No pension decision before Dec 2

Pensioners will have to wait until the December 2 Eurogroup meeting to find out whether their pensions will be cut further a few days later, sources from Athens say following contacts with the European creditors.

Eurozone officials have told the government that they will probably have insufficient data before December to make such a decision, the same sources said.

The Eurogroup meeting before that will take place on November 5, by which time the final budget draft will not be ready – as it will not be submitted to Parliament until November 21.

The creditors appear determined to wait until the last moment so they can examine the latest data on revenues and expenditure in 2018 before making credible projections for 2019. Not cutting pensions will mean extra spending of almost 2 billion euros next year.

The government claims that despite this it will still be able to exceed the primary surplus target of 3.5 percent of gross domestic product, which will allow it to finance a series of measures, including easing the tax load.

All this will constitute part of the negotiations with the creditors, although the latter continue to insist on the baseline scenario of the pension cuts, with the mind-set that “a deal is a deal.” Athens will keep trying to change their minds, citing the argument of the recessionary effect that the pension cut would have.

Meanwhile, reports issued by Deutsche Bank and ING have focused on the absence of high growth rates in the Greek economy, despite the country’s emergence from the bailout programs, with the German lender particularly stressing that the fiscal target overruns could be counterproductive in today’s environment.

Deutsche Bank highlighted that the primary surplus of 3.7 percent of GDP expected for 2019 by the European Commission will have a negative impact of 0.8 percentage points on GDP.

ING noted that the “almost clean exit” from the program has left Greece with many challenges, the main one being sustainably higher growth rates while meeting the obligations to the country’s creditors.