The Greek parliament yesterday approved a budget for next year that imposes yet more austerity on the debt-choked nation, hours after thousands took to the streets shouting: “We can’t take it any more.”
The bill targets a budget deficit of 7.4 percent of GDP next year, down from about 9.4 percent this year, through more spending cuts and tax increases, in order to put Greece in line with terms of the bailout that saved it from bankruptcy in May.
“We will do whatever it takes to succeed,” Greek Prime Minister George Papandreou told lawmakers just before they started to vote. “We will change this country.”
PHOTO: AFP
The budget was approved on a strict party-line vote by the 156 ruling Socialist party lawmakers in the 300-strong parliament.
Public transport ground to a halt in Athens on Wednesday as about 3,000 protesters rallied peacefully in front of parliament to protest wage cuts in the public sector and other steps meant to help stem a crisis that has shaken the eurozone, spread to Ireland and threatens others like Portugal.
“We have no hope, we are just drowning,” said Apostolos Kostopoulos, 46, a Public Power Corp technician whose salary was cut.
“Parliament is voting today on a budget that will plunge people deeper into poverty,” he said as others waved a large Greek flag covered with “For Sale” tags.
Another 2,000 people joined a separate anti-austerity march, but overall turnout was much smaller than in previous protests. Some Greeks questioned the point of countless strikes that have failed to divert the government from its austerity path.
“We don’t agree with austerity, but nothing is going to change. The government will not change policies just because we take to the streets,” said Susanna Apostolaki, 43, a secretary.
The new spending cuts and tax rises in next year’s budget build on an estimated 6 percentage points reduction of deficit this year.
However, Greece is still set to miss its fiscal targets for this year and the new measures have failed to calm fears about its ability to pull itself out of its crisis. Fitch agency said late on Tuesday it may cut the country’s credit rating next month to junk.
The leader of the main opposition party, the conservative New Democracy, told parliament that the budget for next year and the EU/IMF bailout would fail.
“PASOK [the socialist party] is lying when it says that the [EU/IMF] memorandum will take the Greek economy out of the crisis. It will deepen the crisis,” Antonis Samaras said. “The government’s policy is reducing GDP more than it reduces the deficit.”
Athens bus and subway drivers have been holding on and off strikes for two weeks and did not work at all on Wednesday, keeping Christmas shoppers from the city center and adding to the strain of recession-hit retailers.
The socialists, who revealed a gaping budget deficit after coming to power last year, have braved public discontent and taken draconian measures to meet the EU/IMF rescue terms.
This year already, the government has cut public sector wages by about 15 percent, increased the retirement age, frozen pensions and cut public spending. However, it has failed to boost tax collection as much as targeted, despite a hefty VAT increase.
Greece’s lenders say it is broadly on track with fiscal consolidation plans. However, partly as a result of the measures, the economy is forecast to shrink 3 percent next year after a 4.2 percent drop this year, with unemployment jumping to a record 14.6 percent from an estimated 12.1 percent this year.
Greek stock markets were little changed on Wednesday after the Fitch warning.
“It seems the market has already discounted the downgrade,” said Vasillis Vlastarakis, analyst at Beta Securities in Athens.
The move would bring Fitch’s rating in line with Moody’s and Standard & Poor’s, who already have sub-investment grade ratings on the country, and both are on review for further downgrades.
Papandreou said EU member states needed to deepen their cooperation to overcome the crisis or risk breaking up.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure