The leftist SYRIZA government reportedly promised creditors that social security reforms in Greece will not be affected from a recent surprise welfare payment to pensioners, whereas a one-year suspension of higher VAT rates on a handful of islands will be absorbed by the 2017 budget.
The assurances were reportedly included in a letter sent by the Greek finance minister to the European Stability Mechanism (ESM) on Saturday, in order to unblock discussions aimed to implement short-term debt relief measures for Greece in January 2017.
The opposition has demanded that the entire letter, requested by European creditors and signed by Greek FinMin Euclid Tsakalotos, be released.
On Sunday, Christmas Day, unnamed government sources merely claimed that no “new commitments” were included in the communication, merely a reconfirmation of the Tsipras coalition government’s volition to implement memorandum provisions.
According to the ubiquitous government sources, the 617-million-euro “holiday bonus” abruptly announced earlier this month is a “one-off measure”.
Another highlight, as far as the statements by the sources is concerned, is a reference to a “contingency fiscal mechanism” in case primary budget surpluses are not met. The mechanism is an automatic spending cuts process, or “cutter”, that kicks in if fiscal targets aren’t met. The same sources repeated the government’s intent to meet those targets: 0.5 percent primary budget surplus (as a percentage of GDP) in 2016; 1.75 percent in 2017 and the ambitious 3.5 percent in 2018.
The sources made no mention of fiscal targets after 2018, the cause of continuing speculation and disagreements between creditors themselves.
