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Greece Approves 2016 Budget With Less Spending, Higher Taxes

  • Associated Press

Greek Finance Minister Euclid Tsakalotos attends a parliamentary session in Athens, Dec. 5, 2015.

Greek Finance Minister Euclid Tsakalotos attends a parliamentary session in Athens, Dec. 5, 2015.

Greece's Parliament has approved the 2016 budget that includes deep spending cuts and tax hikes amid economic recession.

The budget passed early Sunday, 153-145, with two lawmakers absent in the 300-member Parliament. The vote was strictly along partisan lines.

The government forecasts zero economic growth this year and a contraction of 0.7 percent in 2016. Earlier, it had predicted declines of 2.3 percent and 1.3 percent, respectively.

Prime Minister Alexis Tsipras told Parliament that growth would resume in the second half of 2016 and a strong tourist season could let the country avoid a recession altogether.

Despite spending cuts of around 2 billion euros ($2.18 billion) and a similar amount in tax hikes, debt is forecast to grow to 327.6 billion euros ($356 billion), or 187.8 percent of gross domestic product, from 180.2 percent in 2015.

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