Bank of Greece Says Tsipras Handouts Were Costly

Bank of Greece Governor Yannis Stournaras (AP Photo)

ATHENS – Pension bonuses and tax cuts that Prime Minister and Radical Left SYRIZA leader Alexis Tsipras made in a failed bid to regain favor with voters means Greece won’t meet fiscal targets, the Bank of Greece said in a report days before July 7 snap elections.

Bank of Greece Governor Yannis Stournaras is a frequent critic of government figures he’d said were too optimistic, drawing the ire of Tsipras who has been trying to wiggle out of austerity measures he imposed after swearing he wouldn’t do that.

With Tsipras expected to lose badly to the poll-leading New Democracy – the party Stournaras served as finance minister in a previous coalition led by the Conservatives – the report took another shot at SYRIZA’s governance which has seen Tsipras claiming credit for a slow recovery from a more than 9 1/2-year fiscal crisis.

The report has forecast that Greece’s primary budget surplus for 2019 will fall short of the requirement of 3.5 percent of Gross Domestic Product (GDP) required by the country’s creditors, the Troika of the European Union-European Central Bank-European Stability Mechanism (EU-ECB-ESM), saying it will be only 1.9 percent, 2.1 percent in 2020 and 2.2 percent in 2021.

That could put New Democracy leader Kyriakos Mitsotakis in a bind if he becomes Prime Minister as expected, leaving him no wiggle room economically and without ammunition to mandate tax cuts as he’s promised.

1 Comment

  1. 3.5% was never realistic, they assumed 750,000 young Greeks would have stayed in Greece to work on euro 200 a month, to pay for the recovery. not so, young ,motivated Greek entrepreneurs who are being relied upon, went where the money to loan was cheapest and the taxes lower…..certainly not Greece, where 90% of income is taken in taxes. PM Tsipras needs to step aside.

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