ECONOMY

Pensioners get hikes of up to 3.5 percent for 2002

Pensioners will get only stingy increases in 2002, with all but the poorest of them likely to see their purchasing power reduced. Economy and Finance Minister Nikos Christodoulakis yesterday decided to award pensioners with the Social Security Foundation, the public utilities’ and the banks’ pension funds, increases up to 3.5 percent. This largest increase is confined to pensioners earning up to 400 euros per month. Pensioners earning from 400 to 620 euros will get a 1.75 percent increase, while pensioners earning up to 910 euros will get a 0.75 percent increase. Higher pensions will get no increase. Even if average inflation in 2002 does meet the government forecast of 2.9 percent, it will mean a mere 0.6 percent in net earnings for the low-income pensioners. Unless inflation drops dramatically, most other pensioners will find their purchasing power reduced. Christodoulakis has warned the professionals’ pension funds to toe the government line. The decision is part of the government’s effort to bring inflation down. Inflation, which stood at 2.4 percent year-on-year at the end of November, rose to 3 percent in December and is widely estimated to have exceeded 4 percent in January, due mostly to inclement weather and steep price rises in fruits and vegetables. While the government fears that inflation, which has long plagued the economy, may get out of hand, it is doing little so far to contain expenses, which indirectly impact on prices and hurt efforts to pay off the country’s debt.