NEWS

Government exploring ways to suspend pension cuts

TAGS: Economy, Society

The government is hoping that surpluses at the Single Social Security Entity (EFKA) will allow the non-implementation of pre-legislated pension cuts on January 1 next year.

With the latest forecasts suggesting that the EFKA surplus could reach 1.3 billion euros by the end of the year, Labor Minister Effie Achtsioglou told Skai TV on Monday she did not rule out that the measure may be suspended, saying that the government will examine the issue after August 20, when Greece leaves the bailout program.

She also noted that pension cuts were not necessary and were only voted through in Parliament due to the insistence of the International Monetary Fund, but she added that Athens will not spring any surprises or take “unilateral actions.”

However, Greece’s demographics, the aging of its population and its commitments to drastically reduce spending for pensions remain serious obstacles to the government’s plans.

Moreover, European officials have insisted that the pre-legislated package of reforms, including pension and tax reform as well as contingent countermeasures, must be implemented.

Furthermore, they also insist that apart from sustainable growth and regaining the confidence of markets, Greece must secure the viability of its social security system.

For his part, Euro Working Group chief Hans Vijlbrief told Greek media at the weekend that Greece will have a positive economic outlook provided that structural reforms continue, nonperforming loans are tackled and that the pre-legislated reform package is implemented. He said that reforms must not be rolled back but continued to ensure credibility and growth.

His remarks came on the heels of a recent visit to Athens by Commissioner Pierre Moscovisi, who, in reference to planned pension cuts, said that “commitments must be respected” but that “they are not rigid.” But Vijlbrief, when asked if there is any scope for flexibility on this matter in the EWG and Eurogroup, said the pre-legislated reforms were about safeguarding the credibility of the budget. “Anything else is self-defeating and Greece should not want to go down that road again,” he said.

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