Greece sits between EU / IMF spat

A Christmas bonus for pensioners has created a new flash-point between Greece and its creditors...

Greece sits between EU / IMF spat

Yorgos Karahalis AP/Press Association Images

European Commissioner for Economic and Financial Affairs Pierre Moscovici has hit back at the IMF following its criticisms of the EU's approach to implementing economic reforms in Greece.

"In this era of ‘post-truth’ politics, it is more important than ever not to let certain claims go unchallenged," he said in a letter sent to The Financial Times.

This comes as the IMF has criticised the EU's terms of Greece's bailout - which requires the state to pursue a primary surplus target of 3.5%.

Anti-austerity protesters in Greece / PA

The IMF says that chasing this target will result in further austerity measures and damage the Greek economy. It believes that a primary surplus closer to 1.5% is more realistic.

Mr Moscovici has said that demands should, "not overestimate Greece’s ability to meet them without undermining growth [...] but nor should they be based on deliberately pessimistic projections, or tied to demands that are politically impossible, economically undesirable and socially unacceptable."

"The political leaders of the eurozone and of Greece’s creditor institutions must now take the initiative [...] We need all partners on board, taking a shared responsibility in achieving this," he added.

The IMF is not due to take part in Greece's current bailout.

"If Greece agrees with its European partners on ambitious fiscal targets, don’t criticise the IMF for being the ones insisting on austerity when we ask to see the measures required to make such targets credible," a IMF blog-post on the issue of Greek austerity stated on Monday.

Christmas in Athens...

The European Stability Mechanism (ESM) announced yesterday that it has suspended its short-term debt-relief plan for Greece after the government agreed to give 1.6 million pensioners who are living on less than €800 a month a Christmas bonus.

A spokesperson for Eurogroup leader Jeroen Dijsselbloem said that the decision appeared "to not be in line with our agreements."

The Greek Prime Minister Alexis Tsipras is now planning a vote in the Greek parliament to sanction the €617m festive pay-out.