Finance Minister Euclid Tsakalotos on Monday dismissed officials who have expressed concern over the government’s handout policy ahead of the elections – including the head of the European Stability Mechanism, Klaus Regling – as “austerity supporters,” although concerns are also being raised by others much closer to home, at the Parliamentary Budget Office (PBO).
With the prime minister saying a holiday bonus over Christmas is also possible for pensioners, despite Regling’s strong words after last Thursday’s Eurogroup, speaking to the Athens-Macedonian News Agency on Monday, Tsakalotos defended this government policy and implied that Athens is relying on the strategy of alliances with friendly forces such as European Commissioner for Economic Affairs Pierre Moscovici and German Finance Minister Olaf Scholz.
Tsakalotos acknowledged that the reaction by the ESM chief was strong, and attributed it to the German official’s political stance – even though the head of the ESM is a technocrat – and put him in the same category as the Christian Democrat candidate for the Presidency of the European Commission, Manfred Weber. In contrast, he also cited the milder responses of Moscovici and Scholz.
However, the PBO’s fiscal data on the first quarter of the year justified the concerns of those who say there is no fiscal leeway for such big handouts. The general government’s primary budget surplus in the January-March period lagged that of last year by 79 million euros, while tax revenues shrank by 518 million euros on an annual basis.
The PBO noted that this decline was mainly due to the dividend of the Bank of Greece that last year was paid out in February, while this year it was not paid until April. On the expenditure side there was a 1.094-billion-euro increase from the first quarter of 2018.
Meanwhile the unpaid debts of the state to its suppliers and the taxpayers continued to rise in March, reaching 1.79 billion euros, from 1.665 billion in end-February, official data showed yesterday.