Package foresees 4.5 bln euros in pension cuts

Representatives of the three parties in the coalition government were on Thursday to continue talks aimed at nailing down an 11.5-billion-euro austerity package for 2013 and 2014 after sources revealed to Kathimerini that the cuts being proposed are even harsher than expected.

These include the abolition of the traditional holiday payments (at Easter, Christmas and summer) for all pensioners, not just former civil servants. It also emerged that the ax will likely fall on all pensions above 800 euros, with cuts starting at 2 percent and reaching 20 percent for the highest levels. The government hopes to raise 4.5 billion euros through pension cuts alone.

According to sources, objections were raised during a meeting between party officials on Wednesday night to proposed cuts to social welfare benefits and benefits for the disabled.

The proposed package also foresees fresh cuts to healthcare, to the tune of 1.3 billion euros, some 500 million euros of cutbacks in defense and 750 million euros in cutbacks to local authority subsidies.

Cuts to the so-called «special salaries» of certain categories of civil servants such as judicial and military staff as well as priests will reach the 12 percent level, according to the proposal which aims to raise 800 million euros in this area. It is likely that police officers and other members of security forces with dangerous jobs, will be excluded from this measure.

As for civil servants, the likely scenario involves between 35,000 and 40,000 employees leaving the public sector by 2014, either through early retirement or for failing to pass an evaluation. Another 110,000 are to leave the service by 2015 either through retirement or the termination of their contracts, Kathimerini understands.

Officials of of the Democratic Left, the smallest party in the coalition, have reportedly proposed that cuts to pensions’ holiday payments be scaled according to income while calling for additional cuts to health sector procurement, defense and clerics’ salaries.

Finance Minister Yannis Stournaras, who is spearheading efforts to draft the package, has said the measures will be ready by next week in time for a scheduled visit to Athens by representatives of Greece’s foreign creditors, the European Commission, European Central Bank and International Monetary Fund, known as the troika. The troika officials are to arrive on September 5 and travel to Nicosia on September 13 ahead of a Eurogroup summit there on September 14.

Stournaras is to meet with troika chiefs on September 9, Finance Ministry sources said on Thursday.

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