Cash-strapped Greeks are receiving an early on Christmas present.
Greece will distribute more than €1 billion ($1.2 billion) in surplus government cash to households and pensioners that have been strike by austerity, according to Prime Minister Alexis Tsipras. Another €360 million ($422 million) will go to the Public Ability Corporation to help make sure that energy rates don’t rise in 2018.
The “social dividend” payments, which will be made in December, are possible thanks to the country’s bigger than expected budget savings.
Under rules collection by its lenders, Greece must keep a spending budget surplus of at least 1.75%. But economists expect the surplus to reach 3% this year thanks to higher taxes revenues and extra spending cuts.
Tsipras was initially elected on the promise of ending years of rough austerity prescribed by europe and the International Monetary Fund. Both groups own lent Greece over €300 billion ($350 billion) to prevent it from defaulting on its debts and dropping from the euro. In return, they asked for deep spending cuts and taxes rises.
Tsipras was forced to agree to even more drastic actions so as to secure a third bailout in 2015.
Greece is apparently sticking to the plan, and the economy keeps growing again after years of recession. The European Commission expects the Greek overall economy to extend by 1.6% this season and by 2.5% in both 2018 and 2019.
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Tsipras said that €720 million ($845 million) might come to be distributed to roughly 3.4 million smaller and middle class families. The tax free payments will vary based on the size and salary of families.
Another €315 million ($370 million) will be given to pensioners in the type of rebates for health care payments.
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Tsipras angered Greece’s international lenders last year when he announced a €600 million ($704 million) bonus offer for the country’s pensioners.
The groups look like on board these times. A European Commission spokesperson said this year’s payments appear “to get broadly in brand” with discussions between the creditors and Tsipras’ authorities.