Greece hopes to conclude its second review by early January at the latest but it remains at odds with its European and International Monetary Fund lenders over fiscal targets and labour and energy reforms.
The decision to help poor pensioners “has complicated things”, implying that the second review is going to be delayed, dashing Greek hopes for the county’s inclusion in the European Central Bank’s quantitative easing programme in the first quarter of next year.
Greek pensioners have been promised a one-off winter payment totalling 617 million euros to the country’s 1.6m low-income pensioners as emergency support.
It was recently announced that 1.2m Greek pensioners live below the poverty line.
Michel Reijns, spokesman to Eurogroup chief Jeroen Dijsselbloem, said in a statement: “The institutions have concluded that the actions of the Greek government appear to not be in line with the agreements.”
They also called for more austerity measures to be put in place, including more severe labour and reform measures, which called for lifting restrictions on collective dismissals in the private sector, suspending collective bargaining and weakening trade union laws.
In a joint blog post Mr Obstfeld and Mr Thomsen wrote: ”We think that these cuts have already gone too far, but the ESM program assumes even more of them.
”We do not believe that Greece can come close to sustaining even a modest primary surplus and realise its ambitious long-term growth target without a radical restructuring of the public sector.”