Greece en­acts pen­sion handout de­spite Euro cred­i­tor warn­ings

‘Sig­nif­i­cant con­cerns on both process and sub­stance’

Kuwait Times - - BUSINESS -


Greek law­mak­ers on Thurs­day ap­proved a pen­sion handout that has set the coun­try on a col­li­sion course with hard­line Euro­pean cred­i­tors who ac­cuse the strug­gling euro­zone mem­ber of de­fi­ance. A to­tal of 196 law­mak­ers out of 257 present from across the party di­vide ap­proved the bill in a row that has also brought sim­mer­ing EU dis­putes over aus­ter­ity to the fore. The handout mea­sure, an­nounced by un­der-pres­sure left­ist Greek Prime Min­is­ter Alexis Tsipras last week, ear­marks 617 mil­lion eu­ros ($656 mil­lion) for a one-off pay­ment to low-tier pen­sion­ers.

Athens says the pen­sion handout will come out of a one-bil­lion-euro tax sur­plus, but Euro­pean cred­i­tors on Thurs­day said the Greek move raised “sig­nif­i­cant con­cerns on both process and sub­stance” re­gard­ing the coun­try’s bailout obli­ga­tions. In the joint state­ment, rep­re­sen­ta­tives from the Euro­pean Cen­tral Bank, the Euro­pean Com­mis­sion and the Euro­pean res­cue fund said they would now de­cide whether to up­hold a Eurogroup de­ci­sion grant­ing Greece short-term debt re­lief ear­lier this month.

Tsipras on Thurs­day said the sit­u­a­tion had to be re­solved “with­out black­mail” on the part of Greece’s cred­i­tors. “I be­lieve that we can have a break­through with­out black­mail and with re­spect of the sovereignty of each coun­try,” said the left­ist leader, who fought with his Euro­pean peers to within an inch of tak­ing Greece out of the euro last year, as he ar­rived for an EU sum­mit in Brus­sels.

France weighed into the de­bate with un­char­ac­ter­is­tic force, led by Pres­i­dent Fran­cois Hol­lande who in­sisted that Greece be “treated with dig­nity” in the on­go­ing dis­pute. France has de­fended Greece against a hard­en­ing stance by Ger­many and Eurogroup head Jeroen Di­jsell­bloem. A spokesman for Di­js­sel­bloem on Wed­nes­day said the euro­zone was sus­pend­ing the re­centlyan­nounced debt re­lief scheme for Athens in re­tal­i­a­tion at not be­ing fully briefed on Tsipras’s handout plan­swhich also in­clude a lower sales tax for Greek is­lands tack­ling mi­gra­tion.

“The in­sti­tu­tions have con­cluded that the ac­tions of the Greek gov­ern­ment ap­pear to not be in line with our agree­ments,” said the spokesman for Di­js­sel­bloem, who heads the 19-na­tion euro­zone, which over­sees Greece’s mas­sive 86-bil­lion euro bailout. The dis­pute es­ca­lated within hours, with both French Fi­nance Min­is­ter Michel Sapin and Euro­pean eco­nomic af­fairs com­mis­sioner Pierre Moscovici-him­self a for­mer French fi­nance min­is­ter-pub­licly dis­tanc­ing them­selves from the Eurogroup de­ci­sion. “In­di­vid­ual state­ments are not the col­lec­tive state­ments of the Eurogroup,” said Sapin, not­ing the de­ci­sion had not been taken unan­i­mously by the 19-mem­ber club.

Diverg­ing views

The spat has brought to the fore the widely diverg­ing views in Ber­lin and Paris on the mer­its of long-term aus­ter­ity. France has tra­di­tion­ally taken a far softer line on Greece than Ger­many dur­ing the years of ne­go­ti­a­tions over Athens’ crip­pling debt and need for bailout funds. Tsipras, who has his own trou­bles at home with his rat­ings in de­cline, has taken a stand on the prin­ci­ple of national sovereignty.

“We are not a colony,” his gov­ern­ment spokesman said last week, when the hand­outs were first an­nounced. And Tsipras him­self on Wed­nes­day said the cred­i­tors had to “re­spect the Greek peo­ple, who have made ma­jor sac­ri­fices these past seven years in Europe’s name”. Iron­i­cally, Greek pen­sioner as­so­ci­a­tions have re­jected the one-off handout-worth at least 300 eu­ros per per­son-as “peanuts”. — AFP

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