Following a debate of five days in the Greek parliament, the 2016 budget was approved in the early hours of Sunday morning with a total of 153 SYRIZA- ANEL coalition MPs in favor of the budget plan, 145 opposition MPs against and two MPs being absent. 

The budget maintains a primary surplus target of 0.5% of GDP for 2016 and thegovernment forecasts zero economic growth this year and a contraction of 0.7% in 2016 from a previous forecast of 2,3% and 1.3% decline, respectively. The budget also foresees privatization revenues of 1.9 billion euro, while public debt is projected to reach 187.8 % of GDP (from 180.2 percent in 2015) despite spending cuts of around 2 billion euro and additional taxation of citizens and businesses.  

During his speech at the Parliament, Prime Minister Alexis Tsipras noted that the government’s agreement has secured partial restructuring of debt with a 1.3% interest rate covering the country’s needs until 2019 and an increase in the average maturity of loans to 33 years, adding that the discussion on the necessary debt reduction will start after the first evaluation of the program. 

Moreover, he defended the budget saying that – for the first time since the economic crisis hit Greece- the aim is to promote social justice in conditions of budgetary constraint and difficulty. “The 2016 budget proves our will and ability to lead a great and difficult social effort amid extremely difficult and adverse conditions” the Prime Minister said, adding that “behind the numbers, one can see the efforts made to support the labor forces and the most vulnerable social groups” and citing as examples of social policy 300 million euro earmarked for hospitals and 12 jobs programs offering short-term employment to 100,000 people.