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Greece Approves 2013 Austerity Budget

(c) Sky News 2012

Greek MPs have approved the country's 2013 austerity budget - which involves fresh spending cuts.

The budget was passed by a 167-128 vote in the 300-member parliament.

It came days after a separate bill of deep spending cuts and tax hikes for the next two years squeezed through with a narrow majority following severe disagreements among the three parties in the governing coalition.

Prime Minister Antonis Samaras pledged that the spending cuts would be the last Greeks have to endure.

"Just four days ago, we voted the most sweeping reforms ever in Greece," he said.

"The sacrifices (in the earlier bill and the budget) will be the last. Provided, of course, we implement all we have legislated.

"Greece has done what it was asked to do and now is the time for the creditors to make good on their commitments."

Athens says that with the passage of the two bills, the next loan instalment, worth 31.5bn euros, should be disbursed. Without it, the government has said it will run out of cash on Friday, when 5bn euros worth of treasury bills mature.

Finance ministers from the 17-nation eurozone are meeting in Brussels later today, with Greece high on the agenda.

However, German finance minister Wolfgang Schaeuble has indicated it is unlikely that the ministers will decide on the disbursement at that meeting.

"We all ... want to help Greece, but we won't be put under pressure," Mr Schaeuble told the newspaper Welt Am Sonntag.

Mr Schaeuble said the so-called troika of debt inspectors would probably not deliver their report on Greece's reform programme by Monday. The creditors also want to see what the debt inspectors have to say about Greece's debt sustainability.

But speaking minutes before the vote, the prime minister pledged the bailout funds would be disbursed "on time".

Finance minister Yannis Stournaras also stressed the precariousness of Greece's cash reserves, with the treasury bills due on Friday.

"Without the help of the European Central Bank, the refunding of these treasury bills from the banking system will lead the private sector to complete suffocation," Mr Stournaras said.

Disbursement of the next instalment is essential "because the state's available funds are marginal, although better than expected because the 2012 budget is being executed better than expected," he said.

He added that the funds are needed to pay salaries and pensions, as well as for the import of medicines, fuel and food.

Greece is mired in a deep recession heading into its sixth year, with more than a quarter of Greeks unemployed.

Battered by a mountain of debt and a gaping budget deficit, Greece has been relying on international bailout loans from other eurozone countries and the International Monetary Fund since May 2010.