Greece gears up for extra austerity as PM rejects early election talk

Greece gears up for extra austerity as PM rejects early election talk

Greece’s MPs approved the State Budget for 2017 on Saturday night which contains a host of fresh austerity measures as the country’s economy attempts to end a long period of economic crisis in the New Year.

The Syriza and ANEL coalition government deputies approved the Budget by a vote of 152 to 146.

Greek Prime Minister, Alexis Tsipras reiterated that his government will see out the four year term. He also defended his government’s economic policy and the recent social benefits announced. Tsipras predicted that 2017 will be a “landmark year” with 2.7 percent economic growth.

In a message to creditors, the PM said “we will not accept additional austerity beyond the end of the program nor tough measures in relation to labor reforms”.

Tsipras also attacked main opposition leader Kyriacos Mitsotakis, accusing him of monotonously demanding elections when all his predictions have been proved wrong and the economy is clearly recovering and meeting all targets.

The PM listed a series of positives proving that the economy is on track to recovery: In 2016 the economy stabilized and returned to growth; investments in Greece were up 3.5%; record tourist arrivals were registered; the recapitalization of banks last year was exemplary; and unemployment was brought down and will continue to drop, according to Tsipras.

On his part, New Democracy leader Kyriacos Mitsotakis reiterated the need for an early election, stressing that the sooner the government resigns the better for the country. Mitsotakis went on to say that no economy can stand the 3.5% primary surplus the government has agreed with creditors.

He argued that a drastic change to how the State operates is needed and that there is scope to reduce state expenditure without laying off civil servants.

Finally, Mitsotakis said Tsipras’ 617 million euro one off handout to pensioners was a desperate move and that the premier was preparing a so-called “heroic exit” through early elections that he is certain to lose while leaving a “mess” for his successor to deal with.

Meanwhile, a poll published on Sunday by Marc for “Proto Thema” newspaper showed New Democracy surge ahead of Syriza by 15.4 percentage points. The main opposition party stood at 30.5 pct with Syriza on 15.1 pct followed by the Communist Party (6.7 pct), neo-Nazi Golden Dawn (6.7 pct) and the PASOK/DIMAR Democratic Coalition (5.26 pct). No other party was above the 3 pct threshold for entry to parliament.

Moreover, 59.3 pct of respondents who voted for Syriza in the previous election said they were not planning to opt for the party again with 64.8 pct of all respondents saying the government’s work so far has been “negative”.

The government is expected to resume talks with creditors this week as part of the second review of the country’s third bailout program. With labor reforms and fiscal issues still on the table, Athens is considered certain to come under serious pressure to implement extra austerity in order to achieve long term primary surplus targets.

Despite the PM being adamant that a snap election is not on the cards, analysts and local media point out that if creditors push for extra tough measures the PM may be tempted to go to the people perhaps as early as February or March 2017. /IBNA