Germany Approves Agreement for Greek Loan Extension

The German parliament approved Greece's financial assistance on Friday. (Photo: Peter Femto/flickr/cc)

Germany Approves Agreement for Greek Loan Extension

Parliament votes overwhelmingly to accept proposal put forth by Syriza-led government in Athens

Germany's parliament on Friday voted overwhelmingly to approve the terms of an agreement between Greece and the eurozone which will extend financial assistance to the Syriza-led government for four months as it embarks on a series of structural reforms designed to unhitch its economy from the destructive policies of austerity that have gripped the nation in recent years.

The deal, approved by the financial ministers of the Eurogroup on Monday, still needs to be ratified by other European Union members, but Germany's approval of the plan was seen as critical, as the country is one of the dominant economic powers in the EU. The vote passed 542-32 despite skepticism among some of the conservative members of parliament.

"We Germans should do everything to keep Europe together," said Finance Minister Wolfgang Schaeuble. "We're not talking about new billions for Greece... rather it's about providing or granting extra time to successfully end this program."

The vote was the biggest majority for a eurozone bailout since the financial crisis in Greece erupted five years ago.

According to Reuters:

Although the extension gives the Greeks a lifeline, they face an April deadline for convincing Germany and other euro zone partners that they are serious about their reform drive. If that fails, Athens would run out of cash, likely triggering an unprecedented exit from the single currency bloc.

The BBC adds:

German legislators felt they had no choice but to pass the vote, as a eurozone breakup could prove even more expensive than the bailouts and potentially undermine the credibility of the euro...

Even if the bailout extension goes through Greece still faces the formidable task of trying to service its debt obligations.

The Guardian continues to provide live updates and reactions to the loan extension agreement.

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