Athens, February 8, 2016/Independent Balkan News Agency
By Zacharias Petrou
The first phase of talks between the Greek government and the representatives of the country’s lenders ended last week with little convergence on the many open issues and great differences on all the important issues under discussion.
Due to the fact that the Greek side is keen for the bailout program review to be concluded quickly, Prime Minister Alexis Tsipras is working on a “Plan B” on social security reform at the same time that the political and social environment in Greece is getting “heavier” and the possibility of an early election is being widely discussed.
According to reports in the local press over the weekend, the Greek government is working on a plan for scalable supplementary pension cuts and cutting of large main pensions. Also, it could propose reducing the national pension too, mainly for those with less than 20 years of work.
The prevalent scenario foresees 2% – 30% pension cuts for more than 800.000 supplementary pensions above 150 euros.
By offering a revised social security reform plan that includes cuts, the government hopes to wrap up the review swiftly. It is characteristic how Tsipras and his ministers have refrained of late of talking about “red lines” in cutting pensions. However, there is no evidence that even such a plan will be accepted by creditors without objections. Should numbers appear not to add up, creditors are expected to demand main pension cuts.
The difficulty of talks with the creditors and the dramatic tone it is being conducted in, assists the government if it eventually has to make a painful compromise to assert that it “had no other choice” in order to secure the country’s place in the eurozone. However, if talks drag on much longer pressure from society – which is already at boiling point – will pile up dangerously for the government.
The Greek Prime Minister has also put faith in negotiations at political level in order to get the review over the line.
Alexis Tsipras met with Angela Merkel last week in London. Talks proved that the German Chancellor was much more keen to discuss the refugee crisis with Tsipras and to urge him to make progress in this area rather than discuss the bailout review.
The fact that Merkel did not share the same urgency as the Greek PM on the quick conclusion of the review gave Athens hope – according to government sources – that the German Chancellor will not oppose the review being wrapped up quickly.
To tackle the rising protests at societal level to pension reform, Syriza will table parts of its so-called “parallel program” in parliament (which had previously been withdrawn due to objections raised by creditors).
The program – which includes health services for the poor – is primarily aimed at pleasing Syriza MPs that are worried about the difficult upcoming pension reforms they will have to approve. Also, Syriza hopes it will please its supporters and take some pressure off the government.
Several Syriza officials are reportedly advising the Prime Minister to call an early election in order to stop the downward spiral the party’s popularity has entered recently and for the PM not to risk losing any more of hispersonal appeal.
However, the prevailing opinion amongst Syriza officials is that the government should seek to get the bailout review completed quickly in order to change the agenda and attempt to reap benefits of a supposed upturn in the economy and consequent debt relief talks.