Austria approves start of negotiations with Greece

Lawmakers in Austria gave their backing to the start of negotiations with Greece on a third bail-out package for Greece and ratification of a €7bn bridge loan for the government in Athens.

That followed the approval of the same proposals by parliaments in Finland, France and the Netherlands over the previous days.

The value of the three-year financial rescue programme had been estimated at up to €86bn, although in the days running up to the votes in the Eurozone’s capitals many economists had argued that greater debt relief was necessary for the Mediterranean nation.

“The Greek problem will come back without debt relief – and by that we mean at least a 30-year extension in maturities for Greek debt.

“The catalyst for a re-ignition of the Greek crisis could be either political (a government reshuffle, or new elections) or a further increase in debt/GDP due to low growth and higher taxes, in absence of substantial pro-growth measures,” RBS’s Alberto Gallo said in a research report e-mailed to clients.

The announcement of the decision in Vienna came ahead of a much anticipated vote in Berlin on the same proposals for Greece.