Lawmakers in the European Parliament have sharply condemned the latest Greek bailout deal - reached after weeks of negotiations - which they say will lead to "Social Armageddon" and "too high a price to pay." As SputnikNews reports, heated exchanges over the state of play of the Greek macro-economic adjustment program were seen in the European Parliament this week, and divisions are also very evident within the Troika itself as obvious need for debt relief (IMF) is scuttled by Germany and the Eurogroup.
On Monday (May 9th), The Eurogroup, Monday (May 9), agreed the latest package of measures for Greece to implement as part of the latest bailout deal.
Controversially, it included cuts of 3% of GDP by 2018, including pension and personal income tax reform as well as VAT reform and public sector wage bill measures.
However, there was disagreement within the Troika of creditors — the European Commission, the European Central Bank, (ECB) and the International Monetary Fund (IMF) — over extra reforms demanded by the IMF that could amount to another US$4 billion in cuts by Greece, over and above what it has already promised.
In heated exchanges over the state of play of the Greek macro-economic adjustment program, the center-left parties - the Socialists & Democrats (S&D), European United Left (GUE) and the Greens/European Free Alliance - as well as European Conservatives & Reformists (ECR) warned Greece's creditors and the IMF not to impose more reforms on the country and called for debt relief.
EPP leader Manfred WEBER (DE) criticised Prime Minister Tsipras. Referring to the 0.7% growth figure in 2014, he blamed the Tsipras government for slipping below zero growth in 2015 and "harming the country". He took Ireland as an example of a programme country that recovered as a result of reforms.
S&D leader Gianni PITTELLA (IT) said that the problem is not Athens, but the IMF with its policy of preventive austerity. "If they continue to sabotage an agreement, we have to go it alone", he said.
ECR's Notis MARIAS labelled the Greek programme as "violent and leading to a social Armageddon".
ALDE's Sylvie GOULARD (FR) said too many issues are being pushed toward 2018 because of the UK’s EU referendum and elections in other countries and that it bears the risk of losing control over the adjustment programmes.
GUE's Dimitrios PAPADIMOULIS criticised EPP leader Manfred Weber for his attack on Mr Tsipras: "He did not create the Greek debt. The Greek people voted for him and want to keep him as their Prime Minister."
Green leader Philippe LAMBERTS (BE) said he did not share the optimism after yesterday's euro group meeting on Greece: "The austerity of its creditors and the IMF is socially unacceptable. That's too high a price to pay."
Steven WOOLFE (EFDD, UK) blamed the Eurogroup and the IMF for high unemployment and suicide rates in Greece and encouraged the Greeks "to leave the EU like the UK will do on 23 June."
Marcel DE GRAAFF (ENF, NL) said Greece is bankrupt and urged "to close the tap, to scrap the euro and return to the drachma”.
Divisions within the Troika were revealed, as SputnikNews reports, in a leaked letter from IMF chief Christine Lagarde, who said:
"We do not believe it will be possible to reach a 3.5% of GDP primary surplus [in 2018] by relying on hiking already high taxes levied on a narrow base, cutting excessively discretionary spending and counting on one-off measures as has been proposed in recent weeks."
The IMF is calling for debt relief - the writing-off of part of Greece's debt, or 'haircut' in order for Athens to be able to sustain its reforms.
However, in a statement, its Troika partners said: "The Eurogroup reconfirms that nominal haircuts are excluded."
The latest measures agreed by parliament include reducing pension spending by about two percentage points to around 15 percent of GDP by 2019; setting social security contributions at 20 percent of employees' net monthly income — with 13.3 percent coming from employers and 6.7 percent from employees; and lowering the income tax-free threshold, or personal allowance, to an average of around US$10,000 a year from around US$10,800 and making income bands narrower.
Prepare for another 'hot' summer in Athens as already evidenced this week...
There were mass strikes and demonstrations over the weekend (May 7/8) across the whole of Greece as many public service unions took actions in protest at the Greek Parliament bringing forward a vote on the new bailout package, finally agreeing the new measures on Sunday evening.