The Greek parliament has passed the 2016 budget featuring tax increases and spending cuts demanded by international lenders under the cash-strapped country’s third bailout package.
The budget was approved early Sunday, with 153 votes in favor and 145 against, while two lawmakers were absent in the 300-member legislature.
The 2016 budget foresees €5.7 billion (USD 6.2 billion) in public spending cuts, including €500 million (USD 543 million) from defense and €1.8 billion (USD 1.95 billion) from pensions. It also comprises tax hikes of over €2 billion (USD 2.17 billion).
The budget further expects zero economic growth in 2015, compared to the October forecast of a 2.3-percent contraction for the debt-ridden state.
It also projects a 0.7-percent contraction for 2016, better than the initial 1.3 percent forecast in the country’s draft budget.
Meanwhile, Greece’s debt is expected to grow to €327.6 billion (USD 356 billion) or 187.8 percent of the country’s gross domestic product (GDP) from 180.2 percent in 2015.
Greek Prime Minister Alexis Tsipras, who came to power on an anti-austerity platform, described the budget as “a difficult exercise.”
“Behind the (budget’s) numbers anybody can see the agonizing effort to support the working classes,” he added.
However, Ioannis Plakiotakis, the interim head of the right-wing New Democracy opposition party, criticized the 2016 budget as “anti-growth” and “socially unfair.”
“Syriza’s (the party leading the ruling coalition) first national budget proves that what they have been saying about social sensitivity is just a myth. The budget shows that 2016 will be much worse than 2015,” he said.
Greece’s coalition government has seen its parliamentary majority dwindle due to its efforts to apply spending cuts.
Back in July, the government of Tsipras agreed to demands for austerity measures in exchange for the €86 billion (USD 93 billion) bailout that Athens accepted from its creditors – the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF) – to save the Mediterranean state from crashing out of the eurozone.
Greece has already received two bailouts in 2010 and 2012, worth a total of €240 billion (USD 272 billion) from its creditors following the economic crisis in the Southeast European country back in 2009.