Sunday, September 30, 2018
Tsipras Tests Greek Budget Credibility With Pitch to Voters
September 30, 2018
Greek politicians are gambling their post-bailout credibility with lenders and investors on voter-pleasing promises as they look to elections that may be just months away.
Prime Minister Alexis Tsipras has pitched rescinding unpopular pension cuts slated for January, while both he and opposition leader Kyriakos Mitsotakis are promising lower taxes. The government will unveil draft numbers on Monday, and the plan is the first big test of how much fiscal sovereignty Greece has regained since exiting its aid program in August.
Tsipras says he can hit fiscal targets set down by the euro area and International Monetary Fund without the planned pension cuts. They were agreed after months of back and forth negotiations, and some creditors consider them a vital structural reform. That means the government risks creating the impression of backsliding now that Greece is out of the bailout.