Greek PM eyes recovery as lawmakers approve budget
“(Next year) will be a milestone in taking the country out of crisis, and this is the first budget of optimism, growth and recovery,” Tsipras told parliament.
The PM said he was confident that a crucial EU-IMF reforms audit could conclude despite certain “absurd” demands.
Tsipras predicted an agreement if all sides show political goodwill, and a return to debt markets early next year, but he refused to adopt labour market reforms “contrary to the European model”.
In the ongoing talks, the country’s international creditors — fellow EU states and the International Monetary Fund — have controversially called for legislation to make crippling strikes less likely while also making layoffs easy.
The new budget approved by 152 out of the 298 lawmakers present levies around one billion euros ($1.07 billion) in extra taxes on cars, fixed telephone service, pay television, fuel, tobacco, coffee, beer and other items.
Public spending on salaries and pensions will also be cut by 5.7 billion euros next year.
Tsipras needs to stay on good terms with EU-IMF creditors to conclude the reforms audit early next year.
Greece hopes that a deal will finally persuade the European Central Bank (ECB) to include Greek sovereign debt in its asset purchase programme, known as quantitative easing, or QE.
Without access to QE, the country will not be able to make a planned return to debt markets by early 2018, according to the Greek finance ministry.
– ‘Living nightmare’ –
The conservative New Democracy party, which has a double-digit lead in the polls, says Tsipras — who won two elections in 2015 on a promise to combat austerity — was in reality opposed to reforms.
“You’re the living nightmare of productive Greeks… the only thing you know is to levy taxes,” said New Democracy leader Kyriakos Mitsotakis.
“This budget is proof you have no plan to take the country out of the crisis,” he said, claiming that the leftist-led government had a track record of “torpedoing” privatisation projects and scaring away investors.
“The sooner you leave, the better for the country,” said Mitsotakis.
But Tsipras insisted he was not going anywhere.
“We have a four-year mandate that we will see through… to the final day,” the 42-year-old PM said.
Last week, eurozone lenders approved short-term relief measures to help Greece manage repayment on its huge public debt, which will reach 315 billion euros this year, according to the latest EU data.
But Germany, facing public bailout fatigue and federal elections next year, has led a hardline stance among eurozone lenders to force Greece to adopt austerity reforms well beyond the end of its present bailout in 2018.
Hardline EU states also want Greece to run a primary surplus, after debt servicing, of 3.5 percent of gross domestic product (GDP), beyond 2018.
Athens has flatly refused to consider further austerity measures beyond 2018.
– Surprise move –
Finance Minister Euclid Tsakalotos on Saturday said Greece counter-proposed a primary surplus of 2.5 percent, and a further 1.0 percent in tax breaks for small and medium businesses.
Tsakalotos on Saturday also praised Eurogroup chief Jeroen Dijsselbloem, a frequent critic of the Tsipras administration, as a man of principle.
“He may be harsh some times, but he keeps his word,” the minister told financial newspaper Agora.
Tsipras on Thursday made a surprise move, announcing a one-off payout to 1.6 million low-tier pensioners, and a sales tax break for islands sheltering thousands of migrants.
The European Commission said it was “not made aware of all the details of the announcement before they were made” and would need to study the 617-million-euro package “before commenting any further or acting further”.
Tsipras’ critics at home immediately denounced it as an electoral ploy, but the government insisted this was not the case.
“Europe owes a debt to (these islanders), the Greek state owes them its support,” Tsipras said in his announcement, with officials noting that the money would come out of 1.0 billion euros of tax surplus raised in 2016.
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