Greece approves austerity budget
Greece's fragile government pushed a tough budget of spending cuts and tax increases for 2013 through parliament early today, moving a step closer to unlocking crucial rescue financing from the country's foreign creditors.
The vote occurred as about 20,000 demonstrators gathered outside parliament to protest austerity measures, the second such protest in a week.
The budget passed comfortably, 167 to 128, in a roll-call vote after three days of vehement debate. Most members of parliament from a three-party coalition voted for the budget, which calls for €9.4 billion in cuts to salaries, pensions and social benefits, raising the retirement age to 67 from 65 and higher taxes.
Four MPs voted "present," which amounts to a blank vote, and one was absent.
Addressing parliament before the vote, prime minister Antonis Samaras said the new cuts would be the last and appealed to Greece's lenders, the European Commission, European Central Bank and International Monetary Fund, to support the debt-ravaged country.
"Greece has done its part, now it's the turn of the lenders," Mr Samaras said, referring to the release of a rescue loan of €31.5 billion, without which default looms this month. He said the money would be given "in due time and in full."
Accusing Greece's creditors of reneging on their pledges by postponing the release of financing, Mr Samaras's main political rival, Alexis Tsipras of the left-wing party Syriza, called for the annulment of all austerity measures and the write-off of Greece's debt.
"This is the only alternative plan," said Mr Tsipras, whose party is leading in opinion polls, describing the new cuts as a "sacrifice" of the Greek people and the government as "dangerous, politically bankrupt and incapable of negotiating."
The budget vote was widely regarded as a test of confidence in Greece's shaky coalition after the vote last Wednesday on a €17 billion austerity and change package for the next four years. That measure narrowly passed parliament, 153 to 128, after several coalition members voted "no" or abstained, most in opposition to an overhaul of laws protecting workers in the private sector.
But the government faces several more hurdles. It is awaiting a report by the so-called troika of lenders on the progress of changes Greece pledged to make in exchange for two bailouts worth €240 billion.
Another obstacle is a dispute in the troika about how to secure the sustainability of Greece's huge debt burden, estimated at 175 per cent of gross domestic product this year and 189 per cent for 2013.