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Greece approves new batch of reforms for multi-billion dollar bailout

Greek lawmakers have overwhelmingly approved a new batch of reforms demanded by the country's international creditors in return for a third multi-billion euro bailout.

Greece seeking bailout package worth 85B euros

Greek prime minister Alexis Tsipras is facing a new test of his authority in parliament, where MPs were to vote on a second batch of reforms to help unlock a bailout for Greece's stricken economy. (Louisa Gouliamaki/AFP/Getty Images)

Greek lawmakers have overwhelmingly approved a new batch of reforms demanded by the country's international creditors in return for a third multi-billion euro bailout.

The vote followed a whirlwind debate into the early hours Thursday.

Prime Minister Alexis Tsipras once again suffered a revolt among his own radical left lawmakers, but had no trouble passing the draft legislation with the backing of pro-European opposition parties.

The reforms were the final prerequisite before Greece can start negotiations with creditors on a third bailout worth around 85 billion euros ($120 billion CDN).

Addressing parliament earlier, Tsipras said the reforms were a necessary price to pay to keep Greece alive after stormy talks with its creditors nearly collapsed earlier this month.

"There is no doubt that the process we are following today…is not a normal process," he told lawmakers. "But the essence is that…we were led to a tough compromise, on the basis of which we are summoned today to legislate under a state of emergency."

He also ruled out resigning.

"The presence of the left in this government isn't about the pursuit of office, it's a bastion from which to fight for our people's interests," he said. "And as far as I'm concerned, I won't abandon this bastion, at least of my own free will."

Tsipras said approval would give Greece breathing room to quash speculation that the country will be forced to abandon the euro, and help it regain market confidence and eventually tap bond markets again.

Demonstrations ahead of vote

Before the debate got underway, about 10,000 people demonstrated outside parliament, protesting the latest measures to overhaul Greece's judicial and banking sectors. Minor violence marred the end of the protest when a few teenagers threw petrol bombs at riot police, but no injuries or arrests were reported.

Negotiations with creditors are expected to start soon after the latest package of reforms is approved.

Protesters have been speaking out about the proposed austerity measures. (Aris Messinis/AFP/Getty Images)

The radical left-led government hopes the new bailout talks can conclude before Aug. 20, when Greece must repay a debt worth more than 3 billion euros to the European Central Bank.

On Wednesday, the ECB provided a new vital cash injection to Greece's battered banks. A European banking official told The Associated Press the ECB decided to increase emergency liquidity to Greek banks by 900 million euros  — the second such cash injection in just under a week.

Fearing a run by depositors flocking to take their savings out of Greek banks, the government imposed capital controls more than three weeks ago, restricting daily withdrawals to 60 euros per account holder. Extra ECB liquidity means that Greek banks will still be able to hand out cash.

Greece has relied on bailout loans totaling 240 billion euros since 2010 after it was locked out of international money markets. It nearly crashed out of the eurozone this month, after relations between Athens and its creditors hit rock-bottom, and was only saved by a last-minute U-turn from Tsipras.

Syriza dissent

Many in Tsipras' Syriza party, including former finance minister Yanis Varoufakis, voted against last week's austerity measures, which included a big hike to sales taxes that took effect on Monday. If more than a handful of others join the dissent in Thursday's vote, then Tsipras' government could be in trouble.

Although he would still retain a nominal parliamentary majority — as he has shown no inclination to expel rebels — Tsipras would be politically hamstrung, depending on the support of opposition parties to pass any new reforms.

At least five Syriza lawmakers said Wednesday they would vote against the draft law — including the firebrand parliament speaker, Zoe Konstantopoulou. In a letter to Greece's president and Tsipras, Konstantopoulou asserted the measures were a "violent attack on democracy," arguing that lawmakers had been given very little time to study the voluminous bill.

Tsipras has accused party critics of acting irresponsibly.

"I've seen a lot of reactions and heroic statements, but so far I haven't heard any alternative proposal," Tsipras told party lawmakers on Tuesday, according to a senior government official. The official asked not to be named, citing the sensitivity of the parliamentary vote.

The reforms are aimed at reducing the country's court backlog and speeding up revenue-related cases. Greek lawyers' associations oppose them, arguing that they will have the opposite effect.

Justice Minister Nikos Paraskevopoulos conceded that the government would have preferred changes, but added that Greece is "in a state of emergency" and the alternative to accepting the proposed reforms would be the country's forced exit from the eurozone.

"Out of two problems, I chose the milder one," he said.

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