Greek law­mak­ers ap­prove 2011 aus­ter­ity bud­get to help weak econ­omy

The Pak Banker - - International -

ATHENS: Greek law­mak­ers early Thurs­day ap­proved an aus­ter­ity bud­get, part of a tough eco­nomic over­haul im­posed af­ter the debt-hit coun­try's in­ter­na­tional bailout, as thou­sands of pro­test­ers marched in Athens.

Some 3,000 union­ists and Com­mu­nists staged sep­a­rate demon­stra­tions Wed­nes­day to re­ject the eco­nomic blue­print con­tain­ing over 14 bil­lion eu­ros in sav­ings for 2011 in a bid to re­store bal­ance to Greece's woe­ful pub­lic fi­nances. Af­ter five days of de­bates the bud­get was adopted by 156 votes to 142, with the rul­ing so­cial­ist Pasok in favour and the right­ist New Democ­racy, com­mu­nists, rad­i­cal left and ex­treme right vot­ing against.

The 2011 bud­get in­cludes cuts in the badly mis­man­aged Greek health sec­tor and sta­te­owned com­pa­nies, a two per­cent in­crease in the lower sales tax rate from 11 to 13 per­cent, a tax evasion crack­down, lower de­fence spend­ing and a pen­sions freeze.

Prime Min­is­ter Ge­orge Pa­pan­dreou told par­lia­ment he was "de­ter­mined" to make all the changes needed to pull the coun­try out of cri­sis, say­ing: "De­spite the dif­fi­cul­ties I am op­ti­mistic, Greece will not go bank­rupt." He added in a tele­vised speech: "With­out the aid of the Euro­pean mech­a­nism, the coun­try would have col­lapsed." Pa­pan­dreou ap­pealed to all the op­po­si­tion par­ties to "as­sume their re­spon­si­bil­i­ties" and con­trib­ute to ef­forts to save the econ­omy.

As the pro­test­ers marched on Wed­nes­day the streets of the cap­i­tal were al­ready clogged with traf­fic due to a pub­lic trans­port strike-the fourth this month-against wage cuts and parts of the city were over­flow­ing with rub­bish af­ter a san­i­ta­tion walk­out.

"The govern­ment is try­ing to pit so­cial groups against each other," se­nior bus union­ist Nikos Kouloum­bar­it­sis told Flash Ra­dio. "We have suf­fered five wage cuts since Jan­uary, no­body can con­sider liv­ing on a wage of 1,000 eu­ros (1,315 dol­lars)," he said. "We are not stop­ping our mo­bil­i­sa­tion." The min­i­mum wage in Greece is 740 eu­ros.

In­vestors also doubt that Greece can ful­fil its prom­ises, de­spite hav­ing slashed its pub­lic deficit by some six per­cent of out­put this year.

One of the ma­jor rat­ing agen­cies, Fitch, said on Tues­day it could down­grade its rat­ing on Greece af­ter a sim­i­lar warn­ing from an­other agency, Moody's, last week.

With thou­sands of jobs al­ready lost, wages cut and prices climb­ing from tax hikes, the coun­try's in­flu­en­tial unions have hit back with seven gen­eral strikes this year and waves of street protests. Fear­ful of fur­ther so­cial un­rest in the midst of the fes­tive sea­son, the govern­ment has opted to post­pone to early next year a con­tro­ver­sial re­form to lib­er­alise scores of reg­u­lated pro­fes­sions. -Afp

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