Greece’s lenders present new proposal
Greece’s lenders have suggested to the government that cutting existing pensions above 1,500 euros per month could lead to the conclusion of the first bailout review, Kathimerini understands.
When the mission chiefs from the institutions visited Athens earlier this month, but also in an op-ed written by the International Monetary Fund’s European director Poul Thomsen last week, it was made clear to Athens that avoiding cuts to basic pensions would not be possible.
The government’s pension proposals rely on a 1.5 percent increase in social security contributions to reach the target of 1.8 billion euros in savings agreed with the creditors. It also proposed cuts of 5 to 30 percent to pensions for those who retire from the start of this year.
However, sources say that the counter-proposal being made by the lenders is for the government to cut existing basic pensions above 1,500 euros per month. It is thought that if the Greek government agrees to this, it will not be required to take any other fiscal measures this year.
The government has pledged not to cut basic pensions but was prepared to consider a lower increase in social security contributions and to make up the difference by trimming auxiliary pensions and basic pensions above 2,300 euros per month. So, the proposal that has now apparently been put on the table by the lenders appears to ask much more of the coalition.
There is concern within the government that an agreement to conclude the first bailout review, which includes cuts to basic pensions that are not just at the high-end of the retirement pay scale, will not receive the approval of all the coalition MPs.
The latest protests by farmers, which saw about 10,000 people rally in Athens on Friday, with some remaining in Syntagma Square over the weekend, has added to some MPs’ jitters.
The reactions of the farmers to pension and tax reforms has prompted some SYRIZA lawmakers to avoid visiting their constituencies, especially following attacks on some of the party’s headquarters in the countryside.
The government is hoping to rally MPs through what it says is an attempt to tackle corruption, consisting of initiatives such as the tender for TV permits and the implementation of the so-called “parallel program,” which contains a series of measures aimed at easing the impact of the crisis on the worst off in Greece.