Greek govt will continue austerity drive in bid to stave off default

Just after the Greek government announced the passage of more austerity measures, Athens said it needs another round of harsh cuts in its 2013 budget. Greek trade unions are calling for another demonstration on Sunday ahead of the lawmakers’ vote.

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

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

Greek trade unions are calling for another demonstration outside parliament on Sunday ahead of the lawmakers’ vote on the 2013 draft budget.

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

On Saturday, MPs began debating the 2013 budget on which they are due to vote late Sunday. The vote is 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.

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.