BUSINESS

Trying to soften the new blow to pensioners

ROULA SALOUROU

TAGS: Finance, Politics

The government – and particularly the Labor Ministry – is in search of a new social package, as beyond its rhetoric about a “clean exit” from the program it appears that Athens won’t be able to win any substantial concessions in the post-bailout period that could offset the reduction of pensions in 2019 and of the income tax discount as of 2020 – if not earlier.

Developments in the negotiations with the eurozone and the International Monetary Fund seem to banish any prospect for the lightening of the load on the social groups that have suffered the most in the last eight years of austerity cuts. Although the prime minister himself has asked for the clause reducing pensions further from next January to be frozen, the response of the creditors (both the eurozone and the IMF) is always the same: That is not possible.

After all, if one deducts the one-off measures from the record primary surplus of 2017, then it is on the reduction of expenditure related to salaries and pensions in 2018 that efforts to achieve a primary surplus of 3.5 percent of gross domestic product will be focused.

The pensioners who will suffer the most from the new cuts in eight months’ time are those the government is now exploring ways to support, by seeking in its negotiations with the creditors either the introduction of some offsetting measures or even the containment of reductions.
 

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