Greece’s fragile government pushed a tough budget of spending cuts and tax increases for 2013 through Parliament early Monday, 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 in a 167-to-128 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 euro 9.4 billion, or $12 billion, in cuts to salaries, pensions and social benefits, raising the retirement age to 67 from 65 and higher taxes. Four lawmakers 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,” Samaras said, referring to the release of a rescue loan of euro 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 to Greece by postponing the release of financing, 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 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 euro 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 — the European Commission, the European Central Bank and the IMF — on the progress of changes Greece pledged to make in exchange for two bailouts worth euro 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.
Euro zone finance ministers are to discuss Greece’s debt problems at a meeting in Brussels on Monday but are not expected to sign off on the euro 31.5-billion aid package.
© 2012 The New York Times News Service