AKIPRESS.COM - Greek Prime Minister Alexis Tsipras issued a resounding call for debt relief on Monday as his government unveiled an austere 2016 budget sticking strictly to international bailout targets in a new spirit of cooperation with European and IMF creditors, reports Reuters.

The draft budget, released as Tsipras delivered his keynote four-year policy programme to parliament, projected that the economy would stay in recession next year, shrinking by 1.3 percent after a 2.3 percent contraction in 2015, before returning to growth in 2017.

Tsipras, whose leftist government was re-elected on Sept. 20 after performing a U-turn and accepting a bailout of up to 86 billion euros ($96.1 billion) in return for spending cuts, tax rises and economic reforms under strict external supervision, told lawmakers he would bargain hard for debt relief.

The budget contained a total 6.4 billion euros of austerity measures this year and next, of which 4.34 billion will fall in 2016.

Euro zone finance ministers have agreed to discuss a limited debt restructuring, but not writedowns, if Greece successfully concludes a first review of the new bailout programme by the end of this year, which entails passing far-reaching reforms of taxation, pensions and public administration.

Tsipras said the government would pass all the required laws to achieve a successful bailout review and open the door for debt renegotiations, which were crucial for economic recovery.

"We will propose an extension of (loan) maturities, a reduction of interest rates and a conversion to stable interest rates," he said.

"We will also propose a growth clause (linking the amount of debt service to GDP growth) and an extended grace period (on debt service payments) to create enough fiscal space to support investment activity and the restructuring of our welfare state."