EWG to criticize Greek government handouts

EWG to criticize Greek government handouts

Tuesday’s Euro Working Group will discuss a critical report on Greece’s recently announced measures on pensions and VAT, which Kathimerini has seen, while senior eurozone finance ministry officials are due to decide whether to re-enact the short-term measures for easing Greece’s debt that were frozen last week.

However, according to one eurozone official, it is by no means certain a decision will be reached on Tuesday. Besides studying the report, the ministry officials will review developments over recent days and produce a snapshot of the progress of Greece’s current bailout review following the return of the creditors’ representatives from Athens.

According to the same source, the progress that the creditors’ mission does have to show from talks in Greece is minimal, so it is far from clear what position the member-states will take.

Dated December 14, the report states that “the issue of handouts was discussed with Greek authorities in a meeting on December 13,” but this was six days after the public statements by Prime Minister Alexis Tsipras. The report is particularly critical of the process the Greek government followed, saying, “The Greek authorities in their previous letter informed the institutions they considered the possibility of using part of the overperformance of the budget for social purposes, but since then there has been no discussion or analytical proposal.”

On the pensioners’ handout, the report says there are significant concerns regarding the procedure and the essence of the measure. Besides the fact the creditors were not informed, the report notes, “It is doubtful whether the measures are sufficiently targeted to deal with the biggest needs.” It also says the measures may generate expectations among pensioners for more handouts in future and the sense that the reforms made could be offset.

On the value-added tax discount on four Aegean islands, the report is far less critical, saying that “the total fiscal cost of the measure is still being calculated, but it is not very big.” European Commission estimates put it at 67 million euros for 2017.

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