Prime Minister Alexis Tsipras on Tuesday announced a series of pension handouts and tax cuts in a last-ditch attempt to shore up support for his leftist SYRIZA ahead of local authority and European elections on May 26, while also declaring measures for 2020.
The measures, announced by Tsipras during a press conference at Zappeio Hall, appeared designed to appeal to several social groups.
They include a permanent benefit for pensioners who saw their monthly payments cut during the crisis years – some 800 million euros is to be distributed to retirees – as well as a series of cuts to value added tax.
Tsipras also announced the immediate reduction of value-added tax on food products and services from 24 percent to 13 percent, and on energy bills from 13 percent to 6 percent.
The premier also heralded a package of “growth-oriented” measures for 2020 including the abolition of a solidarity levy on incomes below 20,000 euros and the introduction of measures aimed at drawing investments and encouraging employers to hire young Greeks.
Conservative New Democracy said the tax relief was “welcome,” but also slammed Tsipras for cribbing from ND’s economic program while criticizing it for “demolishing the economy and the middle class with overtaxation” before offering pre-election handouts.
The measures for this year are worth 1.1 billion euros, while those for 2020 have an estimated fiscal cost of 3.2 billion euros and would require Greece’s international creditors to lower the country’s primary surplus targets. In a bid to reassure lenders, Greek authorities have promised to set aside 5.5 billion euros in an escrow account, which would serve as a guarantee that Greece would meet its fiscal targets up to 2022.
The announcement of the measures came as the government attempts to shift to a more positive narrative following a censure motion lodged by New Democracy against Alternate Health Minister Pavlos Polakis, following the latter’s comments about a conservative MEP candidate who is wheelchair-bound.
ND’s motion prompted the government to call a confidence vote which is to be held on Friday night following three days of debate.
Another development that has put the government on the spot is the publication of photographs showing Tsipras on a luxury yacht last summer, following the devastating fires in eastern Attica, which killed more than 100 people. The wife of the late businessman to whom the yacht belonged, Pericles Panagopoulos, told Proto Thema that the premier had holidayed on the yacht. Katerina Panagopoulou said her current husband proposed the idea because the premier “seemed tired.”
ND leader Kyriakos Mitsotakis remarked that soon Tsipras will have the opportunity for “permanent vacation, after the elections.”
In the confidence debate in Parliament, which begins on Wednesday, Mitsotakis is expected to slam Tsipras for his insistence on leftist SYRIZA having the moral highground over the conservatives.