ECONOMY

Tsakalotos: No more pension cuts

tsakalotos-no-more-pension-cuts

The government cannot cut pensions any further, Finance Minister Euclid Tsakalotos told the country’s creditors in response to the pressure exerted mainly by the International Monetary Fund in the context of the reform of the social security system, while Athens and the Fund have canceled their bailout agreement that was set to expire.

Tsakalotos stated that the IMF is putting great pressure on the government without any social sensitivity and in a way that makes no financial sense, adding that this pressure for new measures goes beyond the deal reached last summer.

Speaking at the “BBC World Questions: Europe and Greece” event in Athens, the minister noted that the Greek economy’s problems are related to public administration, corruption and tax evasion. He went on to warn that the country’s survival depends on combating tax evasion.

Meanwhile the government and the IMF have canceled the second agreement for the country’s financial support following a request by the Greek side. Tsakalotos’s associates said that the decision to that effect was made jointly by Athens and the Fund so that Greece does not have to pay the administrative fees provided by the agreement for this year. The agreement would have ended on March 31 anyway, while the government has asked the IMF to agree to a new program, with the negotiations still ongoing.

The agreement cancellation request was submitted by the Greek government at the start of this year and was approved by the Fund. The program, officially titled Extended Fund Facility (EFF), started on March 15, 2012, but as of April 2014 it was practically inactive, following the approval of the last IMF installment to Greece. Since then the IMF has not issued any money to Greece as the country had not managed to complete a bailout review successfully. The installments that the eurozone paid out to Athens last summer were not part of the second bailout but of the new, third bailout.

Greece has repaid 23.3 billion euros to the IMF since 2013, and will keep making payments until February 1, 2031, when the last installment is due.