New pension levels mean 17 years additional work before retirement

1 December 2015
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The Greek leftist government needs to complete reforms on social security with pressure being amped by international creditors (EC, ECB, ESM, IMF) at a time when Greece’s opposition parties are turning their back and unions are pressuring with threats of strike action.

European Stability Mechanism Chief Klaus Regling underlined the need to push forth with reforms kicking off with social security that he considers is the “most expensive” in the EU, whereas European Commission’s head of mission for Greece Declan Costello said that the increase in employment contributions will have huge repercussions on the market.

The Radical Left Coalition (SYRIZA) cabinet meeting on Tuesday will discuss social security issues in a pressure cooker environment within the ruling party.

Meanwhile, the National Confederation of Greek Workers (GSEE) has refused to participate in dialogue on social security that Prime Minister Alexis Tsipras has called in the framework of the Economic and Social Council of Greece (OKE) as it considers the dialogue to be procrastinating in nature and undermining the intelligence of Greek citizens.

The GSEE believes that the government’s fast track procedures are aimed at bulldozing through workers rights. Specifically, the GSEE describes the government as having a “scissors” in one hand and the “steering wheel of the bulldozer” in the other concerning social security.

Cuts to main pensions are viewed as a one-way street. If Greece’s creditors don’t approve of equivalent revenue-yielding measures to cutting pensions there will be huge slashes to pensioners’ funds. The Ministry of Labor is continuing in its effort to keep the replacement rate of main pensions more than the safety rate of 65%, however creditors want these to drop to 56%. Furthermore, auxiliary pensions need to be slashed by 6-10% for pensions over 165 euros so as to cover the deficit.

If the butchering begins, then it is expected that higher pensions will receive slashes of more than 15%.

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