Cuts in pensions could be limited

The government will attempt to find alternatives to some of the toughest social security measures included in the third bailout agreement by creating a new structure for pensions that will be implemented as of next year.

Using the conclusions of an experts’ committee that should be submitted to Labor Minister Giorgos Katrougalos next week, the ministry will proceed with major structural changes and significant pension cuts. These will affect those who have already retired as well as current workers.

The committee is examining scenarios that even include the recalculation of all pensions, although social security experts say it would be hard to implement, both for technical and legal reasons.

The main idea is based on the application of a single set of social security rules for everyone, on common terms regarding contributions and benefits. Pensioners saw their monthly payments reduced in July as a result of an increase in their contributions toward healthcare provider EOPYY. The fact that these cuts count as part of the government’s effort to achieve a targeted fiscal adjustment equal to 1.3 percent of gross domestic product by 2016 means that ministry officials hope new cuts may be considerably limited.