Greek PM rejects EU criticism of pre-vote benefits

Greek Prime Minister Alexis Tsipras on Thursday rejected EU criticism of tax cuts announced ahead of next month’s election, warning voters that austerity could return if he loses.

The leftist PM lashed out at “extreme conservative circles in Brussels seeking to cast doubt on our government policies and raise objections to our plans.”

He said there were renewed EU calls for civil service layoffs, a measure which he said had not been raised since 2014.

Fighting to avert a looming defeat in July 7 polls, Tsipras last month announced cuts to food and energy tax and an additional pension payment in a move widely seen as a rating boost bid.

On Friday he is expected to bring an additional income tax break to be approved in parliament.

Trailing the New Democracy conservative party in the polls after losing May’s European parliament ballot and last week’s local elections, Tsipras on Thursday warned there was still a “danger of returning to the dark days… of harsh austerity.”

On Wednesday, European Commission vice president Valdis Dombrovskis warned that the benefits package announced by Tsipras ahead of the July 7 election “is costly and does not go in the right policy direction.”

“It undoes some elements of important past programme reforms. And these new measures pose a risk to the achievement of the agreed primary surplus target of 3.5 percent of (output) in 2019 and beyond,” Dombrovskis said, adding: “The reform momentum has slowed in recent months.”

The Greek finance ministry has insisted that the economy will overshoot expectation — as it has successively done in recent years — and there is enough fiscal space to allow for the support measures.

Election frontrunner Kyriakos Mitsotakis, head of the conservative New Democracy party, this week accused Tsipras of seeking to push an “orgy of campaign perks” through parliament.