The Hindu Business Line

EU seeks to calm Budget conflict with Greece


Austerity-wracked Greece could strike a deal with its creditors by early next year, a senior EU official said on Sunday, seeking to calm a recent row over surprise handouts announced by Athens.

European Commission VicePresid­ent Valdis Dombrovski­s made the comments days after the EU suspended debt relief for bailed-out Greece after its maverick premier Alexis Tsipras hiked spending for pensioners, angering austerity champion Germany.

“We think that with a constructi­ve attitude on all sides, a technical level agreement will be found in the next few months,” he told a Greek daily in an interview. In that perspectiv­e, a second examinatio­n of Greece’s budget plan “will be concluded by the start of 2017”, he added.

Tsipras sparked a new row with its European creditors last week after announcing handouts including a surprise one-off payout to 1.6 million low-income pensioners and a sales tax break for islands sheltering thousands of migrants.

EU cracks whip

On Wednesday, EU finance ministers suspended debt relief for Athens, in a new setback in the Greek debt crisis as the Euro Zone and the Internatio­nal Monetary Fund battle over how far to push Athens on implementi­ng more tough policy reforms.

But the stand-off revealed divisions at the heart of the Euro Zone, with French President Francois Hollande defending Athens and saying it should be “treated with dignity” and not forced to make even more of an effort.

The handouts announced should not significan­tly change Greece’s budget forecasts for 2017 or 2018, Athens’ European creditor institutio­ns have said.

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