In a large mixing bowl, beat the softened butter and granulated sugar together until the mixture is light and fluffy. This usually takes about 2 to 3 minutes using an electric mixer. Add the egg and vanilla extract, beating until well combined.
Whisk together the flour, baking powder, and salt in a separate bowl. Gradually add the dry ingredients to the butter mixture, mixing on low speed until a soft dough forms. Do not overmix, as this can make the cookies tough.
Divide the dough in half and roll it out between two sheets of parchment paper to about 1/4-inch thickness. Use a round scalloped or plain cookie cutter to cut circles, then use a smaller round cutter to remove the center of each circle, creating a wreath shape. Chill the cut-out dough in the fridge for 20 minutes.
Preheat your oven to 350°F (175°C). Place the chilled wreaths on a baking sheet lined with parchment paper. Bake for 8 to 10 minutes, or until the edges are just barely golden. Let the cookies cool completely on a wire rack before decorating.
In a clean bowl, whisk the powdered sugar, meringue powder, and 6 tablespoons of warm water. Beat on high speed until the icing forms stiff peaks. If it is too thick, add water one teaspoon at a time. Divide the icing and tint the majority green and a small portion red.
Pipe a green border around the edge of the cookie and then fill it in (flood) with slightly thinned green icing. While the icing is wet, you can use a toothpick to create leaf textures. Once the green layer has set for a few minutes, pipe small red dots for berries or a small red bow. Let the icing dry completely for at least 4-6 hours.