Greek MPs to vote on austerity budget

Greek demonstrators in Athens protest new austerity measures imposed by the government and the IMF

Source: Press TV
http://www.presstv.ir/detail/156630.html


Greek MPs are set to wrap up days of debate over a budget containing over EUR 14 billion in savings under strict austerity policy after the country's bailout.

Prime Minister George Papandreou, whose Socialist government enjoys a six-seat parliamentary majority, is largely expected to win the vote scheduled for after midnight.

The 2011 budget envisages cuts in the country's mismanaged health sector and public companies, an increase in the lower sales tax rate from 11 to 13 percent, a crackdown against tax evasion, lower defense spending and a nominal pension freeze.

The proposed measures follow Greece's bailout by the European Union and the International Monetary Fund (IMF) after decades of extravagance, raising questions about a strategy that has led the country to a recession.

Numerous lay-offs, wage-cuts and a rise in prices due to tax hikes prompted the country's influential unions to respond with a wave of crippling strikes and massive street protests.

A 24-hour strike by angry workers in state-owned bus, trolley and metro companies on Wednesday brought public transport in the capital to a halt for the fourth time this month.

The leading public and private-sector unions also plan to stage a three-hour walkout and demonstrations in Athens later in the day.

The cost-cutting has been mandated by the EU and the IMF after they extended Greece a EUR 110-billion (USD 145-billion) loan in May when the country was on the verge of bankruptcy.

The money is released in installments pending Greece's progress in its reforms. Under the bailout deal, Greece has agreed to reduce its public deficit to 7.6 percent of Gross Domestic Product in 2011, before it could eventually reach the EU limit of 3 percent.

But further measures had to be adopted after Eurostat -- the EU statistics agency -- revised the 2009 public deficit upwards in November to 15.4 percent of GDP from the previous 13.6 percent.

This in effect outs the 2010 deficit at 9.4 percent of output compared with the 8.1 percent target.

Athens has also been forced to think of extra savings to beef up its finances to meet the 2011 target.