Millennium Post

Greece passes austerity budget, awaits debt inspectors’ report

Greek lawmakers approved the country’s 2013 austerity budget early on Monday, an essential step in Greece’s efforts to persuade its international creditors to unblock a vital rescue loan installment without which the country will go bankrupt.

The budget was passed by a 167-128 vote in the 300-member Parliament. It came a days after a separate bill of deep spending cuts and tax hikes for the next two years squeaked through with a narrow majority following severe disagreements among the three parties in the governing coalition.

Prime Minister Antonis Samaras pledged that the spending cuts will be the last Greeks have to endure. ‘Just four days ago, we voted the most sweeping reforms ever in Greece,’ he said.

‘The sacrifices (in the earlier bill and the budget) will be the last. Provided, of course, we implement all we have legislated.’

‘Greece has done what it was asked to do and now is the time for the creditors to make good on their commitments,’ he stressed.

Athens says that with the passage of the two bills, the next loan installment, worth about $40 billion, should be disbursed.

Without it, the government has said it will run out of cash on Friday, when $6.35 billion worth of treasury bills mature.

Finance ministers from the 17-nation Euro-zone would be meeting in Brussels later in the day, with Greece high on the agenda.

However, German Finance Minister Wolfgang Schaeuble has indicated it is unlikely that the ministers would decide on the disbursement at that meeting.

‘We all ... want to help Greece but we won’t be put under pressure,’ Schaeuble told the weekly newspaper Welt am Sonntag.

Schaeuble said that the so-called troika of debt inspectors are unlikely to deliver their report on Greece’s reform programme by Monday.

The creditors also want to see what the debt inspectors have to say about Greece’s debt sustainability.

But speaking minutes before the vote, Samaras pledged that the bailout funds would be disbursed ‘on time’. Finance Minister Yannis Stournaras also stressed the precariousness of Greece’s cash reserves, with the treasury bills due on Friday.

‘Without the help of the European Central Bank (ECB), the refunding of these treasury bills from the banking system will lead the private sector to complete suffocation,’ pointed out Stournaras.  
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