Despite waves of national protests and demonstrations, the Greek parliament approved its 2011 budget, thereby introducing a slew of comprehensive austerity measures.

Socialists, who run the government, passed the budget by a vote of 156-142.

Under terms of the $144-billion bailout Greece received from the European Union and the International Monetary Fund, the budget calls for severe spending cuts and tax hikes. The government is seeking to reduce the deficit from about 9.4 percent of GDP this year to 7.4 percent in 2011. It eventually wants to cut that deficit to 3 percent by 2014.

However, protesters persisted in their opposition to the budget, even after the measure passed. Indeed, unions representing public transportation workers staged yet another strike just prior to the vote to protest salary cuts.

The private sector union The General Confederation of Greek Workers (GSEE) attacked the government’s posture.

The struggle by the workers, the pensioners and the unemployed against these anti-worker and anti-social measures continues, it declared in a statement.
The workers and unions of the country will continue and intensify their action and struggles as long as these unjust and harsh neo-liberal policies continue.”

Prime Minister George Papandreou defended the need for the budget.

We will not go bankrupt. In 2012 we will return to a path of growth,” he said.

“We will not give speculators or ratings agencies the pleasure. We will do whatever it takes to succeed. We will change this country.

Among other things, the budget will hike the value-added tax to 13 percent from 11 percent (for most items); impose a levy on large profitable companies equal to 10 percent of profits generated in the prior year; reduce government operating costs; freeze pension freezes; and enact huge spending cuts in health care and defense.

The Greek economy, which is expected to contract by 4.2 percent this year, is anticipated to decline by 3.0 percent next year, according to the country’s Finance Ministry. Unemployment, estimated at 12.1 percent now, is expected to climb to 14.6 percent next year.