ECONOMY

State fretting over ‘mother of all trials’

state-fretting-over-mother-of-all-trials

A key political trial concerning retroactive claims by 2.5 million pensioners begins at the Council of State on Friday. Moderate estimates say that unless their case is rejected, the state faces a bill of up to more than 26 billion euros. Experts are calling it the mother of all court battles, which is of particular judicial as well as fiscal interest.

According to a document by the Labor Ministry’s General Directorate of Financial Services that the Single Social Security Entity (EFKA) cites, the claims concerning main and auxiliary pensions for the period from January 2013 to June 2015 add up to 10.69 billion euros, those from June 2015 to May 2016 come to 3.98 billion and claims from the enactment of the Katrougalos law in May 2016 until end-2018 reach up to 11.58 billion euros. Such a sum could easily land the Greek state’s finances right back in trouble.

On the one side of the courtroom will be the pensioners of the OTE telecom union, whom the case directly concerns, plus 17 individuals and representatives of pensioners associations, while on the other side will be EFKA with the auxiliary social security fund (ETEAEP) and the state through the State Legal Council.

In a written intervention to the country’s highest administrative court, the Greek state has argued that it has an increased interest in the case, as the verdict could inflict “major financial damage” on it if it goes against its interests.

The case is based on the Council of State’s October 4, 2019 decision that deemed the Katrougalos law’s recalculation of main pensions based on the amounts paid out by December 31, 2014, as unconstitutional. EFKA argues that the verdict means the 2012 cuts have indirectly been deemed constitutional, and that the Katrougalos law provision was considered unconstitutional for technical and economic reasons.

For their part, the pensioners, as their lawyer Loukas Apostolidis tells Kathimerini, argue that the Katrougalos law cannot cancel any claims irrevocably provided for by two Council of State decisions in 2015.

The legal battle that begins on Friday is expected to be concluded by the summer. The CoS plenary consists of 31 councilors, as the pensioners’ demand for a broader composition has been rejected.