Dec 07, 2015

    Greece passes 'tough' Budget, expects contraction next year


    GREEK lawmakers approved a "tough" 2016 Budget early yesterday, forecasting near-zero growth for this year and a small contraction next year for the debt-ridden country in its sixth year of austerity.

    The coalition government, which enjoys a narrow majority, managed to push the Budget through with 153 votes for and 145 against after a late-night session.

    The leftist government of Alexis Tsipras is trying to apply the terms of an unpopular third European Union economic bailout, enacted in July in return for safeguarding the country's place in the euro zone by restructuring its economy.

    "Nobody can cheer for this tough Budget," Greek Finance Minister Euclid Tsakalotos said late on Saturday during the tumultuous parliamentary discussion.

    Next year's Budget, the first by the leftist Syriza-led government, expects zero economic growth in 2015 - better than an October forecast of a 2.3 per cent contraction.

    For 2016, it projects a 0.7 per cent contraction, again better than the initial 1.3 per cent forecast in the draft Budget.

    "Behind the (Budget's) numbers anybody can see the agonising effort to support the working classes," Mr Tsipras said early yesterday, describing the Budget as "a difficult exercise".

    The Greek government has already seen its parliamentary majority dwindle from 155 to 153 seats in its effort to implement the tough measures imposed by its creditors.

    Measures facilitating foreclosures against people who cannot pay their mortgages led to the loss of support from two lawmakers who refused to back the bill.

    Plans to slash the minimum monthly pension have caused two general strikes in a month, a sign that Mr Tsipras faces a rough ride despite being re-elected in September on the bailout programme.

    After first storming to power at the beginning of this year promising to free Greece from the restrictions of bailout programmes, Mr Tsipras in July accepted a three-year, 86-billion-euro (S$131-billion) rescue deal with strict conditions to enact further cutbacks.