Greece government plans 1 billion euro for a Merry Christmas

7 years ago - Published in Finance, Fundamental Analysis

Greece plans to offer handouts worth 1 billion euros to poor Greeks who have suffered during the seven-year debt crisis after beating its budget targets this year, the government said on Thursday. The country expects to return to nearly 2 percent growth this year and achieve a primary surplus – which excludes debt servicing costs – of 2.2 percent of gross domestic product, outpeforming the 1.75 percent bailout target.

"The surplus outperformance which will be distributed to social groups that have suffered the biggest pressure during the financial crisis, will be close to 1 billion euros," government spokesman Dimitris Tzanakopoulos told reporters.

The government spokesman said that final decisions will be made in late November on how and when the “social dividends” will be distributed.
According to Tzanakopoulos, the economy is expected to return to almost 2 per cent growth and achieve a surplus, the proceeds of which will be distributed.

Last year in a surprise move, Prime Minister Alexis Tsipras announced a similar Christmas bonus to pensioners that angered Greece’s European creditors. Hundreds of thousands of Greeks have lost their jobs during a six-year recession that cut more than a quarter of the country’s gross domestic product.

With unemployment 21.3 percent and youth unemployment at 42.8 percent many households rely on the income of grandparents – although they have lost more than a third of the value of their pensions since 2010, when Athens signed up to its first international bailout.

Greece’s fiscal performance this year and its 2018 budget is expected to be discussed with representatives from its European Union lenders and the International Monetary Fund next week when a crucial review of its bailout progress starts.

Tzanakopoulos reiterated that Athens aims to wrap up the review as soon as possible, ruling out new austerity measures. Greece exceeded its goal for a primary budget surplus in 2015 and 2016.  
The announcement came a few days after Tsipras met with U.S. President Donald Trump in Washington where a multi-billion dollar military transaction was announced between the two countries during which Greece would upgrade its fleet of military jets.

Trump praised the deal as beneficial for creating thousands of U.S. jobs while many in Greece cried foul that the country was in no position to spend that kind of money on military projects.