EU seeks to calm budget row with Greece

Austerity-wracked Greece could strike a deal with its creditors by early next year, a senior EU official said Sunday, seeking to calm a recent row over surprise handouts announced by Athens.

European Commission vice-president Valdis Dombrovskis made the comments days after the EU suspended debt relief for bailed-out Greece after its maverick premier Alexis Tsipras hiked spending for pensioners, angering austerity champion Germany

"We think that with a constructive attitude on all sides, a technical level agreement will be found in the next few months," he told the Greek daily Kathimerini in an interview. In that perspective a second examination of Greece's budget plan "will be concluded by the start of 2017," he added.

Tsipras sparked a new row with its European creditors last week after announcing handouts including a surprise one-off payout to 1.6 million low-income pensioners and a sales tax break for islands sheltering thousands of migrants.