed to in exchange for as much as EU86b of loans. And as Kathimerini reported, the third wave of pain in Greece is about to be unleashed: "a barrage of new tax measures are contained in the new bill presented to Greece’s Parliament as a part of the country’s new memorandum. The bill concerns measures which are to be implemented immediately as well as those to be adopted by October 2015 and in the framework of the 2016 budget.

[T]he measures to be passed immediately include diesel fuel tax for farmers going from 66 euros per 1,000 liters to 200 euros/1,000 liters from October 1, 2015, and to 330 euros by October 1, 2016. Farmers’ income tax to be paid in advance will rise from 27.5 percent to 55 percent. Income tax for farmers is set to rise from 13 to 20 percent for 2016 and to 26 percent for 2017.

 

Freelancers will be subject to a gradual increase from 55 to 75 percent in advanced tax payments for income earned in 2015, increasing to 100 percent in 2016. The 2 percent tax break for single payments on income tax is also being abolished from January 1, 2015.

 

Private education, previously untaxed, will be taxed at 23 percent, including the tutoring schools (frontistiria) that most Greeks send their children to but excluding preschools. Reduced value-added tax rates for islands are to be abolished completely by the end of 2016, with enforcement staggered across three groups of islands from October 1, 2015 to January 1, 2017.

 

Interest on expired debts to the state that are payable in 100 installments is to rise from 3 percent to 5 percent on amounts over 5,000 euros. Amounts below 5,000 euros are not subject to interest provided they meet certain conditions.

And so on: once the shock and euphoria from the lingering capital controls passes, and once the Greeks realize that their plight was just dramatically worsened, new elections are assured, and another victory for an "anti-austerity" party is in the cards.

In the meantime, expect some more pre-scripted drama when the German parliament votes to also approve the third bailout as early as next Tuesday.

Finally, even after the German government passes the bailout, which it will, Greece may be without a government as early as next week:

Gov't sources tell

that after vote, Tsipras will conclude talks with lenders & then ask for confidence vote in Parliament

— Nick Malkoutzis (@NickMalkoutzis)