Cuts and more cuts Athens passes 2013 budget

 

Demonstrators stand outside the Greek Parliament protesting against austerity measures in Athens on November 11, 2012 (AFP Photo / Panayiotis Tzamaros))

Source: Russia Today

http://rt.com/news/greece-government-austerity-budget-439/

The Greek government has passed a 2013 budget stipulating new rounds of harsh budget cuts. It comes just after Greece announced the passage of more austerity measures, triggering violent clashes in Athens.

The budget was approved with 167 voting in favor and 128 opposed, while 5 abstained.

The recent austerity package, passed in a narrow vote, was apparently insufficient to appease eurozone finance ministers into granting the cash-strapped nation another tranche of much-needed bailout money.

Without the rescue loan, Greece would effectively default on November 16, the date it must repay a three-month treasury bill worth €5 billion.

Greek trade unions called for another demonstration outside Parliament on Sunday ahead of the lawmakers’ vote on the budget.

Earlier in the week, around 70,000 demonstrators rallied as Parliament voted on the new austerity program.

On Saturday, MPs began debating the 2013 budget. It was the second budgetary test the Greek government has faced in less than a week.

Athens is planning further spending cuts totaling 9.4 billion euro, mainly in state wages, pensions and benefits, all of which have already seen drastic reductions over the past two years.

Several hundred Greek civil servants staged a protest on Saturday in front of parliament, where initial discussions over the 2013 draft budget were held ahead of the vote. The protesters railed against the reduction of 125,000 civil servant jobs by 2016, part of the new austerity package that squeezed through parliament on Wednesday.

 

Protesters demonstrate outside the Greek parliament against the new austerity measures in Athens on November 11, 2012 (AFP Photo / Aris Messinis)

Cutting it close

Greece's 2013 budget predicts that the economy will shrink by a worse-than-expected 4.5 percent next year, and that the country's debt will swell to 346 billion euro ($434.3 billion), or 189 percent of the country's gross domestic product.

Athens is hoping to securing a further 31.5 billion euro of desperately needed international aid. Even then, it would still need to borrow over 68 billion euro next year, the draft budget says

This is in addition to the new austerity package, which includes 18.5 billion euro ($23.6 billion) in cuts and labor law reforms.

Greece has so far avoided default by introducing a series of austerity measures needed to secure two huge bailout loans from a 'Troika' of creditors: The EU, the International Monetary Fund and the European Central Bank.

The recent push for further austerity has sparked popular anger in a country facing its sixth year of recession, while unemployment rose above the 25 percent mark in July.

Meanwhile, the government admits that the program is unfair, and will probably drive the country deeper into recession, Dimitris Yannopoulos, an Economist and Editor at the Athens News newspaper told RT.

According to Yannopoulos, the only benefit the new set of austerity measures will bring is the long-awaited rescue package – which Germany is in no hurry to release.

“Berlin implies that we want more conditions attached to the program dealing with the control of these funds as well as the control of the budgetary administration [in Greece],” he explained.

 

Riot police guard the Parliament building during a demonstration against austerity measures as Greek deputies consider a budget vote (AFP Photo / Panayiotis Tzamaros)

 

Demonstrators march to the Greek Parliament protesting against austerity measures in Athens on November 11, 2012 (AFP Photo / Panayiotis Tzamaros)

 

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Ron Paul: America has already gone over the fiscal cliff

 

Former Republican presidential candidate, Representative Ron Paul (T.J. Kirkpatrick/Getty Images/AFP)

Source: Russia Today

http://rt.com/usa/news/paul-fiscal-cliff-obama-364/

US President Barack Obama demanded from Congress immediate action to prevent America from falling of a so-called fiscal cliff, but Rep. Ron Paul (R-Texas) says it might be too late to keep the country afloat.

Speaking with Bloomberg Television on Thursday, the lawmaker who ran against Pres. Obama during the last two elections said he expects that America’s financial woes are beyond repair.

