In a move likely to stun international creditors keeping debt-stricken Greece afloat, the prime minister, Antonis Samaras, has stepped up his electoral campaign with a promise to ease the austerity policies demanded in exchange for financial aid, two weeks before crucial snap elections.
Unveiling a “roadmap” of measures for a “post-bailout Greece”, the leader pledged he would restrict spending cuts and reforms that have seen the popularity of the main opposition radical left Syriza party soar.
“I personally guarantee there will be no more pension or wage cuts,” he told his centre-right party members in Athens at the weekend as electioneering intensified ahead of the vote on 25 January.
“The next breakthrough in our growth plan includes tax cuts across the board which can happen gradually, step by step.”
Both pension reform and streamlining of the profligate public sector have been set as conditions for the future financial assistance Athens so desperately needs from the European Union and International Monetary Fund.
Failure to agree on the painful measures, nearly five years after its near-economic collapse, has prevented Greece concluding talks with lenders consenting to provide bailout funds only until the end of February.
With a workforce of 2.7 million paying for retirees of roughly the same number, creditors have insisted that pensions be pared back. The demand has been the centrepiece of Athens receiving a new “precautionary credit line” when its €240bn financial assistance programme runs out. It is also a condition of any future talks over the rescheduling of Greek debt, at 177% of GDP not only the largest in the EU but by far the biggest drain on the economy.
In a country in which living standards have plummeted, the prospect of pensions being cut further has shocked Greeks. But even though much of New Democracy’s electoral base is of pension age, Samaras’ pledge alarmed conservatives keen to see reform.
The Euro MP Giorgos Kyrtsos, who has witnessed the impatience that Athens’ actions are prone to evoke in Brussels, ignited an intra-party row by retorting that pension cuts were not only necessary but vital to keeping Greece afloat.
“If there was no need for additional measures, we would have satisfied creditors and completed talks already,” he quipped.
Stefanos Manos, who served as finance minister under New Democracy in the early 1990s, described Samaras’ pledges as nonsensical.
“They are the proposals of a loser, of someone who knows that he will not be dealing with creditors,” he said. “You cannot reduce taxes, for example, unless you reduce spending and he doesn’t say how he will reduce spending. As put, they are unworkable and nonsensical.”
Most Greeks are exhausted by the relentless cutbacks demanded by international creditors and with unemployment at more than 25% – and over 50% among youth – “end-of-austerity” promises have fallen on eager ears.
Stepping up his own campaign, Syriza’s leader, Alexis Tsipras, announced on Sunday that his party was seeking “a clear mandate” that would allow it to renegotiate the tough conditions attached to financial assistance.
Latest polls show that while the radical leftists are leading by between 3 to 5 percentage points, they are still unlikely to win an outright majority in the 300-seat parliament.
“We are asking the Greek people to give us a strong mandate so that the memorandum [bailout accord] won’t become a permanent status quo [causing] social catastrophe for the country,” he told Real News. “So that the commitments [agreed by] today’s government are not enforced … and so that there won’t be a new memorandum of austerity.”
Earlier, the leader had told supporters that Greece was fated to become a “colony” without a future if the cost-cutting policies imposed by the bailout terms continued unabated.
But as the election draws ever closer so, too, does the criticism of leaders across the board.
“Much of the rhetoric we are hearing is based on the assumption that the Greek people are idiots,” fumed Manos. “Both Samaras and Tsipras are leading us to disaster. The only difference is that Syriza will do it faster.
“Creditors have every right to be angry with Greece because, again and again, they have been tricked. They are dealing with a country that says it will pursue reform and then fails, repeatedly, to deliver.”