Greek prime minister Alexis Tsipras made an unscheduled television appearance on Monday night to announce a €1.4bn “social dividend” to be paid next month to more than 3m Greeks who have been hit hardest by the country’s seven-year recession.
The handout was approved by the country’s bailout creditors, the EU and International Monetary Fund, in a teleconference earlier in the day. It amounted to more than double a similar payment of €617m made last year without prior agreement with the creditors, prompting a clash with the left-wing Syriza government.
The premier said this year’s fiscal performance “exceeded our most optimistic forecasts with the primary budget surplus (before payments on the public debt) set to beat the target of 1.75 per cent of gross domestic product by a large margin.”
The primary surplus for 2017 could reach an unprecedented 3 per cent of GDP thanks to higher-than-forecast revenues from social security contributions and tax revenues, according to analysts in Athens.
The handout would include €720m in one-off payments for low-income Greeks and €315m in rebates for earlier cuts in healthcare payments, Mr Tsipras said.
The Greek state energy company, PPC, would receive €315m to cover electricity subsidies for impoverished households.
Euclid Tsakalotos, the finance minister, said another €800m from the surplus would be set aside as a cash buffer.
Efforts to reduce tax evasion contributed to the additional surplus. The independent revenue agency set up in January had raised €400m through a programme for voluntary disclosure of funds held abroad by tax evaders.
“We’ve had a double victory this year, ” Mr Tsakalotos told the FT. “We’re finally cracking down on tax evasion and the benefits from this are going to the people who need it most.”
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