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Greek PM Tsipras wins confidence vote weeks before EU election

ATHENS (Reuters) - Greek Prime Minister Alexis Tsipras won a confidence vote on Friday, weeks before European Parliament elections that will be a first test of his government’s re-election chances in national polls this autumn.

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The leftist premier turned a censure motion against one of his ministers into a confidence vote this week. The final vote count showed 153 lawmakers backed the government in the 300-seat house. A total of 289 deputies voted.

Tsipras’ government, whose term ends in October, is trailing the conservative opposition in opinion polls. The EU vote on May 26 will be held in parallel with local elections.

Earlier this week the government announced a series of measures for 2019-2021 aimed at easing Greeks’ financial strains, including tax cuts and a permanent benefit for pensioners who had their incomes slashed during the country’s debt crisis that broke out a decade ago.

Greece emerged from its third international bailout in August last year and has been outperforming its fiscal targets, giving Tsipras leeway for handouts in an election year.

“The support measures which we are bringing and will very soon vote on are permanent, they are justice for the many, the vindication of their sacrifices ... the dawn of a new, a better day for our country,” Tsipras told lawmakers before the vote.

The country’s EU and International Monetary Fund creditors, who are monitoring Greece’s post-bailout economic progress, have yet to assess the impact of the measures.

Lenders’ representatives and government officials discussed Tsipras’ announcements during a post-bailout review this week and finance ministry officials said “the dialogue is ongoing”.

Athens has committed to primary budget surplus targets, excluding debt servicing, of 3.5% of annual economic output up to 2022.

The government expects its fiscal outperformance to reach 1.14 billion euros this year and estimates the cost of the pension benefits at 800 million euros.

It also announced the set-up of an escrow account, where 5.5 billion euros would be deposited in the coming days as a guarantee for the lenders that Athens will meet its targets and debt obligations in the three-year period.

According to EU officials, it has not yet been decided if setting aside cash is adequate as a guarantee. The issue may be discussed later in a meeting of euro zone finance ministers later this month or in June.

Reporting by George Georgiopoulos and Renee Maltezou; Editing by Frances Kerry