ATHENS, Greece (AP) — Greece's Parliament passed a budget of continued austerity as mandated by the country's creditors, but which forecasts robust growth for 2017.
Prime Minister Alexis Tsipras said it will mark Greece's "final exit" from its nearly decade-long financial crisis.
The budget adds more than 1 billion euros in new taxes, mostly indirect taxes on items from phone calls to alcohol. It also cuts spending by over 1 billion euros.
The budget was backed by the left-dominated ruling coalition and opposed by all other parties. It passed by a vote of 152-146 on Saturday.
Despite the continued austerity, Tsipras predicted that 2017 will be a "landmark year" with 2.7 percent economic growth. He underlined that his government achieved a 2016 primary surplus — excluding debt servicing — more than double the original forecast and defended his decision to a total of 617 million euros this Christmas to some 1.6 million low-income pensioners, replacing a holiday bonus scrapped by Greece's bailout creditors.
Tsipras also said that the current assessment of Greece's third bailout program will be completed soon, without additional austerity measures.
There are those, however, who believe that the budget's growth estimate is exaggerated.
The Parliament's own Budget Office has said that the combination of extra taxes and spending cuts will "in the short term" have "a recessionary effect." And finance minister Euclid Tsakalotos confirmed to Parliament that the International Monetary Fund demands additional measures, including wage and pension cuts, worth 4.5 billion euros ($4.75 billion) starting in 2019, as well as public sector layoffs.
Opposition leader Kyriakos Mitsotakis said Tsipras' handout to the pensioners was a desperate move and that the prime minister was preparing a so-called "heroic exit" through early elections that he is bound to lose. Tsipras, on its part, insisted electons will take place as scheduled, in 2019.
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