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Greek parliament passes austerity budget

Approval of 2013 budget, which includes spending cuts, to lead to release of foreign aid needed to stave off insolvency.
Last Modified: 12 Nov 2012 04:46
Sunday's parliamentary vote came four days after a separate austerity package was narrowly adopted [AFP]

Greece's parliament has adopted a 2013 budget that includes salary and pension cuts which the government has pledged would guarantee the release of foreign aid needed to stave off insolvency.

According to an AFP news agency count, 167 of parliament's 300 members voted on Sunday in favour of the budget, paving the way for Greece's international creditors to unlock a 31.5bn euro ($40bn) tranche of bailout funds.

Without the money, Antonis Samaras, prime minister, has said Greece will run out of euros on Friday.

At the same time Samaras pledged that the spending cuts will be the last Greeks have to endure.

"The sacrifices (in the earlier bill and the budget) will be the last. Provided, of course, we implement all we have legislated," Samaras said. 

"Greece has done what it was asked to do and now is the time for the creditors to make good on their commitments,'' he stressed.

Finance Minister Yannis Stournaras stressed the urgency of passing the measure, with the treasury bills due on Friday.

"Without the help of the European Central Bank, the refunding of these treasury bills from the banking system will lead the private sector to complete suffocation,'' Stournaras said.

Earlier, thousands of protesters converged on Athens' main square outside parliament while the debate was under way.

The vote came four days after a separate bill of deep spending cuts and tax increases for 2013-14 squeaked past with a narrow majority in the 300-member Greek parliament following deep disagreements among the members of the three-party coalition government.

According to Al Jazeera's Barnaby Phillips, the new budget measure predicts that the Greek economy will shrink again next year, by over 4 per cent -- the sixth year in a row that the Greek economy would be shrinking.

"For many Greeks this feels more like a Great Depression, than yet another recession,” Phillips said. 

Precarious economy

Wolfgang Schaeuble, German finance minister, in a German newspaper interview published on Sunday that international creditors would not be rushed when it comes to approving the loan disbursement.

Germany is the largest single contributor to Greece's rescue.

"We all ... want to help Greece, but we won't be put under pressure,'' Schaeuble told weekly newspaper Welt am Sonntag.

Schaeuble said the so-called troika of debt inspectors are unlikely to deliver their report on Greece's reform programme by Monday.

Once the report is submitted to the European Central Bank, the EU and the IMF, it will have to be studied carefully, he said, adding that Germany's parliament should have the chance to "check, discuss and decide'' on the release of the funds.

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In an opinion poll published in the Sunday newspaper To Vima, 66 per cent of Greeks opposed the new austerity measures, but 52 per cent said the government, which emerged from June elections, should be given more time to handle the economic crisis.

According to the poll, 86 per cent of the respondents are facing financial difficulties after more than four years of recession, during which the economy has shrunk by a quarter and unemployment has soared to more than 25
per cent. 

During the last parliamentary vote on Wednesday for the austerity bill, tens of thousands of people marched through the streets until the demonstration degenerated into violence.

Hundreds of rioters threw rocks, chunks of marble and gasoline bombs at police, who responded with large amounts of tear gas and made the first use of water cannon in Athens in decades.

Alexis Tsipras, the head of the main opposition Radical Left Coalition party, or Syriza, insisted the new austerity cuts are unfair and would leave Greeks unable to buy essentials such as food, fuel and medicine this winter.

"This is why we say you are dangerous for this country,'' Tspiras said, addressing the government. "You are incapable of negotiating.''

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