The Court of Audit, Greece’s highest fiscal court, is expected to finally give the go-ahead in September for the repayment of some 1.4 billion euros in pension cuts which courts found unconstitutional.
This money involves pension cuts that were made in 2012, when the second memorandum was signed between Greece and its creditors – the European Commission, the European Central Bank and the International Monetary Fund.
Three years later, the Council of State, Greece’s highest administrative court, established the cuts as unconstitutional.
Legislation has limited the reimbursement of pension cuts covering the period from June 2015, the date of the court’s decision, to May 2016, when new legislation enshrined the cuts in a way that made a legal challenge impossible. And the reimbursement concerns only main pensions, not auxiliary ones paid through sector- or even employer-specific funds that were invested.
Initially, the government will pay €900 million to private sector pensioners. The Court of Audit still has to rule on the €500 million reimbursement of retired civil servants. But that ruling, which must be followed by a parliamentary vote authorizing the expense, is expected to come soon.
The total number of recipients from the private and public sectors is estimated at 1 million, so no pensioner will see their wealth increase significantly. But, since the government had previously pledged that everyone would be paid in the fall, in one go, and justified this by invoking the pandemic-induced economic crisis, it seemed like a good injection.
Only the government is now having second thoughts: It still wants to pay the money in 2020, but most likely in two installments, one by the end of September and the other by year-end.
All reimbursed pensioners are, by law, surrendering any claims to partial reimbursement of cuts to auxiliary pensions, also made in 2012, or the so-called “13th and 14th salaries,” a full month’s salary as Christmas bonus and half-monthly bonuses awarded around the Easter and summer holidays.
Cuts to both categories were found unconstitutional. This provision does not apply to those who have already legally challenged the cuts.