NICOSIA, Cyprus (AP) — Cyprus' lawmakers have overwhelmingly approved the 2013 state budget amid efforts to finalize a bailout deal with international lenders in order to rescue the country's troubled banks and pay its bills.
The budget incorporates deep spending cuts and tax increases that were agreed in talks with the European Commission, the European Central Bank and the International Monetary Fund. Lawmakers approved about two dozen such measures in the days leading up to Wednesday's budget vote.
Cyprus' €17.5 billion ($23 billion) economy is projected to shrink 3.5 by percent of gross domestic product and unemployment to reach 13.7 percent next year.
A draft version of the bailout stipulates spending cuts of 7.25 percent of GDP and a budget surplus target of 4 percent of GDP by the end of 2016.