Decision on pensions expected in November, EU official says

Decision on pensions expected in November, EU official says

The decision on whether or not to implement a further round of pension cuts scheduled to come into effect in January will probably taken at an emergency summit of eurozone finance ministers next month, a high-ranking European official has said. 

According to the official, the Greek pension issue is likely to be tackled at a Eurogroup meeting about eurozone reform to be held in November.

The two key priorities for eurozone member states is that the primary surplus target of 3.5 percent of gross domestic product is not undermined and that the Greek government's reform plans include growth-oriented measures.

Greece's Alternate Finance Minister Giorgos Houliarakis told a Euro Working Group meeting on Friday that a decision on the pension cuts and on the "fiscal space" that will be available for growth-focused measures to be enforced must be taken by the end of the November as Greece's final budget must be approved in Parliament in early December.

At the moment there appears to be a divergence of about 0.4 percent between the estimates of the European Commission and the Greek government as regards the size of the primary surplus in the event that cuts to pensions are not carried out and certain tax cuts and benefits pledged by the government are offered.

Technical teams are currently calculating the precise impact of those combined measures.

Meanwhile, the European official appeared to suggest that the projected primary surplus will probably not be adequate to allow for both the pension measure to be suspended and the government's promised handouts to be offered.

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