Speaking in Parliament on Wednesday, Prime Minister Kyriakos Mitstotakis said the government will this year return 1.4 billion euros to pensioners whose income was slashed during the financial crisis in the previous decade.
The move, which will further burden this year’s budget, comes as the Greek economy is feeling the powerful impact of the nationwide lockdown to contain the coronavirus.
Mitsotakis stressed to lawmakers that “there is no room for further provisions.”
“This particular cost touches the limits of the country’s fiscal potential,” he insisted.
The decision came in the wake of a recent ruling issued by the Council of State, the country’s highest court of legal arbitration, that some of the pension cuts made in 2015-16 were illegal.
The PM clarified that the one-off payment applies only to main pensions and not supplementary pensions or benefits. The payments will be made to some 2 million private and public sector pensioners.
The relevant amendment was submitted on Wednesday for the pensioners of the private sector, while there will be a separate amendment for the pensioners of the state.
A key part of Mitsotakis’ speech was devoted to the opportunities that the EU Recovery Fund can afford the new generation.
“We are now facing a really big national challenge to have a different perception of how we manage these funds,” he said, adding that the country is called upon to turn “Next Generation EU into Next Generation Hellas” for “our young people, offering security, good jobs, hospitable daily life and social cohesion.”
For his part, SYRIZA leader Alexis Tsipras denounced what he called a “haircut” on the sums to which the pensioners are entitled.
“The decision of the courts does not concern the amount of 1.4 billion euros. It concerns an amount that if I am not mistaken is 3.9 billion euros,” he said, adding that the payment of retroactive payments to pensioners was not a political choice, but an obligation.
Trying to reinforce the narrative that the country’s conservative government is constantly trying deceive the middle class, Tsipras also referred to the issue of primary residence protection, liking the relevant existing legislation to “a bridge which is dilapidated and for whoever steps on this bridge unfortunately there is a risk of falling into the water.”