Berlin clears extension as lenders ramp up pressure

There was strong backing in the German Parliament on Friday for the extension of Greece’s loan agreement but reports suggested that the country’s eurozone partners would continue to keep up strong pressure on Athens.

Finance Minister Wolfgang Schaeuble admitted during the debate that preceded the vote in Berlin’s Bundestag that it was “difficult” for him to ask MPs to vote for the extension. However, he added that it was in Europe’s interests for them to do so.

“We Germans should do everything to keep Europe together,” said the 72-year-old.

In the end 542 lawmakers voted “yes” to the extension, while 32 opposed it and 13 abstained. It was the biggest majority for a eurozone bailout since the crisis erupted in 2010 but 29 of the 32 “no” votes came from Chancellor Angela Merkel’s Christian Democrats (CDU) and their sister party, the Bavarian Christian Social Union (CSU), meaning there were also more conservative rebels than in any previous such vote.

At times, the criticism of the current Greek government was stinging. “Look at [Prime Minister Alexis] Tsipras, look at [Finance Minister Yanis] Varoufakis: Would you buy a used car from them?” said Klaus-Peter Willsch, a rebel from Merkel’s party.

The vote, however, was unaffected by Varoufakis’s comments in a TV interview describing the agreement for an extension as a “fig leaf” to get the country through the next few months and one based on vague terms because Greece’s eurozone partners felt this would make it easier to secure domestic approval.

“We’re proud of the degree of ambiguity – I’m using a term here, creative ambiguity,” Varoufakis told Antenna TV. “They asked for it. They’re saying, ‘For us to pass it in our parliaments, our institutions, it’s better to leave it vague.’”

However, it appears that Greece’s lenders do not have any intention of allowing this vagueness to prevent them demanding results from the Greek side. In fact, one eurozone official who spoke to Reuters said that the creditors would make the most of the fact that Greece is short of cash.

“The liquidity squeeze is being used to push the Greeks to very quickly start discussions on the review and finish that as soon as possible – not even waiting for the end of April,” he said. “Eventually they will have no other choice but to adopt the measures, and move quickly.”