A European Stability Mechanism (ESM) spokesman on Thursday warned that last week’s abrupt “holiday bonus” announced by the Greek prime minister raises concerns over Athens’ bailout commitments, while nevertheless adding that fiscal targets aren’t expected to be affected by the 617-million-euro one-off outlay.
The “risk”, according to the ESM official, lies in a permanent nature of the welfare package. Continuing on a mostly “diplomatic” course, the same official said Greece’s Eurozone partners are responsible for deciding how short-term debt relief measures will be implemented, and when.
The last phrase is directly linked with a temporary “freeze” of the measures, at least until January 2017, announced by the EFSF a day earlier — essentially an abrupt reproach to the leftist government’s spending “splurge” last Thursday.
“According to a preliminary assessment by the institutions, that was distributed to the ESM members today (Thursday), the proposed measures by the Greek government raise significant concerns on both process and substance as regards MoU commitments, especially regarding pensions,” the official said, adding:
“While those measures reduce the safety margin around the 2016 fiscal target, they are not expected to change significantly the projected fiscal outcomes in 2017 and 2018, although they raise risks regarding the targets, should the measures be extended in the future. Euro-area member-states will decide how to proceed with the short-term debt measures agreed in the Eurogroup meeting on 5 December.”
