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Greece on collision course with lenders as ESM freezes debt relief
Source: The Guardian
Greece on collision course with lenders as ESM freezes debt relief
European financing body says it will not honour accord
after Greek PM announced pre-Christmas bonus for
pensioners
Helena Smith
Wednesday 14 December 2016 19.41 GMT
The dispute between Greece and its creditors has turned more ugly after the European body financing the country’s €86bn (£72bn) bailout programme decided to freezea debt relief deal.
The prime minister, Alexis Tsipras, was taken by surprise on Wednesday when the European Stability Mechanism announced it would not honour an accord to ease the burden of Greece’s debt pile. The decision, taken in direct retribution for a series of surprise social welfare measures unveiled by the leader, is likely to put Athens on a war footing with lenders amid mounting signs of the Greek crisis flaring again.
Last week, Tsipras took the unexpected step of declaring a one-off pre-Christmas bonus for an estimated 1.6 million retirees living on €800 or less a month. This week he added that the Aegean islands would be exempt from a sales tax demanded by creditors.
“Following recent proposals by the Greek government to spend additional fiscal resources for pensions and VAT, our governing bodies have put their decisions temporarily on hold,” said a spokesman for the ESM, referring to a deal that would have deferred an interest rate increase on Greece’s debt.
[font size=1]-snip-[/font]
European financing body says it will not honour accord
after Greek PM announced pre-Christmas bonus for
pensioners
Helena Smith
Wednesday 14 December 2016 19.41 GMT
The dispute between Greece and its creditors has turned more ugly after the European body financing the country’s €86bn (£72bn) bailout programme decided to freezea debt relief deal.
The prime minister, Alexis Tsipras, was taken by surprise on Wednesday when the European Stability Mechanism announced it would not honour an accord to ease the burden of Greece’s debt pile. The decision, taken in direct retribution for a series of surprise social welfare measures unveiled by the leader, is likely to put Athens on a war footing with lenders amid mounting signs of the Greek crisis flaring again.
Last week, Tsipras took the unexpected step of declaring a one-off pre-Christmas bonus for an estimated 1.6 million retirees living on €800 or less a month. This week he added that the Aegean islands would be exempt from a sales tax demanded by creditors.
“Following recent proposals by the Greek government to spend additional fiscal resources for pensions and VAT, our governing bodies have put their decisions temporarily on hold,” said a spokesman for the ESM, referring to a deal that would have deferred an interest rate increase on Greece’s debt.
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Read more: https://www.theguardian.com/world/2016/dec/14/greece-on-collision-course-with-lenders-as-esm-freezes-debt-relief
