Slip Sliding Tsipras Will Offer 1B Euros in Handouts

FILE - In this photo released by Greek Prime Minister's office, Greek Prime Minister Alexis Tsipras delivers a speech from the western Greek island of Ithaca, legendary home of the ancient mariner Odysseus, hero of Homer's Odyssey epic, on Tuesday, Aug. 21, 2018. (Andrea Bonetti /Greek Prime Minister's Office via AP)

ATHENS – Plummeting in polls after reneging on anti-austerity promises, embattled Prime Minister and Radical Left SYRIZA leader Alexis Tsipras is set to offer 1 billion euros ($1.16 billion) in a series of giveaways when he speaks Sept. 8 at the Thessaloniki International Fair opening.

The event is traditionally where Premiers make promises they often don’t keep, in an effort to get a temporary bounce in the polls. Tsipras is far behind the party he unseated in 2015, the New Democracy Conservatives, with elections required to be held by October, 2019.

Speculation is building, however, that snap polls could be called earlier to thwart momentum for the Conservatives and with the handouts Tsipras is planning to give including suspending more pension cuts set to begin Jan. 1, 2019, said Kathimerini.

That could put in jeopardy a debt relief deal granted by the country’s lenders in a third bailout, this one for 86 billion euros ($99.84 billion) by the Troika of the European Union-European Central Bank-European Stability Mechanism (EU-ECB-ESM).

The Troika and Greece’s other lender in two first rescue packages of 240 billion euros ($278.62 billion), the Washington, D.C.-based International Monetary Fund (IMF) said the pension cuts would violate a memorandum Greece signed but Tsipras said it won’t.

He said the money to replace what would be lost by not going ahead with pension cuts would come from a primary surplus – which doesn’t include interest on the 326 billion euros ($378.46 billion) on the bailouts, the cost of running cities and towns, social security and state enterprises and some military costs.

The government is trying to build that surplus by also holding back payments to people and company owed money by the state, using them to subsidize pension levels but the IMF is insisting the government must proceed with the cuts to which Tsipras agreed after saying it was a Red Line he would never cross but jumped over.

The paper said the measures will also be financed by reducing Value-Added Tax (VAT) at cafes and restaurants to 13 percent, at a cost of 350 million euros ($406.33 million,) and cutting the hated ENFIA property tax surcharge that Tsipras continued after saying he would end it. A 30 percent cut would take 250 million euros ($290.23 million) out of the state coffers and is apparently aimed at mollifying angry taxpayers and voters.

Tsipras also plans to announce a reduction in social security contributions by self-employed professionals to 13 percent, at a cost of 150 million euros ($174.14 million), as well as house rent subsidies.
Suspending the pension cuts caused debate within the government with some officials saying a compromise must be worked out with the lenders instead of acting unilaterally, which could stir controversy, and that the support of rival parties must be sought.

The Eurozone and lenders may not decide until November, when it will become clearer whether Greece can meet a primary surplus budget target of 3.5 percent of Gross Domestic Product (GDP) that Tsipras said couldn’t be attained even though it was mostly built by deliberate overtaxing of the middle class as he also reneged on pledges to crush the oligarchy and put a 75 percent tax on the rich.