Greek government proposes pension cuts; opposition slams reform plans

Greek government proposes pension cuts; opposition slams reform plans

Athens, January 5, 2016/ Independent Balkan News Agency

By Zacharias Petrou

Greek Labor Minister Giorgos Katrougalos presented the government’s social security reform plan to the President of the Hellenic Republic, Prokopis Pavlopoulos, and the leaders of opposition parties in a series of meetings held on Monday.

The proposals of the Greek government on the overhaul of the social security system were also delivered to the country’s “quadriga” of creditors for an initial assessment before formal talks could begin over the plan.

The proposal foresees cuts to the main pensions of all those retiring from 2016 onward ranging from 15% to 30% affecting pensionsers receiving above 750 euros while supplementary pensions will be slashed too.

An increase of 1 percent in the social security contributions paid by Greek employers and a 0.5 percent hike for employees is also proposed.

Furthermore, all of the country’s pension funds into one while the lump sums paid out on retirement by main pension funds are to be cut by around 10 percent.

The reaction of the opposition parties was unanimous in the rejection of the blueprint while government spokeswoman Olga Gerovasili stressed that “today’s pensions are not being reduced” and accused the opposition of “hypocrisy and irresponsibility”

Main opposition New Democracy interim party leader Yiannis Plakiotakis said the conservatives reject pension cuts. However, he added that his party would study the government’s proposals in greater detail and give an official response.

Communist Party (KKE) secretary general Dimitris Koutsoumbas said after meeting with Katrougalos that his party will fight in order the draft law to not pass in parliament.

Potami leader Stavros Theodorakis who is visiting the city of Yiannena said that “Katrougalos’ meetings are only for the photographers”. Theodorakis said in a statement that “Potami is not willing to follow the government’s public relations programme”.

On her part PASOK leader Fofi Gennimata said the socialists opposed both cuts to pensions and increases in social security contributions and proposed that pension funds be supplemented with revenues from privatizations.

Enosi Kentroon party leader Vassilis Leventis also expressed his opposition.

Pensions cannot be allowed to fall below the amount paid in contributions, the President of the Hellenic Republic, Prokopis Pavlopoulos, said on Monday after a briefing by the Labor Minister.

“The partners in the European Union must take into account that the social insurance system is the heart of the social state of justice throughout Europe,” Pavlopoulos noted. “It is the main pillar, not just of European democracy but of European civilisation,” he added.

Presenting the government’s proposals, Katrougalos said that pension reform was a “national issue” and that all the political forces had to align themselves behind “all we can agree on,” noting that agreement on rationalisation and social justice should be possible.

Besides the failure of the government to secure the backing of opposition parties on Monday, reports emerged in the Greek press suggesting the Tsipras administration will face strong opposition to the reform plan by creditors too, especially the International Monetary Fund. According to reports, the “quadriga” is expected to demand even higher pension cuts than those proposed by the Greek side while creditors are also considered likely to reject the social security contributions hike.