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Handelsblatt: Tsipras govt may face 'sanctions' by European creditors over abruptly announced relief measures

Featured Handelsblatt: Tsipras govt may face 'sanctions' by European creditors over abruptly announced relief measures
Handelsblatt on Wednesday cited "heightened opposition" on the part of institutional creditors to an abruptly announced "relief" package by Greek Prime Minister Alexis Tsipras last week, less than a month before his poll-trailing SYRIZA party faces its first elections since September 2015.

Coming on the heels of the very public rebukes of the measures by the Fitch ratings agency and a report by the OECD this week, the Handelsblatt article refers to the possibility of "sanctions" against Athens after the May 26 European Parliament election.

Tsipras appeared live during a hastily staged press conference early last week to announce a modest roll back of VAT rates and the partial restoration of an extra "13th-month" pension bonus, capped at a maximum 500 euros.
European creditors were reportedly not briefed over the measures, with the first reactions expressing concerns that the hard left Greek government is flirting with failure to meet agreed to annual fiscal targets.

The opposition reaction in Greece was shrill, directly accusing Tsipras of trying to "bribe" mostly low-income and economically inactive voters with pre-election giveaways in exchange for their vote in the Europarliament election and local government races. SYRIZA's candidates in municipal and regional government election fare even worse in opinion polls.

"Tsipras passed the measures through Parliament last week. They took effect on Monday, just in time for the European election. The vote on Sunday is considered as a crucial test for the national election, which must come no later than October," Handelsblatt notes, while adding:

"SYRIZA is trailing New Democracy party in the opinion polls. Tsipras wants to improve his chances with campaign gifts, which however, burden the state budget with four billion euros (annually) from now on ... the threat of a fiscal derailment now worries the markets," the German financial daily underlines.