Greek MPs approve austerity-extending 2016 budget

Greek MPs approve austerity-extending 2016 budget

Athens, December 7, 2015/ Independent Balkan News Agency

By Zacharias Petrou

All 153 MPs of the Syriza – ANEL coalition government approved the 2016 budget submitted to parliament by Finance Minister Euclid Tsakalotos while 45 lawmakers opposed it and two were absent.

The Greek government now focuses on much tougher hurdles as a set of prior actions must be pushed through parliament next and an overhaul of the social security system will follow in the New Year.

The budget forecasts a contraction of 0.7 percent next year. It maintains a primary surplus target of 0.5 percent of GDP in 2016 and projected privatisation revenues of 1.9 billion euros.

Public debt is projected to reach 187.8 percent of GDP in 2016 from 180.2 percent this year.

Furthermore, the budget makes 5.7 billion euros in public spending cuts – including 1.8 billion euros from pensions and 500 million euros from defence – and implements tax increases of over 2 billion euros.

“The 2016 budget proves our will and ability to lead a great and difficult social effort amid extremely difficult and adverse conditions,” Prime Minister Alexis Tsipras stated. “We intensify our efforts, we correct our mistakes, we speed up the procedures and I hope that you will assist our efforts,” he added.

The Greek premier also defended the third bailout deal reached last summer. “The agreement has secured the partial restructuring of debt with a 1.3 pct interest rate and has covered our needs until 2019. Moreover, the average maturity of loans has increased to 33 years,” Tsipras stated adding that the discussion on the necessary debt reduction will start after the first evaluation.

Tsipras appeared optimistic Greece’s economic turnaround is on track. “This new perspective of debt sustainability, combined with the successful recapitalization of banks and the subsequent upgrades of the country by international agencies, will make the European Central Bank (ECB) open its quantitative easing program to Greece as of the next year, thus reducing the capital costs for Greek banks,” he stressed.

The budget was heavily criticized by Greece’s main opposition.

Interim New Democracy party leader Yannis Plakiotakis lashed out at the government and Prime Minister Alexis Tsipras accusing him of trying “to cheat the people and transfer the responsibility for the failure of his policy as he is faced with the consequences of the third memorandum he has signed.”

“The government’s attempt to ‘fiddle’ with the budget figures and fabricate false images is spectacular,” he underlined. He made special reference to the recapitalization of the Greek banks, saying that “it is a huge economic disaster.”

“The budget is based on tax increases rather than cuts in spending, undermining local production and destroying the chances of young people to find a job. The first Left-wing budget includes 3.2 billion euros worth of new taxes, it is socially unjust and does not help growth. In general it showcases SYRIZA’s political fraud,” he added.