World Bulletin / News Desk

Greek Prime Minister Alexis Tsipras on Saturday said the country was on the verge of economic recovery as lawmakers approved a new round of pay cuts and tax hikes for 2017.

"(Next year) will be a milestone in taking the country out of crisis, and this is the first budget of optimism, growth and recovery," Tsipras told parliament.

Tsipras predicted an agreement if all sides show political goodwill, and a return to debt markets early next year, but he refused to adopt labour market reforms "contrary to the European model".

In the ongoing talks, the country's international creditors -- fellow EU states and the International Monetary Fund -- have controversially called for legislation to make crippling strikes less likely while also making layoffs easy.

The new budget approved by 152 out of the 298 lawmakers present levies around one billion euros ($1.07 billion) in extra taxes on cars, fixed telephone service, pay television, fuel, tobacco, coffee, beer and other items.

Public spending on salaries and pensions will also be cut by 5.7 billion euros next year.

Tsipras needs to stay on good terms with EU-IMF creditors to conclude the reforms audit early next year.

Greece hopes that a deal will finally persuade the European Central Bank (ECB) to include Greek sovereign debt in its asset purchase programme, known as quantitative easing, or QE.

Without access to QE, the country will not be able to make a planned return to debt markets by early 2018, according to the Greek finance ministry.