EU wary on budget impact of Greece's new benefits, tax cuts

EU wary on budget impact of Greece's new benefits, tax cuts


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ATHENS, Greece (AP) — The European Commission has voiced concern at the impact new benefits and sales tax cuts will have on Greece's austerity commitments.

Athens has promised bailout creditors high budget surpluses for years to come, so it can continue servicing its debts.

But the commission said Wednesday the left-wing government's relief measures set the budget targets at risk.

Greek officials insisted that the targets were realistic.

The commission report also said newly-adopted extra pension payments will increase Greece's pension expenditure — the European Union's highest — and divert welfare funds away from young, working-age Greeks.

Prime Minister Alexis Tsipras announced the benefits and sales tax reductions shortly before last month's European Parliament elections — where his party suffered a heavy defeat that forced him to call an early election on July 7.

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