NEWS

Parliament passes tough budget

The country’s broad coalition government early on Wednesday approved a tough budget for 2012, foreseeing spending cuts and a tax crackdown aimed at raising the revenue to prop up the foundering economy.

The vote, which was conducted by roll call shortly after midnight on Tuesday, passed easily with all 258 ruling coalition deputies in the 300-seat Parliament voting in favor, 41 against and one lawmaker absent.

The government?s victory, though anticipated, was an important step toward sealing the country?s commitmnet to its foreign creditors ahead of crucial European Union summit on Thursday and Friday where the prospect of a tighter fiscal union is to be discussed.

Addressing Parliament before the vote, Prime Minister Lucas Papademos, conceded that the budget was ?difficult? but said it was crucial to ?restore our international credibility» and «lay the foundations for economic recovery.? ?History will not forgive us if we give up the fight for our future.”

He added that the implementation of the budget required ?not only the support of the coalition government but of society at large.?

Having secured 8 billion euros in rescue loans that Greece needs to stay afloat through December — following decisions by eurozone finance ministers and the International Monetary Fund over the past week ? the focus now shifts to clinching a new EU debt deal for Greece that was hammered out in Brussels in October.

That deal calls for an additional 130 billion euros in loans and a 50 percent write-down on the face value of Greek debt held by private banks. Inspectors from the EU and IMF are due in Athens next week to resume discussions about this deal.

Described by Finance Minister Evangelos Venizelos as ?a tool for exiting the crisis,? the budget for 2012 foresees some 5 billion euros in spending cuts and another 3.6 billion in tax collection. The chief aim is to report a primary budget surplus of 1.1 percent of gross domestic product next year.

Anticipating the EU summit, Venizelos told Parliament on Tuesday, ahead of the vote, that he was strongly opposed to a two-tier EU, noting that the division of the bloc into two parts would mean that the union «will have lost its perspective, its stability and will no longer be able to promise that which it has always promised, progress toward full European integration.”