Greek Parliament approves budget for 2014

Source: Ekathimerini

The Greek Parliament early on Sunday voted a budget for 2014 into law with 153 MPs in the 300-seat House voting in favor despite reservations among many in the coalition to backing further austerity.

The budget was backed by all but one of the coalition’s 154 MPs — Aris Spiliotopoulos of conservative New Democracy was absent — with 142 MPs voting against the bill and one present.

Speaking before the vote, Prime Minister Antonis Samaras said that economic recovery was in sight, referring to a primary surplus predicted in the budget, and accused the leftist opposition SYRIZA of undermining the government’s efforts toward recovery. “For the first time after many years, we will not need to borrow for our needs,” Samaras said, adding that unemployment was set to drop from next year. The premier even quoted the late Nelson Mandela toward the end of his speech, declaring, “It always seems impossible until it’s done.”

Earlier leftist SYRIZA leader Alexis Tsipras said that approving the blueprint was the “road to the continuation of destruction for Greece” and said that it would not be revised by Greece’s troika of foreign lenders but by SYRIZA which would come to power and “get rid of the troika.” He said a writedown to Greece’s debt was the only solution.

In his speech Finance Minister Yannis Stournaras said SYRIZA’s alternative economic plan — which would involve the nationalization of Greek banks — was a “nightmare scenario.”

The budget, which foresees a 0.6 percent growth rate for next year and sets out 5.6 billion euros in spending cuts and projected tax revenue, received the backing of coalition MPs though many indicated, over several days of debate in Parliament, that they would not lend the same support to other reforms in the works, chiefly a controversial unified property tax which is to be submitted in Parliament on Tuesday.

However, the budget still lacks the approval of Greece’s troika of foreign creditors, the European Commission, European Central Bank and International Monetary Fund, who left Athens last month after failing to reach an agreement with government officials on reforms and on a fiscal gap for next year. EC spokesman Simon O’Connor said in a Twitter posting on Saturday night that “a full negotiating team” would return to Athens in January once the government has made further progress in implementing reforms. “Technical discussions” would continue next week,” he said.

Greece’s parliament has approved a tough budget for next year, including further spending cuts of €3.1 billion ($A4.71 billion), aimed at ending the country’s deep recession.

The coalition government, which enjoys a narrow majority in the 300-seat chamber, scraped through with 153 deputies backing the 2014 budget in a late evening vote.

The move came as Greece’s troika of international creditors – the European Union, the European Central Bank and the International Monetary Fund – announced they had delayed until January their next trip to Athens.

Senior auditors from the so-called creditor troika had been expected to return to Athens on Monday to resume an evaluation of pledged Greek reforms.

The EU-ECB-IMF decision means talks on unblocking €1 billion in bailout funds are postponed.

The budget approved by parliament foresees a return to growth for the embattled Greek economy.

But earlier on Saturday a spokesman for EU Economic Affairs Commissioner Olli Rehn said the international negotiating team would not return to Athens until next month “after the authorities have made further progress in implementation” of reforms demanded by Greece’s creditors.

An agreement with the troika is necessary to unblock the €1 billion instalment of financial aid pending since the summer.

Athens has been keen to wrap up the talks before it assumes the rotating EU presidency in January.

The creditors and Athens disagree on the level of a forecasted financing gap for 2014 and the measures that need to be taken to cover it.

Discussions are reportedly stumbling on the issue of a new property tax, debtor property auctions, layoffs in the state sector and the slow pace of privatisation.

The government is under pressure from the troika to loosen a moratorium on home foreclosures but such a measure is likely to be opposed by several ruling party MPs and could risk the cohesion of the conservative-socialist coalition.

Greek Prime Minister Antonis Samaras stressed in parliament that the country had “achieved a number of reforms which many had considered impossible”.

The changes made are “enormous,” he said, citing fresh competitiveness and a drastic reduction in the budget deficit.

Greece’s budget for 2014 has not yet been approved by the troika and could yet be amended in the coming months with new austerity measures that the Greek government has thus far rigorously opposed.

As it stands the budget foresees a 0.6 per cent growth in GDP for next year after six consecutive years of recession. A four per cent contraction is expected this year.

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