Greek parliament approves 2014 budget plan

ATHENS - Greece's parliament approved a budget plan on Saturday filled with over 3 billion euros of austerity cuts that sees the debt-laden country emerging from a six-year recession next year.

After nearly going bankrupt and almost crashing out of the euro zone last year, Greece expects growth of 0.6 percent in 2014 and hopes to secure more leeway on its debts to the European Union and the International Monetary Fund.

"This is a historic day," Prime Minister Antonis Samaras told lawmakers, calling the 2014 plan a budget of recovery and hope. "People's sacrifices bore fruit and changed the course of the country."

Outside parliament, an anti-austerity rally called by the country's largest labour unions drew only a few hundred people, a shadow of former demonstrations where tens of thousands took to the streets of Athens to protest the belt-tightening.

A total of 153 lawmakers voted in favour of the 2014 budget plan in the 300-seat house. Samaras' conservative-led coalition controls 154 seats in parliament.

Athens sees a budget surplus before interest payments at 812 million euros in 2013 thanks to higher than expected tax revenues. Posting a primary surplus is key as it would open the way for Greece to pursue debt relief from the EU and IMF.

But Athens and its lenders disagree on the forecasts for 2014, arguing over the size of a potential budget gap next year and the slow pace of reforms.

International lenders have not given their approval for the plan, which sticks to a target for a primary budget surplus (before interest costs) of about 1.5 percent of GDP next year, and have said that unless it found new savings, Athens would miss its surplus target by about 2 billion euros.

Greek Finance Minister Yannis Stournaras has said the difference had narrowed to about 1 billion euros.

The so-called troika of EU, IMF and European Central Bank inspectors, who left Athens last month, will return to Greece in January to complete their latest review, the IMF said.

The troika's technical teams were expected to continue talks in Athens next week.

"We expect a full negotiating team to return to Athens in January, after the authorities have made further progress in implementation, with the objective of reaching a staff-level agreement," an IMF spokeswoman said.

The review, which has dragged on since September, is crucial to the release of up to 5.9 billion euros in bailout funds, although Greece has no immediate funding pressures.

The lenders want Greece to ease restrictions on bank foreclosures and on companies carrying out mass layoffs. Samaras has rejected further across-the-board wage and pension cuts to fill any budget gaps.

The economy has shrunk by nearly a quarter since 2008, and repeated rounds of austerity have squeezed households and sent unemployment to record highs of over 27 percent.

"The bailout has destroyed Greece and will be remembered in history as a tragedy," Alexis Tsipras, head of the main opposition, the leftist Syriza party, said during the debate.