The government claims it is determined not to back down on two of its key policy proposals, to increase social security contributions by at least 2 percentage points and to grant all retirees a basic state basion regardless of income.
Over the course of next week the government is expected to submit its definitive proposals to the creditor representatives, who have not yet received any information on the Greek proposals regarding the social security reforms, according to the European Commission head of mission, Declan Costello.
The creditors are clearly opposed to a hike in contributions and insisting on the introduction of income criteria when it comes to deciding who receives a state pension. They also want benefits to be more closely related to contributions, to generate stronger incentives for staying in the labor market.
With everything in flux within the two coalition partners and in the technical negotiations between the government and its creditors, Athens is under strong pressure to have the reform of the pension system completed before Christmas. The aim is for a “mild” social security bill to be submitted in Parliament, without any cuts to main pensions, and an emphasis on changes to the structure of the new system.