Creditors tables demands over Greek pension system; want overall reduction in budget

Representatives of Creditors, the so-called “quartet”, reportedly tabled five demands in terms of  all-important pension reform in Greece, as negotiations resumed this week over concluding the first review of the latest Greek bailout program. 

In a meeting with the relevant labor and social insurances minister on Wednesday, creditors pointed directly to a goal of decreasing state expenditures in the social security sector by linking contributions to payments.

The development means creditors want an overall reduction in the percentage of the budget and portion of the GDP that goes towards pensions, a goal beyond the previously stated 1.8 billion euros in annual cuts.

Representatives of the creditors – the ECB, IMF, the European Commission and European Stability Mechanism (ESM) – also expressed demands over the following:

• Reducing the percentage of state recoupment towards primary pensions.
• Raising to 20 from 15 years the minimum required years of contributions for receiving a so-called “national pension”.
• Cuts in auxiliary (supplemental) pensions.
• Proposed government changes in the pension regime for farmers and self-emmployed professionals, like lawyers and engineers.

The creditors also object to the raising of monthly contributions for auxiliary pensions (by no less than 1.5 percent of remuneration – 1 percent taken from employers’ pockets and 0.5 percent from employees). This objection comes in the face of approval by employers’ federations, although individual business owners have expressed adamant opposition.

Creditors representatives met with Minister Giorgos Katrougalos, one of the first ministers on their itinerary.