Greek budget

Lawmakers in Greece passed a budget for 2012 committing the government to tough fiscal goals in an effort to deal with the country's sovereign debt problem.

Three parties gave overwhelming backing to the budget plan of caretaker Prime Minister Lucas Papademos, approving fresh measures to cut government spending.

"This is a difficult budget ... with ambitious targets," Papademos told parliament just before the vote in the early hours of Wednesday. The budget was passed by a 258 to 41 majority in the 300-seat assembly.

"The financial crisis in our country is not a passing storm," Papademos warned. "Given the size of the problems, our national effort will not be completed in 2012. It will take many years."

"We can't afford to keep whining," said the premier. "The targets are ambitious but feasible."

Papademos had earlier described the budget as a key step in starting to reverse policies that have burdened each Greek with more than 30,000 euros ($40,000) in state debt.

The 2012 budget predicts the economy contracting by 2.8 percent as the country enters a fourth year of recession. However, it also projects a primary surplus - excluding interest payments on debt - of 1.1 percent of gross domestic product.

The budget forecasts a revenue increase of 4.5 billion euros and public spending cuts of some 5 billion euros.

Rising taxes, asset sales

The extra income is to be raised through an overhaul of the tax system, reducing tax breaks and minimum income thresholds. Reforms were also planned to the health and social security sectors, with a delayed asset sale set to proceed "at a faster pace," Papademos said.

The debate coincided with the third anniversary of the death of 15-year-old Alexis Grigoropoulos in a fatal police shooting in central Athens. Clashes broke out in front of the parliament building as anarchists clashed with riot police during a commemorative march.

There was violence earlier in the day on the fringes of a separate demonstration by some 2,000 students outside parliament.

Former European Central Bank deputy chief Papademos replaced beleaguered predecessor George Papandreou last month after negotiations to agree on a government that will guide the country through its immediate economic problems ahead of elections in March.

Author: Richard Connor (AFP, AP, dpa, Reuters)
Editor: Nancy Isenson