Greece to Distribute €1.4 billion to Citizens

Source: reuters.com

Greece will distribute 1.4 billion euros ($1.63 billion) as a social dividend to pensioners and others hit hard by the country¡¯s austerity programs, Prime Minister Alexis Tsipras said on Monday.

The money is available because the country has beaten its 2017 bailout target for a primary surplus - which excludes debt servicing costs - of 1.75 percent of gross economic output, he said.

Tsipras came to power in 2015 promising to end austerity but was later forced to sign up to a new EU bailout, the country¡¯s third, in exchange for more belt-tightening to keep Greece in the euro zone. 

He was re-elected and his term ends in late 2019.

His leftist-led government hopes that after seven years of crisis, Greece¡¯s fiscal performance will help it emerge from EU bailouts in August 2018, when its current rescue package ends.

¡°For a second year, we are in a position to distribute a social dividend to the people who need it the most. Better prepared and more effective this year, we will be able to pay out an even bigger amount,¡± he said in a televised statement.

Last year, Tsipras unexpectedly announced that the state would pay out about 600 million euros to low-income pensioners, a move that angered the country¡¯s international lenders.

This year¡¯s handouts have been approved in principle by the lenders, who are reviewing Greece¡¯s bailout progress. 

Their representatives are expected in Athens this month to resume talks on fiscal targets and on reforms.

¡°We (the institutions) have been discussing these ideas with the Greek authorities. The announcements seem broadly in line with these discussions, which have not been concluded yet,¡± an EU Commission spokesman said, adding that the proposals would be examined by the lenders.

Tsipras said about 720 million euros would be distributed by mid-December to 3.4 million Greeks as a one-off, tax-free benefit, based on income and wealth criteria and household size. The country¡¯s population is about 11 million.

Another 315 million euros would be directed to pensioners, he said, to compensate them for ¡°unfair¡± health contribution payments in 2012-2016, while 360 million euros would be paid to Greece¡¯s biggest power utility, Public Power Corporation (DEHr.AT), to prevent electricity tariff increases.