With his re-election prospects likely on the line too, Prime Minister and Radical Left SYRIZA leader Alexis Tsipras’ hopes to halt pension cuts he agreed to implement on Jan. 1, 2019 are up in the air after a German newspaper said the country’s creditors will insist on them.
His popularity having plummeted after reneging on anti-austerity promises, Tsipras wants to stop the pension cuts that were part of the government’s agreement with the Troika of the European Union-European Central Bank-European Stability Mechanism (EU-ECB-ESM).
That was part of a third bailout in the summer of 2015, this one for 86 billion euros Tsipras sought and accepted after saying he would do neither because it came with more crushing measures he swore to reject then agreed to implement.
Germany is the biggest contributor to three international rescue packages of 326 billion euros ($375.05 billion) that began in 2010 but demanded in return big pay cuts, tax hikes, slashed pensions, worker firings and the sale of Greek state assets to insure German banks would be paid back before anyone else.
The Greek daily paper Ta Nea, citing unnamed sources in the office of German Chancellor Angela Merkel, who’s been a hardliner over austerity, said the new pension cuts Tsipras swore he would never implement are part of his agreement and must be done.
Tsipras has argued that the cuts would be withdrawn if the country hits a primary surplus of 3.5 percent of Gross Domestic Product (GDP), which doesn’t include interest on the loans or debt, the cost of running cities and towns, state enterprises, social security, some military costs and holding back payments to those owed money by the state.
The German chancellery reportedly said the pension cut scheme “is primarily subject to the post-memorandum supervision (of Greece’s finances and economic policy) by the institutions (creditors) and the Eurozone.”
That comes after Kathimerini said that Merkel was apparently reconsidering her objection to Tsipras’ hopes to withdraw the pension cuts, contradicting Ta Nea.
Merkel’s office put out a press release stating: “We never comment on press reports citing purported statements by the Chancellor (Merkel). Regardless of this, what applies is this: Greece, as part of its (fiscal adjustment) program and its conclusion, has committed to continuing and implementing a reform course, which was outlined in the ESM program. Implementation of this commitment is primarily subject to the post-memorandum supervision by the institutions and the Eurozone”.