Germany, Greece reluctantly look to new talks

Doubts lingered about the viability of a new deal on Saturday, even after national parliaments across the eurozone voted to press on with the negotiations.

Greek Prime Minister Alexis Tsipras was forced to get rid of ministers who had rebelled over the austerity included in the conditions for bailout talks, with the new members of his cabinet to be sworn in on Saturday.

Most prominent among the reshuffle victims was Energy Minister Panagiotis Lafazanis, leader of the hardline element within Tspras's Syriza party.

The reshuffle saw nine changes overall, and also included the replacement of the junior ministers of finance and foreign affairs, who resigned over the bailout deal.

The terms of the agreement that the Greek parliament approved early Thursday included reforms on pensions, taxes, labor laws and state asset sales that were harsher than those Greeks had rejected in a July 5 referendum.

Tsipras has called the accord one he did "not believe in." However, he said that he had accepted it to avoid a potentially catastrophic default and exit from the euro area.

"I had specific choices before me: One was to accept a deal I disagree with on many points, another was a disorderly default," Tsipras told the Greek parliament.

A lifelong burden

Finance Minister Euclid Tsakalotos, who has said he will be burdened for life having voted for the accord, was equally despondent. "I don't know if we did the right thing. I do know we did something we felt we had no choice over," said Tsakalotos.

There was little enthusiasm in Berlin, where the German parliament voted in favor of going ahead with the rescue plan. Speaking to the Bundestag on Friday, Chancellor Angela Merkel urged legislators to support the 86-billion-euro ($94-billion) deal. However, her language was far from convincing.

"We would be grossly negligent, indeed acting irresponsibly, if we did not at least try this path," she said. The chancellor referred to "legitimate skepticism" and called it a "last try."

German Finance Minister Wolfgang Schäuble, who has said he would personally favor a Greek exit or even timeout from the euro, fell into line with his boss but did not sound optimistic. "It's a last attempt to fulfill this extraordinarily difficult task," said Schäuble.

Rebels in Merkel's ranks

After heated debate, the German Bundestag approved the move by 439 votes to 119, but almost a fifth of Merkel's conservatives voted "No" after the mass-circulation Bild daily, which has long advocated a Grexit, demanded that politicians "show their true colours."

Germany's vote in favor of progress with the plan means all eurozone members have now approved it.

Schäuble on Friday reiterated his opposition to debt relief for Greece - but this was something International Monetary Fund chief Christine Lagarde on Friday stressed would be necessary.

The IMF has already sent shock waves through the entire process, claiming the deal as it is sketched out is not workable

When asked whether the bailout plan could work without reducing the crushing debt burden of 320 billion euros, Lagarde said "the answer is fairly categoric: 'No.'"

rc/jlw (AFP, dpa)