Greece passes 2012 austerity budget
7 Dec 2011
The Greek parliament has overwhelmingly approved next year’s austerity budget, extending the savage spending cuts that have already left people struggling as the country tries to slash its vast debts and tame a severe recession.
With three parties, including the majority socialists and their rival conservatives, participating in Greece’s new coalition government, the budget was passed with a 258-41 majority in the 300-seat parliament late on Tuesday night.
“This is a difficult budget … with ambitious targets,” Prime Minister Lucas Papademos told MPs just before the vote. “But we must achieve our targets and implement the measures that are foreseen.
“The financial crisis in our country is not a passing storm. Given the size of the problems, our national effort will not be completed in 2012. It will take many years, and will require the efforts and insistence of several governments.”
Greece’s acute debt woes have triggered a Europe-wide crisis and the country is surviving on international rescue loans, released on condition it implements deeply resented cuts. The crisis has even prompted talk of the country being forced out of the eurozone – or even the European Union – both of which Mr Papademos insisted were out of the question.
“Our position in Europe is not negotiable,” he said. “The Greek people will defend it by all means. But participation in the euro involves rules and obligations, which we must consistently meet … Greece belongs to Europe and Europe cannot be envisaged without Greece.”
The end of the budget debate coincided with the third anniversary of a fatal police shooting of a teenager in central Athens, and as MPs spoke clashes broke out in front of parliament between hundreds of anarchists and riot police during a commemorative march.
Masked youths hurled stones, bottles and firebombs at police, who responded with volleys of tear gas and stun grenades. Earlier in the day, violence also broke out on the fringes of a separate march by about 2,000 students outside parliament.
Speaking inside the building during the debate, conservative party leader Antonis Samaras said his objections to many of the austerity measures already passed remained, but that he was backing the budget as the priority now was to reduce the debt. He said: “We are voting today for the budget, firstly because we are giving immediate priority to ensuring the viability of Greek debt and to maintain the targets of fiscal adjustment.”
The 2012 budget foresees a fourth year of recession with the economy contracting by 2.8%, a target which finance minister Evangelos Venizelos said was “ambitious but achievable”. It also projects a primary surplus – a surplus excluding interest payments on debt – of 1.1% of gross domestic product.