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posted: 11/11/2012 4:10 PM

Greece to vote on 2013 budget

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  • A woman holds an IMF banner in front of the Parliament in Athens on Sunday. Hundreds of protesters were converging on the Greek capital's main square outside Parliament on Sunday evening, as lawmakers debated the 2013 budget.

      A woman holds an IMF banner in front of the Parliament in Athens on Sunday. Hundreds of protesters were converging on the Greek capital's main square outside Parliament on Sunday evening, as lawmakers debated the 2013 budget.
    ASSOCIATED PRESS

 
Associated Press

ATHENS, Greece -- About 15,000 protesters converged on the Greek capital's main square outside Parliament on Sunday, ahead of a vote by lawmakers on the 2013 budget which would once more cut pensions and salaries so Greece can qualify for its next vital batch of rescue loans.

With the coalition government still holding a comfortable majority in the 300-member Parliament, and all three coalition parties vowing to back the legislation, the bill is expected to pass. The vote comes four days after a separate bill of deep spending cuts and tax hikes for 2013-14 squeaked past with a narrow majority in the 300-member Parliament following deep disagreements among the coalition members.

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"Tonight we vote on the budget to eliminate our primary deficit, to start making our debt sustainable and to pave the way for viable development," Finance Minister Yannis Stournaras said. The primary budget deficit doesn't take into account interest payments on outstanding debt.

Approval of the austerity bill and the budget are key steps toward persuading Greece's international creditors -- the International Monetary Fund and the other European countries that use the euro -- to release the next (euro) 31.5 billion installment of its bailout loans. Without it, Prime Minister Antonis Samaras has said Greece will run out of euros on Friday, the day on which (euro) 5 billion worth of treasury bills mature and must be repaid.

"Without the help of the European Central Bank, the refunding of these treasury bills from the banking system will lead the private sector to complete suffocation," Stournaras said.

Disbursement of the next installment to Greece is essential "because the state's available funds are marginal, although better than expected because the 2012 budget is being executed better than expected," he said, adding that the funds are needed to pay salaries and pensions, as well as for the import of medicines, fuel and food.

But German Finance Minister Wolfgang Schaeuble, whose country is the largest single contributor to Greece's bailout, said in a German newspaper interview published Sunday that international creditors won't be rushed when it comes to approving the loan disbursement.

"We all ... want to help Greece, but we won't be put under pressure," Schaeuble told weekly newspaper Welt am Sonntag.

Schaeuble said the so-called troika of debt inspectors likely won't deliver their report on Greece's reform program by Monday, when the eurozone's finance ministers are to meet in Brussels. Once the report is submitted to the European Central Bank, European Union and International Monetary Fund, it will have to be studied carefully, he said.

He said Germany's parliament must have the chance to "check, discuss and decide" on the release of the funds.

Stournaras, however, stressed that with the budget approved, Greece would have fulfilled all its commitments.

With the 2013-14 austerity measures bill and the budget passed into law, "nobody can say any more that Greece must meet its obligations. We have met them and then some," he said.

In Athens, protesters waved banners with anti-austerity slogans such as "IMF get out" as they milled around Syntagma Square outside Parliament in a rally that ended peacefully after a few hours.

Alexis Tsipras, the head of the main opposition Radical Left Coalition party, or Syriza, insisted the new austerity cuts are unfair and would leave Greeks unable to buy essentials such as food, fuel and medicine this winter.

Greece is mired in a deep recession, with its economy contracting by nearly a quarter over the past four years, and unemployment spiraling to above 25 percent.

"This is why we say you are dangerous for this country," Tspiras said, addressing the government. "You are incapable of negotiating."

Tspiras promised to repeal the austerity laws and negotiate "on an equal footing" with the country's creditors if he were to come to power.

In an opinion poll published in the Sunday newspaper To Vima, 66 percent opposed the new austerity measures, but 52 percent said the government, which emerged from June elections, should be given more time to handle the economic crisis.

According to the poll, 86 percent of the respondents are facing financial difficulties.

The poll showed Syriza, which came second in June's elections, ahead of coalition leader center-right New Democracy by nearly 3 percentage points. The extreme right-wing nationalist Golden Dawn party continued its strong showing with more than one in 10 respondents preferring it.

The poll involved 1,017 respondents with a margin of error of 3.07 percent.

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