“We’re so far gone,” said the congressman, who will retire from the Hill this year after serving 12 terms in the House. “We’re over the cliff. We cannot get enough people in Congress in the next 5 to 10 years who will do the wise things. We have to prepare for having already fallen off the fiscal cliff.”

On the campaign trail leading up to the Nov. 6, 2012 election, Rep. Paul proposed an array of ideas he said would save the country from economic disaster, including returning to a gold standard and abolishing the Federal Reserve, America’s central bank. On his part, Pres. Obama vowed to keep the company in tact if elected to a second term, and Friday told reporters at the White House that he expects Congress to come to his side and do what’s right to prevent what Rep. Paul says is inevitable now.

“I’ve invited leaders from both parties to the White House next so we can start to build consensus around the challenges that we can only solve together,” said the president in reference to worries over America’s fiscal standing next year. “At a time when our economy is still recovering from the great recession, our top priority has to be jobs and growth.”

“We can’t just cut out way to prosperity,” said Obama. “If we’re serious about reducing the deficit, we have to combine spending cuts with revenue. That means asking the wealthiest Americans to pay a little more in taxes.”

“I’m not wedded to every detail of my plan,” he said. “I’m open to compromise; I’m open to new ideas.”

According to Rep. Paul, that’s just more pandering from the president.

“They’re just looking for the truth,” said the congressman. “They say, ‘Well, all we need is a little compromise.’ Well nobody expects that because they do not admit the truth, and the truth is that we are broke.”

“How do you compromise? The only way you can compromise is if you agree on what to cut.”

From the White House on Friday, the president said, “The American people voted for action, not politics as usual,” and insisted that “What the American people are looking for is cooperation,”consensus and common sense from the government. “Most of all they want action,” he added, insisting, “I intend on delivering for them during my second term.”

Rep. Paul tells Bloomberg it’s a “bad sign” that the public, not the president, is on the receiving end of however the White House tries to fix the country’s financial woes. “People do not want anything cut,” he said. “They want all the bailouts to come. They want the Fed to keep printing money. They do not believe we have gone off the cliff or are close to going off the cliff.”

 

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Greece will have to wait for next round of cash - German minister

 

Finance Minister Wolfgang Schaeuble. (AFP Photo / Johannes Eisele)

Source: Russia Today

http://rt.com/news/greece-bailout-german-minister-294/

Germany, the pillar of European economic stability, is skeptical that Athens will receive the next tranche of aid “in the coming weeks,” despite painful new austerity measures adopted this week in Greek Parliament.

­German Finance Minister Wolfgang Schaeuble, one of the main architects of the Greek response team, warned Thursday that it is unlikely that Greece will reach a quick deal with its international creditors on the next credit line.

“At the moment I do not see the decisions being made” that are required for a definitive agreement between the Troika of international auditors examining Greece's finances and the Greek government, he told a conference in Hamburg.

Despite the poor assessment, the minister welcomed Athens' new measures, which were approved on Wednesday, by saying that Greece has “a pro-European majority and it held last night despite demonstrations and a general strike. All is not lost – all is not won either, but we have no use for cynicism… the Greeks want to remain in the euro.”

This is a conclusion with which many Greeks seem to disagree, as massive demonstrations ahead of Wednesday's vote erupted in the capital. At least 100 people were detained as police used tear gas and water cannons to disperse a crowd that voiced anger against a rise in the retirement age to 67, cuts to minimum wage and benefit reductions.

While the rallies pushed forth with their demands, Greek Parliament agreed by a narrow margin to €18.5 billion in budget cuts demanded by creditors.

Now Greece awaits the €31.5-billion tranche of aid from the Troika – the European Central Bank, European Union and the International Monetary Fund, its fourth emergency loan package in three years.

Economics analyst Antonis Vradis says the massive new loan will simply create more debt for the country.

“These packages are moving in the entirely wrong direction. There is a definition of insanity, and according to it, insanity is doing the same thing over and over again and expecting different results. This is what is happening right now. You have a package after which the country's national debt is going to go up from 175% to 190%. The only way to stop this policy of austerity is if people actually stop them,” Vradis, a member of the Occupy London movement, told RT.

 

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