Two reforms under consideration by the government to comply with the 11.5 billion euro cuts in the next two years reportedly concern the increase by several years of the minimum number of years necessary to obtain a state pension and a 15 percent cut on pensions over 700 euros a month.
Athens daily Kathimerini reported today, citing Finance Ministry sources, that the government led by conservative Prime Minister Antonis Samaras (Nea Dimocratia) is seriously considering to raise the minimum number of years necessary to obtain a pension to 20 from the current 15 years. This would enable workers to get a minimum pension of 400 euros a month at 65 years of age.
The government coalition - supported by the Socialist Pasok party of Evangelos Venizelos and the Democratic Left of Fotis Kouvelis - is examining this measure as an alternative to raise the state pension age from 65 to 67.
However, the same sources said a further cut in pensions was likely. The government in particular is reportedly considering to cut by 3 percent pensions between 700 and 1,000 euros a month, and by 5 percent pensions from 1,000 to 1,400 euros a month. Another proposal provides for a 2 percent cut in pensions between 700 and 1,000 euros a month , by 3 percent for those between 1,000 and 1,300 euros, 5 percent for pensions between 1,300 and 1,600, 10 percent for the 1,600-2,000 euro range and 15 percent for all pensions over 2,000 euros a month.
"Though it will be unpleasant, pensions will need to be touched" Labour Minister Yiannis Vroutsis said yesterday. "This is the only way to avoid even worse consequences". Vroutsis added that he means to present to the prime minister a plan by the end of the week.
His ministry is responsible for state budget cuts in other sectors as well, along with cuts to pensions and public salaries. The same ministry sources said the troika - European Central Bank, European Union and International Monetary Fund - told the government to cut public sector salaries to the same level of 2001 to reach the objective of saving 11.5 billion euros in the next two years.
This implies that public administration salaries and welfare will have to fall from the current 11.8 percent of GDP to 10.4 percent, a decrease worth 3 billion euros. (ANSAmed).