Greek Prime Minister Alexis Tsipras took to the airwaves on Thursday evening to announce that “most” of the money that comprised this year’s primary budget surplus in Greece will be disbursed via an extraordinary holiday benefit to 1.6 million pensioners in the country of 11 million residents, an outlay worth 617 million euros.
Greek Prime Minister Alexis Tsipras took to the airwaves on Thursday evening to announce that “most” of the money that comprised this year’s primary budget surplus in Greece will be disbursed via an extraordinary holiday benefit to 1.6 million pensioners in the country of 11 million residents, an outlay worth 617 million euros.
Tsipras, hours after making a working visit to Israel, said the eligible beneficiaries are pensioners receiving below 850 euros a month in social security benefits. It wasn’t specified in his announcement if wealth and asset criteria will also be employed to bestow eligibility.
In directly pointing to his government’s interest in a “redistributive” economic policy, he said the benefit will be “asymmetrically” allocated, with those receiving the lowest monthly pensions getting a bigger bonus. The minimum 2016 “yuletide” bonus to eligible pensioners, he said, would be 300 euros.
Greece’s tax bureaus are expected to easily exceed this year’s target of a primary budget balance of 0.5 percent of GDP, following a wholesale “tax tsunami” in the country -- undertaken as a result of memorandum-mandated goals envisioned in the third memorandum, which Tsipras signed and delivered in August 2015. Higher income tax rates, spiked indirect taxes (VAT) on everything from beer to coffee to mobile phone bills, higher fuel fees, increased social security contributions and supplementary pension cuts were the “highlights” of fiscal policy applied in Greece during 2016.
Tsipras also said a highly controversial measure to harmonize VAT rates on various Greek islands to the “Scandinavian-like” level of 24 percent will not be activated for islands he said are bearing the brunt of the refugee / migrant crisis. However, he did not specific the duration of the suspension of application for the higher rate.
A later statement by Tsipras’ office reminded that the 1.6 million beneficiaries are among the 2.7 million people in the country receiving social security benefits, or 60.32 percent.
The breakdown for the unprecedented primary budget surplus “Christmas present” by the leftist government is 500 to 830 euros for 10 percent of the 1.6 million beneficiaries; 300 to 500 euros for some 570,000, and 300 euros for the remaining 30 percent, or 750,000 beneficiaries.
In a bid to head off what’s expected to be acerbic reactions by the opposition, Tsipras’ office said the sum, 617 million euros, is 4.7 times greater than a bonus (EKAS) allocated to low-income pensioners in 2017.
The EKAS bonus will be eliminated all together by 2018, as per the third memorandum.
The payment will be disbursed, assuming no last-minute delays or creditors’ opposition arises, on Dec. 22.
In one of the first reactions to the televised announcement by Tsipras, which was carried on the state-run channel, the head of main opposition New Democracy party’s press office took to Twitter to ridicule the lump sum holiday bonus.
Top ND cadre Makarios Lazaridis used a now derisive catchphrase associated with the first four-year and pre-eminently spendthrift PASOK government in the mid 1980s.
The phrase, supposedly uttered by then prime minister Andreas Papandreou, has since passed into modern Greek political lore as meaning “empty the coffers ahead of elections”.
Earlier, a less jovial ND statement accused Tsipras of trying to again fool the populace, this time the large caste of pensioners.
“After eliminating the low-income bonus (EKAS) and imposing higher taxes, he’s now promising a small welfare benefit. He’ll then take back the money multiple times over through new taxes and another reduction in pensions, something he’s already agreed to with creditors,” a terse ND statement read.