(VOVworld) – On Wednesday Greece’s parliament approved by a vote of 229 to 64 a bill on austerity measures requested by creditors in exchange for a new bailout package worth 86 billion euros. Meanwhile, the other Eurozone countries began begun considering the details of a third bailout package. Greece has temporarily postponed an exit from the Eurozone but will it really be able to rebound? Anh Huyen comments:

The bill was passed after a tense debate in parliament. The ruling Syriza party managed to get the bill passed thanks to support from pro-Europe opposition parties. However, 38 of its members, including key cabinet members, abstained or voted against the bill, revealing a rift in Syriza over austerity measures, which were rejected by Greek voters in a recent referendum. But at the moment the parliament has no viable alternative to the bailout agreement.

Obstacles to the bailout

Under an agreement reached with the Eurozone on July 13, the Greek parliament was supposed to adopt drastic legal changes affecting labor, salaries, and taxes in return for aid of 82-86 billion euros over the next 3 years. But this plan needs to be approved by the parliaments of 8 other Eurozone countries and this process is expected to take several months. Only the French parliament has endorsed the plan. Politicians in the other countries do not totally agree with the rescue of Greece.

And there are sharp differences among Greeks. There is a deep divide in the Greek parliament where many rejected the bailout, calling it the worst deal possible to prolong Greece’s status as a debtor nation. This signals a period of political instability in Greece. In addition to reform measures, Greece has been asked to seek ways to spur growth and this is a real challenge. Greek leaders are at an impasse in figuring a way out of Greece’s depression. Spending cuts will not stimulate the growth needed to reduce Greece’s increasing debt and could trigger a chain of adverse effects.

Only temporary measures

Although Greece has avoided a default in the last minute, that doesn’t mean a default will not occur. The biggest question is how long the bailout will delay Greece’s declaring bankruptcy? The first bailout in May, 2010, was intended to solve immediate difficulties. The second bailout in February, 2012, followed suit. Economists say a third bailout will hardly guarantee Greece’s ability to pay its debts but rather is another temporary measure to prevent Greece from sinking deeper into debt.

In an updated report on Greece’s situation released on July 14, the IMF predicted that Greece’s debt over the next 10 years will be a lot bigger than estimated. It predicted Greece’s public debt will equal 200% of national GDP in 2016, up 20% from the previous estimate, partly due to the economic recession. By 2022 Greece’s public debt is predicted to be 170% of GDP, not the 142% previously predicted, so Greece will need a lot more than 86 billion euros to sustain its economy.

Unpredictable future