With the Greek government eager to push the reset button and reverse its slide in the polls, senior officials hinted again Thursday that pre-agreed pension cuts in January could be scrapped.
Digital Policy Minister Nikos Pappas, who is also a close aide of Prime Minister Alexis Tsipras, said that the government could act unilaterally to suspend the cuts without the approval of Greece’s creditors.
“Portugal refused pension and wage cuts without there being a crisis,” Pappas said in a Twitter post, citing the southern European country that is also under surveillance after emerging from its bailout.
Deputy Prime Minister Yiannis Dragasakis echoed similar sentiments.
“The 2019 budget will not include pension cuts. On the contrary, it will include relief measures for weaker social strata,” he told Real FM radio.
Their remarks came amid reports on Wednesday that the International Monetary Fund remains fixed to the position that the cuts must move ahead even if they are not required for Greece to meet budget targets.
Nonetheless, government officials appeared dismissive, saying that the IMF’s positions on the issue are well known and pointing out that the Washington-based organization’s forecasts for the Greek economy – on which the call for further austerity measures is based – have missed the mark.
Moreover, Athens has noted the divergence between the IMF and European officials who have appeared more flexible on the issue. European Economic and Monetary Affairs Commissioner Pierre Moscovici has suggested as much in a series of recent comments while, according to sources on Wednesday, the EC’s envoy to Greece, Declan Costello, is working on a possible compromise.
Against this backdrop, Tsipras is convening a cabinet meeting Thursday, the last before his keynote speech at the Thessaloniki International Fair (TIF) next week, where he is expected to announce handouts.
Analysts say Tsipras is seeking to strike a delicate balance between sending a message of stability to international markets, which remain cautious over the Greek economy’s outlook, and expectations cultivated by the government, namely that it can now move ahead with an independent economic policy, including tax relief and restoring some labor rights.