Handouts announced by Prime Minister Alexis Tsipras ahead of municipal and European Parliament elections next week appear to have raised concerns among European Union governments over whether Greece will be able to honor its pledges to creditors even as Finance Minister Euclid Tsakalotos indicated that more relief measures are in the works.
“People are worried about what has been announced. [They are] worried if Greeks will stick to commitments,” an EU official told journalists in Brussels on Tuesday.
Although Greece is not on the agenda of Thursday's Eurogroup meeting, the official said that Greek government envoys are likely to be questioned about the handouts announced last week.
The same official did not rule out that some European parliaments may not approve Greek plans for an early repayment of loans owed to the International Monetary Fund, as Kathimerini had reported on Tuesday.
Meanwhile Tsakalotos suggested that the government is planning to reintroduce the EKAS benefit for low-income pensioners.
In an interview with ANT1 TV Tuesday, he said authorities may bring back a “solidarity benefit” for low-income pensioners in a “more targeted form,” along with other measures, including making it harder for the state to seize the deposits of indebted businesses.
“The abolition of EKAS was admittedly one of SYRIZA’s greatest defeats,” Tsakalotos admitted.
MPs are Wednesday to vote on a series of handouts heralded by Tsipras in recent weeks, notably an annual bonus for pensioners, as well as reductions in value-added tax on certain goods and services.
Although the measures are to burden this year’s budget by an estimated 1.27 billion euros, Finance Ministry sources insisted Tuesday that the measures going to the House “are fully in keeping with the available fiscal space.”
Goldman Sachs has a different view, predicting that the European Commission will issue a stark warning to Greece about the possible risk of fiscal derailment in its June report.