The government expects to pay off overdue pensions totaling about 500 million euros over the next 12 months, as its new target is to have covered all of the state’s outstanding obligations in the third quarter of 2021.
The pledge to the country’s creditors was that its overdue arrears would be paid off by mid-2021. It had even estimated that only a small part of pensions would be left pending after the end of this year, which would be paid off by end-June 2021.
However, things developed quite differently, with government officials blaming the pandemic, and the head of the European Stability Mechanism, Klaus Regling, expressing concern about the delay: He told Monday’s Eurogroup there have been failures and called on the government to tackle the matter immediately.
The draft budget includes detailed figures on the course of expired dues, showing they amounted to 1.709 billion euros at end-July, against €1.329 in December 2019.
Especially as regards outstanding pension applications, the draft budget says the delays are due to the pandemic, which has kept staff at home, as well as the considerable increase in the number of applications since the start of the year.
To deal with the issue, the government has introduced online pension applications, through the Atlas platform, and has raised the amount of the temporary pension, which reduces the sum of overdue arrears. This way, the officials note, the workload will be reduced as staff will now be able to focus on the processing of older applications.
Sources say the issue was also discussed at the staff level with the creditors’ representatives, who have been in Greece ahead of the process for the eighth assessment of the Greek economy, starting on October 19.
The government has promised to publish a new timetable regarding the payment of dues for the creditors by end-October, and it appears it will include a September 2021 deadline, per its current estimates.
Finance Ministry sources say that the state paid off all of the expired healthcare dues of the Single Social Security Entity (EFKA) last month, amounting to €140 million. Those of auxiliary pension fund ETEAEP have also been reduced, so that only €200-300 million will be left from the other entities for next year.