Prime Minister
Alexis Tsipras says his government won’t bring another austerity bill to
parliament on the eve of a crucial Eurogroup meeting focusing on Greece. Greece’s
creditors – its fellow-eurozone countries – are reportedly pressing him to accept a raft
of austerity measures that would kick in after the current austerity programme
ends in mid-2018.
“There is no
way we are going to legislate a single euro of measures beyond what the
agreement says, and that applies especially for the period after the
[adjustment] programme ends,” he told national daily Efimerida
ton Syntakton today, on his Syriza party’s two-year anniversary in
power.
Days ago,
conservative opposition leader Kyriakos Mitsotakis decried
the upcoming anniversary. “Never in the last seven years – ever since the
crisis so violently struck Greek society – was the horizon darker for the ship
of Greece. Runaway taxation is strangling every productive Greek.”
Tsipras lashed
out against the opposition’s accusations of incompetence. “Do [New Democracy
and Mitsotakis] … believe that we should agree to legislate in advance for
2019? Do they think we should pass a reduction of the taxable income threshold
and a further cut in pensions?”
While Tsipras
rules out any possibility of a Greek departure from the eurozone, creditors are
concerned about his leftwing government’s tendency to increase social spending,
and his ability to maintain a primary surplus of at least 3.5 percent of GDP.
That is the amount of tax revenue creditors want Greece to set aside to repay
them.
The
International Monetary Fund, in particular, believes
that the reforms currently undertaken by Greece are not enough for it to
achieve such a surplus. It also disagrees with the goal of a 3.5 percent
primary surplus, because this “would generate a degree of austerity that could
prevent the nascent recovery from taking hold.”
According to
figures released on Tuesday, Syriza has managed to generate an unexpectedly
large surplus, because tax revenues are above
expectations. The finance ministry reports earnings of €54bn last
year, €1.68bn above target. This helps to give the state a primary
surplus of €4.4bn rather than the target €1.98bn.
That surplus has
come at a high cost. Public health sector workers protested outside the prime
minister’s office on Wednesday, saying that the national healthcare system “is
crumbling”. Contrary to government promises to spend more on health and
education this year, the health ministry’s 2017 budget has
been cut by €129mn to €4.268bn.
The high surplus
also comes in part from delaying government payments to suppliers. The health workers’ union says hospitals
owe their suppliers €1.8bn, up from €0.7bn when Syriza
assumed power. The union also says no new hires have been made, contrary to
Tsipras’ post-election promise to hire 4,500 doctors and nurses.
Greek living
standards have also crumbled since Syriza assumed office. A report by the Labour
Institute out on Tuesday says that 37 percent of Greek households
subsist on less than €10,000 a year.
Three quarters of all households saw their
income fall last year, according to the Institute, the private sector’s main labour
think tank. Fully one half of households now depend on a pension as their main
source of income.
European
Commissioner Pierre Moscovici has ruled out an agreement between Greece and its
creditors on Thursday, on how to implement the next round of austerity measures.
He believes February 20 is the last-ditch Eurogroup before France and Germany -
and possibly Italy and Spain – become embroiled in general elections, whose
outcome may well make an agreement with Greece even more difficult.
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