* Ruling parties have 168 of parliament's 300 seats
* Budget must be approved for Athens to tap aid
* Bulk of 9.4 billion euros in cuts come from wages,
By Michael Winfrey and Harry Papachristou
ATHENS, Nov 11 Greece is expected to approve a
2013 budget on Sunday that includes unpopular spending cuts and
tax hikes so it can receive an international aid payment and
The parliamentary vote is a test of confidence in Prime
Minister Antonis Samaras' three-party coalition government as it
tries to steer the country through a debt crisis and out of a
A separate austerity and reform package, also a condition of
resuming the bailout and unlocking more than 30 billion euros in
aid from the International Monetary Fund and European Union
later this month, was approved on Wednesday by a thin majority.
The government faces plummeting popularity, disagreements
over policy within the coalition and violent protests outside
parliament but has used its majority in the assembly to push the
difficult measures through.
"Today we must demand sacrifices so there is hope for future
generations," Finance Minister Yannis Stounaras said in
parliament on Saturday. "Re-establishing our credibility is our
only passport to recovery."
Greece's biggest private and public sector unions,
representing around half of Greece's 4 million workers, will
hold a protest outside parliament against the budget at around
Samaras and his allies say the budget will put Greece back
on track to meet goals agreed with its lenders.
The leftist-led opposition says it will deepen a recession that
has put one in four working-aged Greeks out of a job.
"For three years you have been going from bailout to
bailout, rescue to rescue," said Panagiotis Lafazanis, a leader
for the deputy caucus of the leftist SYRIZA. "You've already
bankrupted the Greek people."
Lawmakers started debating the law at around 1000 GMT and
were expected to vote at around 2200 GMT.
After abstaining from Wednesday's vote on the austerity
package because it objected to labour reforms, the junior ruling
Democratic Left party has pledged to support the budget.
It and its ruling partners - Samaras's New Democracy and the
Socialist PASOK party - are expected to pass the budget in what
will be effectively a confidence vote in their coalition with a
majority of 168 of parliament's 300 seats.
According to the budget draft, the Mediterranean state's
economy will shrink for its sixth year running, by 4.5 percent.
The budget deficit will be 5.2 percent of gross domestic
product (GDP), down from 6.6 percent expected this year. But
once debt maintenance costs are removed, Greece will show a tiny
surplus for the first time in decades.
These deficit figures assume Athens' lenders will extend a
deadline for it to narrow it fiscal shortfall by two years in
exchange for the new belt-tightening package.
The biggest cost-reductions next year are pension cuts of up
to 15 percent for almost half the total 9.4 billion euros in
budget savings and public wages cuts of 1.2 billion.
Greece's fiscal adjustment has hit workers more than the
wealthy elite. This has become a sore point in the nation of 10
million, where media have published lists of bankers, lawyers,
shipping magnates who they say moved cash to Switzerland.
"It's always the same. The poor pay and no one touches the
rich and the tax evaders. Winter is coming and I can't afford
heat," said 41-year-old housewife Angeliki Petropoulou.
The budget foresees debt rising to 346 billion euros, or
almost 190 percent of GDP, from 175 percent this year.
EU and ECB officials say that means that Athens will not be
able to reduce its debt to 120 percent of GDP by 2020, the level
the IMF has said is the ceiling for debts to be sustainable in
the long term.
That has triggered a debate on how to reduce the debt, which
include discussions on cutting interest rates on Greece's
official loans, letting the ECB give profits from Greek bonds it
holds back to Athens, helping bail out Greek banks with the EU's
EFSF rescue fund, and other measures.