EU concerned as Greece passes anti-poverty bill

The following article is taken from the South African Press Association 

by Christine Pirovolakis and Alexandra Mayer-Hohdahl

Greece financial crisis
Greece has recently passed an anti-poverty bill, despite concerns from the European Union.

Greek lawmakers on Wednesday overwhelmingly passed an anti-poverty bill intended to provide economic support for families suffering financially, despite EU concerns that the country’s creditors were not consulted first.

Greece and its European partners have had trouble seeing eye to eye since the leftist government of Prime Minister Alexis Tsipras took power in January on an anti-austerity platform.

The legislation is one of several bills working its way through parliament aimed at easing the hardship created by years of economic turmoil and budget cuts.

The anti-poverty bill foresees aid to lower-income families such as free electricity, a rent allowance of up to 220 euros a month for 30,000 households and food vouchers for some 300,000 Greeks.

But the European Commission, one of Greece’s three creditors, has raised concerns that the measures may not be compatible with a bailout-extending deal struck between Athens and the Eurogroup of eurozone finance ministers on February 20.

A “central element” of that deal is that “the Greek authorities have to work in a constructive way with the institutions, … which implies that there be consultations on new measures,” EU Economy Commissioner Pierre Moscovici said on Wednesday.

Greek authorities have downplayed the concerns, which were first raised in a letter by the commission’s chief representative on the technical team monitoring Greece, Declan Costello.

“We are supporting the weak and needy. Who has the nerve and the right to send a letter which will condemn thousands of Greeks to freezing from the cold?” Tsipras said.

A second bill that would make it easier for Greeks to pay outstanding taxes and pension fund payments by extending timelines for payments is expected to be put to a parliamentary vote on Friday.

“Our creditors knew about these bills in advance,” government spokesman Gavriil Sakellarides told Greece’s Skai television, adding that the bill on combating poverty has a low budget of around 200 million euros (212 million dollars).

As for the debt settlement bill, the government says it will raise badly needed tax revenues.

Moscovici said the commission supports the idea of “helping the most vulnerable in the Greek society,” but is also committed to keeping Greece in the eurozone – which requires implementing the February 20 agreement.

There have been fears that Greece may have to leave the currency bloc if it does not manage to strike a new deal on reforms with its creditors and ends up bankrupt.

Hopes are high in Athens that Tsipras will be able break the bailout impasse when he meets with European leaders at a Brussels summit later this week.

Tsipras is looking to secure a political deal so that the country can be given access to the 7.2 billion euros remaining under its international bailout.

He is scheduled to hold talks with German Chancellor Angela Merkel, French President Francois Hollande, European Commission President Jean-Claude Juncker and European Central Bank President Mario Draghi at the summit, according to Greek media.

Germany, a main contributor to EU rescue loans, has insisted along with other European countries that Athens must implement reforms to address its economic problems if it wants to receive more aid.

But Tsipras is determined to reduce budget surplus targets which require more spending cuts and tax hikes.

Greece and its creditors launched a new round of negotiations last week on the new reforms the country will have to implement, but progress has been slow so far. SapaLogo

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