Eurogroup chairman Jeroen Dijsselbloem on Saturday said negotiations for short-term debt relief measures for Greece will resume, following same-day written assurances conveyed by the country’s finance minister that Athens is committed to reforms.
The leftist Greek government waited until the day before Christmas, as most European leaders were being feted with Yuletide carols, to send assurances to European creditors. The demand for the latest commitment on the part of Athens came after the debt relief measures were frozen last week, in the wake of Greek PM Alexis Tsipras’ surprise “holiday bonus” to 1.6 million pensioners in the country.
The one-off bonus will take a 617-million-euro chunk out of state coffers for distribution to pensioners receiving less than 850 euros a month in gross social security benefits. No asset or property criteria will be employed in allocating the bonus.
In an announcement, Dijsselbloem expressed his satisfaction at the letter by his Greek counterpart, Euclid Tsakalotos, saying the road is now open to take decisions for short-term debt relief measures next month.
In fact, the Dutch FinMin and Eurogroup chair Tweeted:
“I have received a letter in which my Greek colleague has confirmed his commitment to previous agreements …”
Back in Athens, unnamed government sources were quoted as saying that the “Yuletide bonus” vindicated the leftist government’s decision for more than half of Greece’s pensioners, in a bid to gloss over the very chilly response by European creditors to the unscheduled spending spree.
Creditors, as represented by the Eurozone and ESM, had demanded that the Tsipras government not take another such measure without prior consultation; they also wanted the effect on the 2016 state budget’s execution gauged.
A lesser measure announced by Tsipras was to suspend, for a year, the harmonization of VAT rates on a handful of eastern Aegean islands plagued by the nearly two-year refugee / illegal migration crisis that erupted in the Aegean from third country nationals landing on the islands from Turkey.
Had the measure not been suspended, the highest VAT rate would have skyrocketed to the “Scandinavian-like” level of 24 percent, which the SYRIZA government imposed on the rest of crisis-bedeviled country this year.
