Parliament passes 2019 draft budget, following another clash between PM and main opposition leader

Wednesday, 19 December 2018 00:02

Greece's closely scrutinized draft 2019 budget was passed by a majority of Parliament MPs on Tuesday evening, following a marathon debate and yet another acrimonious clash between Greek Prime Minister Alexis Tsipras and main opposition leader Kyriakos Mitsotakis - essentially a preview of next year's election battle.

The final vote showed 154 MPs voting in favor - the deputies of ruling SYRIZA, a handful of MPs from the junior coalition Independent Greeks (AN.EL) party - and even a deputy with the Union of Centrists who "broke ranks".

Out of 297 MPs present in the legislature, 143 voted against the budget, all from opposition parties, including Mitsotakis' New Democracy party.

Beyond the timely issue entailed in the draft budget, the Tsipras-Mitsotakis debate expanded to other issues, such as Monday's bomb attack against the Skai-Kathimerini media groups and the provisional Prespa agreement.

In terms of euros and cents, the approved budget forecasts a 2.5 percent GDP growth rate next year and a 3.6 percent primary budget surplus, as a percentage of GDP, along with a package of "countervailing" measures, such as an increase in investments of 11.9 percent, an increase of exports by 5.8 percent and imports by 5.2 percent. Finally, unemployment is forecast to ease to 16.7 percent, according to the leftist-rightist coalition government that drafted the budget.

The "positive" measures include a marginal reduction in VAT rates - after they were boosted to 24 percent in 2016 - by 262.5 million, a cut in very high social security contributions for self-employed professionals and a small decrease, by 1 percentage point, in the corporate tax rate, from 29 percent to 28 percent.

Conversely, another 1.73 billion euros in additional social and welfare spending was axed on the altar of avoiding a pre-legislated round of pension cuts, an austerity measure that European creditors allowed Athens to suspend.

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