Prime Minister Alexis Tsipras insisted on Friday that the government would not allow main pensions to be cut in its upcoming negotiations with Greece’s lenders over social security reforms.
Tsipras chaired the last ministerial meeting of 2015, which focused on the tasks that lie ahead for the cabinet. Representatives of the institutions are due back in Greece in mid-January to begin the first review of the country’s third bailout and pension reforms are expected to dominate the discussion.
The coalition has said it wants to avoid touching basic pensions and Tsipras told his ministers yesterday that he considers this position non-negotiable, or a so-called red line.
“We have no intention of making the 12th consecutive cut to main pensions since 2010,” Tsipras reportedly told his cabinet, while referencing reductions made by previous Greek governments during the crisis. The prime minister noted that the previous reductions had failed to ensure the sustainability of the pension system.
He suggested that the government could find ways of making some 700 million euros in savings it is still looking for without interfering with standard retirement pay.
Sources said the SYRIZA-Independent Greeks coalition is considering a number of measures to avoid the majority of pensioners being affected. These include reductions to auxiliary pensions, making commercial use of the assets owned by some social security funds and cutting the lump sum payment some pensioners receive when they reach retirement age.
The government is also focusing on social security contributions, which are set for an increase of at least 1 percentage point (0.5 for employers and 0.5 for employees). It hopes that it may be able to stave off a further rise in contributions by improving the collection rate and clamping down on companies that evade taxes.