Greek parliament approves 2010 austerity budget

Athens - The Greek parliament voted early Thursday to adopt spending cuts and other austerity measures aimed at reducing the country's massive budget deficit. The Athens-based parliament voted strictly along party lines. All 160 lawmakers from the Panhellenic Socialist Movement (Pasok) voted in favor, while 139 opposition members were against the measure, state television reported.

Greece's current deficit is 12.7 per cent of Gross Domestic Product (GDP). The 2010 budget aims to cut the deficit to 9.1 per cent of GDP next year through 8 billion euros in spending cuts and tax hikes.

Greece is grappling with a national debt of more than 300 billion euros (440 billion dollars), the largest in the country's history. Last week, Socialist Prime Minister George Papandreou called on all Greeks to participate in rebuilding the economy in order to stop the debt-ridden country from going bankrupt.

He said the nation's aim was to reduce the deficit to less than 3 per cent of GDP.

"This budget is not just about reordering our economy, but also about rebuilding our credibility," Papandreou said just before the vote.

The opposition Communist party has criticized the austerity measures as a pretext for attacking the working class.

Greece is a founder member of the euro zone, but its public finances have spiralled out of control in recent months, leading to fears of a default that could undermine the European Union's flagship project.