Greece Suspends Legislative Package After Concerns From Creditors

Law aimed at mitigating effects of austerity won’t be voted on by lawmakers until after Christmas

The Wall Street Journal

By NEKTARIA STAMOULI and  VIKTORIA DENDRINOU

Dec. 17, 2015 11:53 a.m. ET

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ATHENS—Greece suspended a legislation package on Thursday with social benefits aimed at mitigating the effects of the financial crisis on the most vulnerable following concerns by the country’s international creditors, according to Greek government officials.

The government was hoping that the bill would sweeten the pill for the Greeks who have suffered the most from the successive waves of austerity and appease its lawmakers, who were forced to approve another round of unpopular economic measures on Dec. 15.

The bill, which the Greek government refers to as its “parallel program,” was submitted on Monday and was expected to be voted on by lawmakers next week. Instead, government officials said it would need to consult with the country’s international creditors—representing eurozone governments and the International Monetary Fund—before the measures can become law and that this won’t happen until after the Christmas break.

The draft bill included health care to uninsured citizens and migrants with legal papers, welfare work for unemployed people and free school meals.

It also extended a humanitarian crisis program that offered free electricity, food and housing to about 300,000 Greek citizens in 2015. The latter initiative was the first legislative act introduced by Greece’s Syriza-led government after winning power in January 2015, but was unpopular with its creditors, who considered it be a unilateral move.

Eurozone officials said the measures in the proposed bill hadn’t been agreed with the country’s creditors before being submitted and, in some cases, weren’t consistent with its bailout.

A big problem with the bill, eurozone officials said, was that the creditors only got a translated version of the proposed laws a day before they had to submit an assessment to eurozone finance ministry officials on whether Greece should receive the latest tranche of its loans.

Senior officials from eurozone finance ministries held a call on Thursday in which they provisionally signed off on the disbursement of €1 billion ($1.09 billion) in fresh loans for Greece. The disbursement was contingent on the country’s parliament voting through a set of economic overhauls, including the design of a privatization fund and reforms to the banking sector.

While Greek lawmakers approved the measures on Tuesday, the submission of the new bill threatened to hold back the planned aid disbursement.

The disbursement was approved in principle, a eurozone official said, adding that it would take place once the Greek government finalized the technical details of three economic overhauls in financial services and health care.

Write to Nektaria Stamouli at nektaria.stamouli@wsj.com and Viktoria Dendrinou at viktoria.dendrinou@wsj.com