Wednesday, 14 December 2016

Greece’s Tsipras shifts back into anti-austerity rhetoric

This article was published by Al Jazeera International. 

After 16 months of implementing austerity measures he had once railed against, Greek Prime Minister Alexis Tsipras on Tuesday returned to his old, anti-austerity campaign rhetoric.

Speaking from the southeastern Aegean island of Nisyros, he called the technocrats overseeing Greece’s fiscal adjustment programme “silly” for failing to agree on the level of austerity Greece needs to implement.

“In theory we have technocrats to tell us the right numbers, but they can’t even get the numbers right,” Tsipras said. “They’ve often admitted that they’ve been wrong, but now they’re telling us again, ‘what’s wrong is right.’”

Tsipras is alluding to the International Monetary Fund’s attempts to distance itself from the latest Greek bailout, which has been financed solely by the European Stability Mechanism – the Eurozone’s sovereign distress fund.

In a blog post on Monday titled “The IMF is not asking Greece for more austerity’, Poul Thomsen, once the IMF’s iron-fisted overseer of the Greek programme, said that Greece needs to modernise its economy, not cut social spending further.

We think that these cuts have already gone too far, but the ESM program assumes even more of them,” Thomsen writes.  

Thomsen highlights the IMF’s chief disagreement with the ESM in calling for a major overhaul of Greek debt, something Eurozone hardliners led by Germany are adamantly opposed to. “Greece’s debt is highly unsustainable and no amount of structural reforms will make it sustainable again without significant debt relief,” Thomsen writes.

An ESM spokesman said he was surprised at the IMF's public statement, and Greek finance minister Euclid Tsakalotos struck back at the IMF's position in an interview on Tuesday

Taking advantage of this widening rift, Tsipras has now fired a broadside against the programme in its entirety. Last week he promised to spend an additional €617mn ($650mn) on poor pensioners, although he promises to keep spending within limits agreed with creditors.

On Nisyros, he promised to suspend a sales tax hike on Aegean islands, which creditors imposed on his government last year.  

“I’m talking about all the islands of the North Aegean and the Dodecanese,” Tsipras said, “which are bearing the burden of the receiving and hosting [refugees].”

Among those islands is Chios, which on November 30 held a one-day strike to protest against the increase of sales tax from 17 to 24 percent, in line with the rest of the country. Islands have traditionally enjoyed a few benefits because of the additional costs and hardships of island life. The hoteliers’ association of Lesvos called the hike “an unexpected gift to our competitors”.

Tsipras says he will hire more than 1,500 teachers and 1,000 medical personnel on the islands. He also promises infrastructure works worth $64mn until 2020.

“I’m waiting to see what, of all this, will actually get done, and whether it will be done in such a way as to be effective,” says Manolis Vournos, Chios’ mayor. “The prime minister made a mistake in tying these things to the refugee issue, whereas he should have tied them to island status. Greece is the only country in the European Union without a recognition of island status.”

Eastern Aegean islands have become increasingly restive over the presence of more than 16,000 migrants and refugees, who have been building up there since an EU-Turkey Statement in March. Under its terms, Turkey will take back those who do not qualify for international protection in Europe, but applicants may not leave the islands for the Greek mainland and continental Europe. This has turned places like Chios and Lesvos into a vast processing zone.

Last month, hoteliers on Lesvos refused a rent subsidy from the United Nations High Commission for refugees in return for putting up migrants, fearing that the refugee industry will replace the tourism industry. Chios’ municipal council went back on an agreement to allow the government to build a massive new refugee camp on the island, demanding the refugees’ removal instead.

The islands’ stance is changing national policy. In a letter to the European Commission, migration minister Yannis Mouzalas on Tuesday asked for permission for migrants from countries with low recognition rates to “be temporarily transferred to pre-removal centers in the mainland.”

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