BUSINESS

Retroactive dues to cost €1.27 billion

EIRINI CHRYSOLORA

TAGS: Finance

The government wanted to tackle the issue of retroactive dues to pensioners for good, avoiding mass court cases in the future and clearing the fiscal horizon of dangerous uncertainties, so on Wednesday it announced payouts to pensioners for their main pensions, in accordance with the verdict of the Council of State.

Those uncertainties would have affected the sensitive matter of the public debt, Finance Ministry sources say, reintroducing the issue of its sustainability, which would drive borrowing rates higher.

The government is hoping the issue of retroactive dues will be closed at the far from negligible cost to the 2020 budget of 1.27 billion euros – but that is much smaller compared to the total cost of €4 billion that it would have to pay if all pensioners (both those who took their case to court and those who did not) were covered not only for their main pensions but also their auxiliary pensions and holiday bonuses, according to estimates by the State General Accounting Office.

That €1.27 billion is the net sum of the burden on the budget after taxes and contributions are deducted from the €1.4 billion due.

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