News Column

Greece Begins Budget Debate After Passing Austerity Bill

Nov. 8, 2012

Greek lawmakers on Thursday began debating next year's budget, hours after parliament passed a new round of austerity measures that are a precondition for the struggling country to receive its next round of international aid.

The 31.5-billion-euro (40-billion-dollar) installment hinges on the approval of the 2013 budget, which is scheduled for a vote on Sunday.

Simon O'Connor, the spokesman for EU Economy Commissioner Olli Rehn, said the vote was "crucial" in order for the Eurogroup panel of eurozone finance ministers, who meet in Brussels on Monday, to sign off on the bailout package.

Agreements are also needed on Greece's long-term debt sustainability and future financing needs for the aid tranche to be released, O'Connor said.

Additionally, Athens will need a positive report by the so-called troika of debt inspectors from the European Commission, the European Central Bank and International Monetary Fund (IMF) before loans are handed over.

Transport remained paralysed in Athens Thursday as the metro, suburban railway and taxis continued rolling 24-hour strikes, causing major traffic jams.

Meanwhile, the release of official unemployment figures from the state statistics agency ELSTAT showed a record high of 25.4 per cent for August, rising from 24.8 per cent in July and 18.4 per cent a year ago.

The worst affected was the 15-24 age group, with unemployment reaching 58 per cent, followed by the 35-44 age group at 41 per cent and the 25-34 age group with 32.9 per cent.

Greek lawmakers voted 153-128 for the package of spending cuts and tax increases, worth 13.5 billion euros. Lawmakers from only two of the three parties in the ruling coalition approved of the bill, with heavy dissent from within party ranks.

Seven lawmakers were expelled from the conservative New Democracy and socialist PASOK parties after failing to back the measures.

Parliament's approval of the bill nevertheless represents a major political victory for Greek Prime Minister Antonis Samaras. Without the next round of bailout cash, the country will run out of money by November 16, the government has said.

Many Greeks fear the bill will deliver a further blow to the country's fragile economy, which is about to enter a sixth year of recession.

The measures include additional pension and public-sector cuts and tax hikes, a two-year increase in the retirement age - to 67 - and legislation that will make it easier to sack civil servants.

The law gives the government the right to cut the minimum wage, reduces the redundancy notice period and limits compensation for workers with more than 16 years of service.

The measure also gives shop owners the right to ask employees to work more flexible hours, paving the way for Sunday openings.

Source: Copyright 2012 dpa Deutsche Presse-Agentur GmbH

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