Germany’s Frankfurter Allgemeine Zeitung (FAZ) has focused on PM Alexis Tsipras’ Christmas spending spree and the so called “social dividend”, handouts based on economic criteria and deriving from that portion of the primary surplus that exceeds targets.
The subtitle of the FAZ article tells the story in a nutshell: “Prime Minister Alexis Tsipras is handing out gifts ahead of this year’s elections, but all of that has a price.”
“The pre-election gifts are reminiscent of the Horn of Amalthea, the mythological symbol of abundance. About 1.4mn families received a ‘social dividend’ of up to 1,350 euros in December. Moreover, 115,000 public sector and armed forces pensioners received a total of 223mn euros as compensation for previous cuts,” the article reports about the court-ordered returns.
VAT, freelancers’ contributions
“Because the government, due to pressures from creditors, was forced to abolish a special VAT tax discount for Aegean islands, it launched a pilot programme that will distribute a fuel subsidy with a total 570mn euro price tag for the next three years. Beyond that, about 250,000 freelance professionals – from farmers to lawyers – whose insurance contributions were hiked by 27 percent in 2016, will now receive a 30 percent discount on their contributions,” FAZ noted.
ENFIA down, pension cuts scrapped
“Even the dread ENFIA real estate tax will be reduced [slightly] and there will be a hike in the minimum wage, which is now 586 euros gross monthly.”
“The most important pre-election gift is the cancellation of legislated pension cuts, worth a total of 2.06bn euros. The government persuaded the European Commission with the argument that the net additional cost will be only 355mn euros, as the cuts would have led Athens to increase social benefits [to counter-balances losses].”
Without long-term planning
FAZ concludes that the Tsipras administration has yet to come up with a long-term economic plan and has not even taken fundamental decisions in that direction. “One-off stipends are being disbursed to more and more groups of beneficiaries, which are arbitrarily determined when [super] primary surpluses are reached.”
‘Tsipras the Nobel Peace Prize winner?’
In another article, entitled Tsipras the Nobel Peace Prize winner? , FAZ notes rumours that Tsipras may be a candidate for the Nobel Peace Prize (for the Greece-FYROM Prespa naming accord), underlining “how unpredictable politics can be”.
“Tsipras, who began as a candidate who would free Europe from ‘Merkelism’, without hesitating to link the Chancellor to National Socialists, may end up without a debt haircut, but with a Nobel Peace Prize and as a close partner of the German Chancellor.