France, Germany joust over Greek Prime Minister's handout

A row over a pension handout by maverick Greek Prime Minister Alexis Tsipras on Thursday escalated into a full-blown joust over protracted austerity between EU heavyweights France and Germany. As Greece's parliament prepared to approve the one-off payment worth 617 million euros ($656 million), tension rose between Tsipras and a hard-line segment of Athens' creditors, including Eurogroup chief Jeroen Dijsselbloem.
Tsipras on Thursday said the situation had to be resolved "without blackmail" on the part of Greece's creditors. "I believe that we can have a breakthrough without blackmail and with respect of the sovereignty of each country," the leftist leader, who fought with his European peers to within an inch of taking Greece out of the euro last year, said as he arrived for an EU summit in Brussels.
France has uncharacteristically weighed into the debate in force, with President Francois Hollande insisting that Greece be "treated with dignity" in the ongoing dispute. A spokesman for Dijsselbloem on Wednesday said the eurozone was suspending a recently-announced debt relief scheme for Athens, in retaliation at not being fully briefed on Tsipras' handout plans - which also include lower sales tax for Greek islands tackling migration.
"The institutions have concluded that the actions of the Greek government appear to not be in line with our agreements," said the spokesman for Dijsselbloem, who heads the 19-nation eurozone which oversees Greece's massive 86-billion euro bailout. The dispute escalated within hours, with both French Finance Minister Michel Sapin and European economic affairs Pierre Moscovici - himself a former French finance minister - publicly distancing themselves from the decision.
"Individual statements are not the collective statements of the Eurogroup," said Sapin, noting the decision had not been taken unanimously by the 19-member club. For his part, Moscovici told AFP that in his view, Tsipras' pension handouts - which Athens says will come out of a 1.0-billion-euro tax surplus - do not violate the conditions under which the short-term debt relief was granted to Greece earlier this month.
The spat has brought to the fore widely diverging views in Berlin and Paris on the merits of long-term austerity. France has traditionally taken a far softer line on Greece than Germany during the years of negotiations over Athens' crippling debt and need for bailout funds. Both countries have elections next year, and mindful of populist rhetoric that is likely to boost the popularity of Eurosceptic and far-right parties.
Tsipras, who has his own troubles at home with his ratings in decline, has taken a stand on the principle of national sovereignty. "We are not a colony," his government spokesman said last week, when the handouts were first announced. And Tsipras himself on Wednesday said the creditors had to "respect the Greek people, who have made major sacrifices these past seven years in Europe's name". Ironically, Greek pensioner associations have rejected the one-time handout - worth at least 300 euros per person - as "peanuts".