Pension reform tests Greek government early in the new year

Pension reform tests Greek government early in the new year

Athens, January 4, 2016/Independent Balkan News Agency

By Zacharias Petrou

Greek Labor Minister Giorgos Katrougalos will meet with the President of the Hellenic Republic, Prokopis Pavlopoulos, on Monday to brief him on the government’s social security reform proposal.

Katrougalos will also meet with the leaders of the opposition parties in one-on-one talks to inform them of the government’s plans before the country’s creditors are briefed on the Greek proposal.

The Greek government plans to table a draft bill introducing changes to the pension system by 15 January 2016. Katrougalos said in an interview with “Ethnos” newspaper that a draft law is expected to be submitted to Parliament.

“I am in close and constant contact with the deputies of the government majority and I am certain that they will vote for a fair and necessary reform,” he underlined.

The Labor minister, however, said that the negotiation will be difficult as some of the country’s creditors are “obsessed with making cuts and therefore the government is looking for a foothold at diplomatic level”.

Prime Minister Alexis Tsipras admitted last week that social security reform is vital as “otherwise the government will not be able to pay pensions in five years.”

Similar comments were made by the Labor Ministry’s general secretary, Andreas Nefeloudis, who said the state will be unable to pay pensions in a year’s time if the system is not overhauled now.

Meanwhile, Greek Finance Minister Euclid Tsakalotos commented: “There are distortions [in the social security system] that must be corrected, specific cases that should be reviewed so that the social security system becomes sustainable in the medium term.”

The Greek proposal reportedly rests on three pillars: Increase of social security contributions or imposition of special levy on internet banking transactions; no cuts of main pensions; and no cuts of supplementary pensions below 170 euros.