Greek Prime Minister Alexis Tsipras said on Thursday his government would spend 617 million euros in one-off benefits for low-income pensioners ahead of Christmas, after Greece exceeded its 2016 primary surplus target.
Despite pre-election promises to end austerity, Tsipras signed up to a new international bailout, the country's third, in July last year. He was re-elected a few months later, on a mandate to protect labour rights and the incomes of the poor.
"Steady to our commitment to support the weak, we decided to immediately distribute most of our outperformance in 2016 revenues to low-income pensioners," he said in a televised statement.
He said the measure would provide support to 1.6 million pensioners who earn pensions below 850 euros a month.
Pensioners support many squeezed households in a country where unemployment still stands at 23 percent. Pensions have been reduced by about a third since the crisis began in 2009.
Greece estimates this year's primary surplus reached 1.1 percent of economic output, topping a bailout target of 0.5 percent. It projects a 2 percent of GDP primary surplus - excluding debt servicing costs - next year.
Tsipras added that a value added tax increase would not be implemented in the islands of the Northern Aegean where thousands of migrants arrived during Europe's migrant crisis.
"Greece, through its people's sacrifices, has carried and still carries the weight of Europe on the migration and on the financial crisis front," he said. "It's time for Europe to recognise this in practice."
Tsipras welcomed a decision by euro zone finance ministers to provide Greece short-term debt relief and said Athens still aimed at concluding a key bailout review as soon as possible but without making concessions on "irrational demands".
The leftist-led government, whose popularity has been dropping for months, is still at odds with Greece's lenders over labour reforms and a projected fiscal gap in 2018.
Athens wants to wrap up the review quickly to qualify for inclusion in the European Central Bank's bond-buying programme and regain market access. But a rift between the EU and the International Monetary Fund over Greece's fiscal targets beyond 2018, when its programme ends, has clouded its hopes.
Meanwhile, thousands of Greek trade unionists demonstrated against planned new cuts demanded by international creditors in a general strike that shut down several key sectors.
According to police, some 15,000 people took part in separate union protests in Athens and another 5,000 in Thessaloniki.
Civil servants, bank staff, merchant seamen, railway workers and state-employed doctors were among professionals taking part in the 24-hour stoppage against the measures, which are scheduled to be approved by lawmakers at the weekend.
The country's international creditors — fellow EU states and the International Monetary Fund — want Greece to overhaul its labour legislation to make crippling strikes less likely while also facilitating layoffs.