November 15, 2017
A Christmas bonus for poor Greeks
Alexis Tsipras announced the redistribution of €1.4bn in a TV appearance on Monday night. The announcement caught everyone by surprise, even if this "social dividend" has been discussed for some time. He said the bonus was possible because the Greek economy performed exceptionally well, with a growth rate of around 2%, decreasing unemployment and rising employment, and a primary surplus above the 1.75% target. Tsipras pointed out that the handout is more than twice as much as the €615m last year, and that this is largely within the parameters agreed with the institutions.
Tspiras announced the following payouts:
- €720m will be paid out before Christmas to 3.4m people. The payments will be tax-free and will depend on income, assets, and household size. Nobody earning more than €18,000 a year will receive anything. These one-off payments will range between €250 and €900, depending on income and family status.
- Another €315m goes to pensioners to compensate them for the 2012-2016 "illegal health contribution payments" as he said.
- And €360m is for the financially troubled Greece’s Public Power Corporation (DEH), to cover the gap for subsidised services they offer and to prevent electricity tariff increases.
The reaction in the media was one of utter disbelief. The conservative party accused Tsipras of dressing this up as a gift. This is money he had taken before by overtaxing the middle class or that was due to be paid back anyway after a court ruling. Macropolis remarked that the timing was just to draw attention of the left voters back to him after last Sunday’s first round leadership contest of the new centre-left alliance attracted more support than expected. Kathimerini notes that while Tsipras is paying out funds, public investment programmes are frozen. Despite reassurances that the investment target will be met, the article says the government promised the same last year but eventually sacrificed it for the distribution of a social dividend of €615m.