Rush to get bailout deal to Parliament with eye on QE

After rallying his ministers, Prime Minister Alexis Tsipras must now get coalition MPs behind him for a new multi-bill of austerity measures that is set to go to Parliament this coming week.

Although some lawmakers have expressed reservations about the deal, which foresees further cuts to pensions and more tax increases, along with changes to the energy and labor markets, it is widely expected that Tsipras will get the support he needs to push the bill into law.

A raft of so-called countermeasures – social welfare interventions that will come into effect in 2019 if the government meets budget targets – will be voted on separately and is sure to get the support of coalition MPs. The government has also appealed to the main political opposition New Democracy to back the offsetting measures but ND has refused to oblige.

According to government sources, Tsipras is already looking beyond the vote, expected on May 15 or 16, and beyond a scheduled Eurogroup summit on May 22 where the agreement between Greece and its creditors is expected to be rubber-stumped.

Aides to the prime minister said he is considering a cabinet reshuffle to give his government a lift and inspire investors as talks on lightening Greece’s debt and the inclusion of Greek bonds in the European Central Bank’s quantitative easing program are next on the agenda.

It remains unclear whether Tsipras is considering a “cosmetic” shake-up or a radical overhaul, or whether key cabinet members such as Finance Minister Euclid Tsakalotos would keep their posts. But it appears that the government is keen to send out a message that it is turning a page following the completion of a tough bailout review that dragged on for months.

The procrastination of the review, and its contribution to a greater sense of uncertainty, is believed to have played a role in a decision by the European Commission to reconsider its predictions regarding Greece’s economy.

The Commission is planning to revise down its growth forecast for Greece this year to around 2 percent from a previous 2.7 percent, it emerged last week.

According to sources, although pleased with the fact that a deal was finally reached after so many delays, Greece’s creditors are frustrated about the lack of progress in key areas such as privatizations.