EC clears the air on pensions

Labor and Social Insurance Minister Andreas Loverdos yesterday welcomed comments by a European Commission spokesman clarifying that Greek press reports suggesting that pensions will be slashed by half had been based on «a misunderstanding.» Loverdos was responding to a letter sent to a Greek newspaper by Amadeu Altafaj, the spokesman for European Monetary Affairs Commissioner Olli Rehn, stressing that nothing in an agreement signed between the Greek government and the European Commission (EC), International Monetary Fund (IMF) and European Central Bank (ECB) calls for the cutting of pensions by half. In his letter, published in To Vima yesterday, Altafaj explained that the size of Greek pensions will range from 65 percent to 80 percent of a person’s salary for all but the very highest income groups. The EU official explained that the 45 percent or 48 percent figure quoted in Greek press represented only the «contribution-based» part of the pension. Each pensioner would then also receive the basic «welfare» pension not based on contributions, bringing the total to between 65 and 80 percent of the working salary, he said. Responding to Altafaj’s letter, Loverdos described the official’s comments as «a fair and accurate interpretation» of the agreement co-signed by Greece to secure a 110-billion-euro aid package. «The clarification is a very positive development and clears up the misunderstanding,» Loverdos said. IMF officials are due to return to Athens next week to check the government’s progress in implementing austerity measures it has pledged to implement in exchange for the aid. Last week Loverdos and Finance Minister Giorgos Papaconstantinou agreed, in a meeting chaired by Deputy Prime Minister Theodoros Pangalos, agreed that a pension reform bill to be tabled in Parliament soon will conform to the terms of Greece’s agreement with the EC, IMF and ECB. The pact envisages the introduction of unpopular measures, such as the raising of the legal retirement age, as early as 2015.