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Greece approves 2012 budget amid austerity protests


Athens : The Greek parliament early Wednesday approved the country’s 2012 budget designed to tackle a severe debt crisis, amid fresh anti-austerity protests that briefly turned violent Tuesday.

With the support of the three parties backing the one-month-old interim government of Lucas Papademos, the budget, that includes further austerity measures, easily cleared the 300-member assembly in the roll-call vote, reported Xinhua.

With 299 lawmakers present, 258 voted in favour of the budget while 41 voted against.

However, the implementation of the policies outlined in the budget, according to local analysts, is expected to be a difficult task for the administration of the technocrat premier, given the negative climate within Greece and across the euro zone as the crisis adds pressure on neighbouring economies.

Despite Wednesday’s positive outcome, even parliamentarians who approved the budget expressed scepticism whether deficit cutting targets could be achieved.

Addressing the chamber shortly before the vote, Antonis Samaras, leader of the conservative New Democracy party that supports the government, forecast that recession would exceed 6 percent this year.

“The targets are bold, but feasible, if we will work in a spirit of cooperation,” said Papademos during his address, reiterating a pledge that the coalition government will pave the way to end the crisis, before leading Greece to early general elections in early 2012.

According to the draft budget, the Greek economy will shrink by 5.5 percent this year and the contraction will continue for a fifth consecutive year in 2012 with a rate of up to 2.8 percent.

The architects of the 2012 budget forecast that for first time in years Greece will achieve a primary surplus of 1.1 percent of GDP next year.

They also expect that Greek state deficit will be slashed from 9 percent this year against a revised initial goal of 8.5 percent for 2011, to 5.4 percent next year, as long as the Oct 26 euro zone summit deal for a second bailout loan package to Greece, that includes a 50 percent “haircut” on the Greek debt, will be implemented.