Regling: Tsipras govt in clear-cut violation of procedures; risk of fiscal target not being met

13 June 2019
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Fulfilling terms it had agreed to with European creditors in 2018 is an absolutely necessary condition for further debt relief measures, ESM Managing Director Klaus Regling warned on Thursday, confirming the now frigid relations between the current, and outgoing, Tsipras government and the former.

In statements on the occasion of the presentation of the Eurozone emergency fund’s annual report, Regling expressed his displeasure over the fact that the leftist Tsipras government failed to consult with creditors prior to abolishing a pre-legislated reduction in the annual tax-free income tax threshold, which was set for implementation on Jan. 1, 2020.

Alexis Tsipras and his leftist government announced various modest tax breaks, bonuses and other spending measures just prior to European Parliament elections and after electoral defeats in the latter and local government races, viewed as a bid to shore up voter approval ratings. Nevertheless, Tsipras was forced to resign and request snap elections for July 7, with all mainstream opinion polls showing him and his SYRIZA badly trailing center-right New Democracy.

Just as ominously, Regling warned that Greece risked missing this year’s annual primary budget surplus target by a wide margin, due to the abruptly announced measures.

The powerful ESM chief also didn’t mince his words in saying that the action was a clear-cut violation of the procedure.

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