BUSINESS

Verdicts over pension cuts carry high cost

ROULA SALOUROU

TAGS: Finance

The recent court decisions vindicating pensioners over the cuts they sustained under the second bailout program, and the upcoming verdict of the Council of State over the Katrougalos law are causing serious turmoil in the political system, as they may not only upset this year’s budget but also those of the years to come, along with sinking the country’s social security system.

Experts estimate that the cost of the cuts deemed to have been in violation the Constitution comes to about 4 billion euros a year. The representatives of the country’s creditors believe that the application of the CoS’s decision – if it is against the cuts introduced by former labor minister Giorgos Katrougalos – will concern 2 percent of annual gross domestic product, while government estimates put it higher at over 4.5 billion euros per year.

In total, the potential return of the amounts cut since July 2015 (after the the CoS delivered its first verdict) to the present is seen as costing from 9 billion euros upward to 12 billion, a sum public finances simply cannot afford.

The issue is not only financial and legal but also political and will not take any “easy” solutions by this or the next government, that will likely shoulder it.

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