ATHENS (Reuters) - Greek lawmakers on Wednesday approved tax breaks and bonuses for pensioners in the crisis-hit nation, days before elections, rowing back on some austerity mandated by international bailouts.
The package brought by the left-wing Syriza administration includes an annual payment for 2.5 million pensioners, a reduction in a sales tax on basic foodstuffs and a cut in tax rates on electricity and gas bills.
The government has said the measures will not jeopardise fiscal targets.
“After eight years of sacrifice a new era dawns, vindicating those difficult concessions made by the people of Greece,” Prime Minister Alexis Tsipras told parliament before the vote.
“Come Monday, a household’s basket will be fuller,” he said.
Greece, which required three international bailouts between 2010 and 2015 to stave off bankruptcy, emerged last August from economic adjustment programmes overseen by its lenders.
It still needs to meet fiscal targets, including a primary budget surplus, which excludes interest payments on its debt, of 3.5 percent of annual economic output up to 2022. Tsipras has said the handouts will not dislodge that target.
Opposition parties have branded them a crude move by the leftist government to shore up its sagging popularity before local and European elections on May 26.
“Your effort is not serious. It’s just an attempt to stay politically afloat,” said lawmaker Nikos Dendias of the opposition New Democracy party, which is leading opinion polls.
The bill includes a permanent yearly bonus for pensioners, whose incomes were slashed 13 times from 2010 to 2017. It also introduces staggered payments for dues to the state.
Value-added tax on restaurant bills as well as on basic foostuffs from stock cubes and pasta to grain will drop to 13 from 24 percent.
The annual cost of the measures is estimated at about 1 billion euros. Greek central bank governor Yannis Stournaras said on Wednesday the country may achieve its fiscal target this year but may not outperform it.
Tsipras’s term ends in October and he is seeking re-election. European Parliament elections will be held in parallel with municipal and regional elections on May 26.
“Tsipras is just tossing a pre-election bone at us on the off chance that he might win the elections. It’s a farce,” said 80-year-old pensioner Nicolaou Panagiotou.
He said the elderly had been particularly hurt by the crisis. With unemployment hovering around 18 percent, many pensioners are supporting their families with pared-back incomes.
Additional reporting by Angeliki Koutantou; Writing by Michele Kambas; Editing by Mark Heinrich and Gareth Jones