Greece’s parliament has narrowly approved a 2016 budget that includes more spending cuts and tax rises.
The new measures are required to unlock further funds from a third bailout deal worth €86bn the country agreed with its international creditors in July.
The budget was approved by 153 to 145 votes following a heated debate, with the opposition contesting that it was “socially unfair”. The centre-right New Democracy party’s interim leader Yiannis Plakiotakis described the budget as “anti-growth”. “They are getting ready to turn the pensions into tips,” he was quoted as saying by German broadcaster DW.
Prime Minister Alexis Tsipras, whose coalition majority shrank last month after two lawmakers rebelled against austerity, described the budget’s passage as a “difficult exercise”. “Behind the numbers anybody can see the agonising effort to support the working classes,” he said, pointing out that spending on hospitals, social welfare and job creation was being modestly increased for the first time in five years.
The 2016 budget sets out €5.7bn in public spending cuts, with €1.8bn of that amount coming from pensions, and brings in some €2bn through tax hikes. It foresees Greece’s economy shrinking 0.7% in 2016. Public debt is expected to hit 188% of gross domestic product from 180% this year, while the unemployment rate is expected to remain steady at 25%.
Last month, Greek workers staged their first general strike since Tsipras’s far-left Syriza party came to power on an anti-austerity platform at the start of the year.
The prime minister called for snap elections in August after he faced down a revolt from his own party members, who saw the terms of the latest bailout deal as a betrayal of Syriza’s anti-austerity roots. He went on to win September’s general election, securing 35% of the vote.
Representatives from the European Union, the European Central Bank and the International Monetary Fund are due in Athens on 7 December to hold talks over implementing additional reforms to the country’s pension and tax systems.