Widespread pension cuts on the way

A substantial increase in the minimum number of years that Greeks will have to work to qualify for a basic state pension and reductions of up to 15 percent in retirement pay over 700 euros per month are two of the measures being considered by the government in order to meet the target for spending cuts over the next two years.

Sources told Kathimerini that government officials are thinking of raising the minimum number of working years needed before retirement from 15 to 20. This would qualify the retiree for a basic pension of under 400 euros per month once they reach the age of 65.

The coalition is considering this as an alternative to raising the retirement age from 65 to 67.

A fresh reduction in pensions is also likely. One option would be to reduce pensions between 700 and 1,000 euros per month by 3 percent, those between 1,000 and 1,400 per month by 5 percent and any pension over 1,400 by 10 percent.

The alternative is to reduce pensions between 700 and 1,000 euros by 2 percent, those between 1,000 and 1,300 by 3 percent, from 1,300 to 1,600 by 5 percent, from 1,600 to 2,000 by 10 percent and any over 2,000 by 15 percent.

?The adjustment of pensions will have to happen, even though it will be unpleasant,? said Labor Minister Yiannis Vroutsis. ?This is the only way we can avoid even worse consequences.?

Vroutsis said that he intends to submit firm proposals to Prime Minister Antonis Samaras by the end of this week. His ministry is also responsible for savings in a number of other areas beyond pensions. These include civil servants? salaries.

Sources told Kathimerini that the troika has instructed the government to reduce the public sector wage bill to the same level as 2001 in order to meet the savings target of 11.5 billion euros over the next two years. This means that general government wages and social security contributions would have to drop from 11.8 percent of gross domestic product to 10.4 percent, which is equivalent to a reduction of 3 billion euros.