Monday, November 12, 2012

Greece Passes 2013 Austerity Budget

Wall Street Journal
November 11, 2012

Greece's Parliament on Sunday passed a 2013 austerity budget needed to unlock further funding for the cash-strapped country, though international creditors have indicated the disbursement may be still weeks away as they squabble over how to resolve the country's debt problems.

Euro-zone finance ministers will meet Monday in Brussels, where they had been expected to approve Greece's next aid payment of €31.5 billion ($40 billion), but no decision is now expected until they are assured the country's overhauls are back on track.

The budget, which passed by a 167-128 vote, with four abstentions, foresees Greece taking €9.4 billion of budget cuts next year, dealing a fresh blow to an economy seen contracting 4.5% next year, its sixth year of recession.

Before the vote, Prime Minister Antonis Samaras moved to allay fears the aid will be delayed. "Greece has done what it was supposed to do," he told Parliament. "Now is the time for the creditors to do what they are supposed to do. And they will."

The budget assumes Greece will be given an additional two years to meet deficit-reduction targets, until 2016, though this has yet to be approved by international creditors. Its foresees the overall budget deficit next year narrowing to 5.2% of gross domestic product, down from a targeted 6.6% in 2012.


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