BUSINESS

Court rulings could set off fiscal bomb

EIRINI CHRYSOLORA, ROULA SALOUROU

The Council of State will soon rule on the cuts to pensions, salaries and bonuses.

TAGS: Finance

The government and its creditors can hear a fiscal bomb ticking, as estimates put the impact of possible court decisions on retroactive compensation for cuts to the incomes of civil servants and pensioners at as much as 29 billion euros.

The creditors have asked the government to explain its contingency plans during next week’s visit by their inspectors.

A senior Finance Ministry source said yesterday that Alternate Minister Giorgos Houliarakis and Labor Minister Effie Achtsioglou have drafted a study on the fiscal impact and a plan to cover the cost.

The payment of the sum due could be made over a long period, the same source explained, adding that this fiscal burden will be extraordinary and not permanent.

On the issue of the civil servants’ abolished holiday bonuses, the same source said that if the Council of State rules they are also to be returned, the government could table a bill to tackle the matter.

In fact, if the courts rule in favor of returning the amounts cut from salaries, bonuses and pensions, the cost will be prohibitive for the government per the studies the competent ministries have drafted, even if they were to be repaid gradually.

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