Greek austerity budget given vital backing

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Greek MPs approved the country’s 2013 austerity budget in a vital step to persuade international creditors to unblock a vital rescue loan instalment without which the country will go bankrupt.

The budget passed by a 167-128 vote in the 300-member parliament late on Sunday night, days after a separate bill of deep spending cuts and tax increases 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 the spending cuts 
would be the last Greeks had 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.”

Athens says the passage of the two bills, the next loan instalment, worth 31.5 billion euros (£25.2bn), should be disbursed. Without it the government has said it will run out of cash on Friday, when five billion euros (£4bn) worth of treasury bills mature.

Finance ministers from the 17-nation eurozone were meeting in Brussels yesterday, with Greece high on the agenda. But German finance minister Wolfgang Schaeuble indicated it was unlikely ministers would decide on the disbursement there and then, without a report on the country’s reform programme by the troika of debt inspectors.

“We all... want to help Greece, but we won’t be put under pressure,” he told newspaper Welt am Sonntag.

But speaking minutes before the vote, Mr Samaras pledged the bailout funds would be disbursed “on time”.