Gov’t sends pension proposal to lenders without opposition support
The government on Monday sent the country’s creditors its proposal for a sweeping reform of the social security system, which foresees cuts to pensions, though it failed to secure the support of the opposition for the politically contentious overhaul.
The proposal was sent to creditors after Social Security Minister Giorgos Katrougalos presented it to President Prokopis Pavlopoulos, leftist SYRIZA’s political secretariat and opposition party leaders.
Despite recent insistence by government officials that no main pensions would be cut, the proposal foresees cuts to the pensions of all those retiring from 2016 onward.
According to social security experts, those cuts could reach 30 percent for those on high salaries, with an average reduction of 15 percent for average-level monthly pensions of 750 euros and above.
For those who have already retired, no cuts are foreseen though the situation would be reviewed in 2018.
The blueprint also proposes an increase of 1 percentage point in the social security contributions paid by Greek employers and a hike of 0.5 percentage point for workers.
Also in the works is a plan to merge all pension funds into one while the lump sums paid out on retirement by main pension funds are to be cut by around 10 percent.
Auxiliary pension funds will also be affected, with beneficiaries set to receive significantly smaller monthly payouts.
According to sources, representatives of Greece’s creditors who saw the pension proposal on Monday remain skeptical, particularly about the recommended increases in social security contributions.
The quadriga is expected to push for more cuts to pensions than those proposed by Athens with the aim of slashing state funding to the social security system.
According to sources, the International Monetary Fund might use objections to higher social security contributions as a pretext not to back Greece’s third bailout.
The government sought to put on a brave face.
Spokeswoman Olga Gerovasili stressed that “today’s pensions are not being reduced” and accused the opposition of “hypocrisy and irresponsibility” for failing to back the government’s pension proposal, noting that the shortfalls of New Democracy and PASOK had contributed to the country’s dysfunctional social security system.
New Democracy’s interim leader Yiannis Plakiotakis said ND rejects pension cuts but that his party would study the government’s proposals and give an official response.
Union of Centrists leader Vassilis Leventis said he would examine the proposal, noting that although he disagreed overall, high pensions should be cut.
PASOK leader Fofi Gennimata said her party is against both cuts to pensions and increases in social security contributions and proposed that pension funds be supplemented with revenues from privatizations.
Communist Party leader Dimitris Koutsoubas said his party would lobby against the pension reforms in Parliament.
Potami leader Stavros Theodorakis, who was not in Athens yesterday, said that Katrougalos’s meeting with opposition officials was “simply for the cameras.”
