Merkel rallies German lawmakers to back Greece bailout plan

(BERLIN) - Chancellor Angela Merkel made an impassioned plea Friday to German lawmakers to back a new Greece bailout deal that conforms to EU rules and prevents "chaos" in the crisis-hit country.

Merkel, like Greece's hard-left Prime Minister Alexis Tsipras, faces rebels in her own party ranks, but was ultimately expected to win approval from the chamber where her "grand coalition" commands an overwhelming majority.

Addressing the Bundestag, she said a new 86 billion euro ($94 billion) rescue package on the table was the way forward and that "we would be grossly negligent, indeed acting irresponsibly if we did not at least try this path".

It was Merkel -- leader of the EU's biggest economy and effective bailout paymaster -- who spearheaded the marathon Brussels talks last weekend that brought Greece back from the brink of crashing out of the euro, at the price of accepting painful reforms.

The chancellor said there was "no doubt that the agreement of Monday morning was hard" but urged German lawmakers to back the deal, calling it "a last try".

She said if a compromise over Greece had not been reached, it would have meant "watching on as the country virtually bleeds out, people no longer getting their money, where chaos and violence could be the result".

Equally, "bending the rules until they're worthless" was not an option, she said, arguing that this "would mean the end of a community bound by legal rules, and we wouldn't agree to that".

That's why, she said, "we are making a last try in tough, tenacious discussions" to seal a third aid package, "despite all the setbacks of the past six months and despite all legitimate scepticism".

- 'Desperate pensioners' -

The vote comes a day after European Central Bank chief Mario Draghi boosted a vital cash lifeline to Greece's struggling banks that will allow them to open their doors for the first time in almost three weeks on Monday.

To prevent a catastrophic "Grexit", the Greek parliament early Thursday agreed to sweeping reforms on pensions, taxes and labour laws that were harsher than those citizens had rejected in a July 5 referendum.

The about-face sparked violent street protest and speculation of early elections. Finance Minister Euclid Tsakalotos said his vote consenting to the lenders' terms "will burden me my whole life."

Eurozone ministers rewarded Greece on Thursday by approving a vital seven-billion-euro bridging loan and backing resumed negotiations.

Merkel and her hardline Finance Minister Wolfgang Schaeuble have been harshly criticised for forcing more austerity on Greece, using the threat of a five-year euro "time-out" that had been floated by Schaeuble.

Merkel, often painted as a champion of austerity and accused of lacking empathy, Friday touched on the suffering of the Greek people, for which she blamed the Tsipras government.

"Imagine just for a moment what it would mean here in Germany if desperate pensioners had to queue up in front of shuttered banks to wait for their 120 euros a week," she said, speaking on her 61st birthday.

- 'True colours' -

If many commentators see Merkel as being too hard on Greece, dissenters at home complain she has been too soft, leaving German taxpayers to lend out billions they are unlikely to ever see again.

The mass-circulation Bild daily, which has long campaigned for a Grexit, on Friday published a list of "seven reasons" to vote 'No' and wrote that "today politicians must show their true colours."

Germany is one of several EU countries whose parliaments must sign off of any debt deal for Greece.

The German vote Friday is only about resuming official talks -- a final deal with Greece would also need the assembly's green light.

Up to 50 lawmakers from Merkel's conservative party have warned they will vote 'No' to granting her government a mandate to resume talks.

However, that still leaves a broad majority across major party lines in the 631-seat lower house who were expected to support the proposal, which aims to keep intact the 19-member currency union.

Schaeuble -- who says he personally thinks a Grexit would be best for the country -- nonetheless urged his party-members to vote 'Yes'.

"We will do everything in our power to make this last attempt a success," he said.

The vote comes a day after the ECB gave Greece badly needed breathing space by adding 900 million euros to a financial lifeline to cash-strapped banks, which have limited ATM withdrawals to 60 euros a day per person.

Draghi also sided with the IMF in saying Greece -- with debts worth 180 percent of GDP -- will need some kind of debt relief, something Germany opposes.

IMF chief Christine Lagarde on Friday reiterated the need to ease Greece's crushing debt burden, which at 320 billion euros is currently 180 percent of GDP. Asked whether the bailout plan could work without it, she said "the answer is fairly categoric: 'No.'"