Pension cuts decision expected at December Eurogroup as February election scenarios surface


Speculation is swirling about snap elections in February as Greece’s creditors are delaying a response to a Greek request for the suspension of pension cuts due to come into effect in January.

A European official indicated on Monday that a decision on whether the pension cuts will apply has been put off for a summit of eurozone finance ministers scheduled for December 3.

Any decisions will only be made once Greece’s draft budget for 2019 has been tabled in Parliament and submitted for perusal by the European Commission next month and certainly not at the eurogroup meeting next week, the official told reporters in Brussels.

The Finance Ministry has gathered data to substantiate its claim that the further reduction of pensions is not a structural measure and officials are expected to argue that point with foreign auditors.

According to sources, officials close to Prime Minister Alexis Tsipras believe that the verdict of European creditors on the pensions issue – whether positive or negative – could prove to be a catalyst for developments. If the cuts are averted, the government will be able to go to snap polls in February declaring a “political victory.”

The government will also have the bonus of being able to offer handouts from this year’s budget primary surplus in December.

Alternatively, if Greece’s creditors insist on the implementation of the measure, the government could choose to clash with the lenders and go to the polls in a climate of antagonism as the political damage from the pension cuts would be significant.

An argument in favor of snap elections in February is the element of surprise as government officials have widely suggested that the likeliest date for elections is in May, when European Parliament and local authority elections are planned.

The so-called Prespes name deal with the Former Yugoslav Republic of Macedonia and the difference of opinion between Tsipras and his coalition partner Panos Kammenos on the issue could also influence the timing of elections.

According to some analysts, the name deal could come to Greece’s Parliament as early as January.

If Kammenos votes down the agreement, as he has pledged to do, that would give Tsipras enough time to break with his coalition partner and call snap polls for February. (The government is expected to garner at least 152 votes from other parties and independent MPs.)

As election speculation mounts on the domestic front, Tsipras is in New York today where he is to meet with Turkish President Recep Tayyip Erdogan on the sidelines of the United Nations General Assembly and hold talks that are expected to focus on migration.