Tags: Greece | Renegotiate | Pensions | EU | IMF

Greece Tugs at Bailout's Financial Leash, Tries to Renegotiate Pensions

Wednesday, 26 May 2010 02:30 PM

Greece is trying to renegotiate the terms of a drastic pension reform required under the terms of an economic rescue deal agreed this month with the EU and the IMF, senior government officials said.

In the first sign of glitches over the three-year bailout plan, officials said they wanted the EU and IMF to agree full pensions should be payable after 37 years of contributions instead of 40, as set out in the deal, and allow the reform to be implemented later than foreseen.

"The (EU/IMF) memorandum will be implemented but I want to have the option to negotiate to the end," Labor Minister Andreas Loverdos said in a television interview. "I'm fighting for this; I'm not saying I will win."

Greece needs to comply with the memorandum to receive quarterly aid installments from its international backers, and faces a tough battle if it insists on re-negotiating conditions it must meet under the 110 billion euro ($135.1 billion) deal.

Pension reform is a crucial performance benchmark for the debt-choked country under the EU/IMF plan, and any problems over this could raise doubts about the government's resolve to carry out the harsh austerity program.

Perceptions that the Greek pension system was much more generous than their own helped fuel widespread opposition among Germans to footing the bill for Greece's rescue, in which Berlin will pay the biggest national share. The German retirement age is being raised to 67, while Greek men currently retire at 65 and women at 60.

Center-left daily To Vima said Loverdos was "bluffing" and would not be able to renegotiate the terms of the deal.

"The Labor Minister's statements that he is in negotiations ... over pensions are creating confusion," the paper reported.

The European Commission sent Greece a letter to remind it to stick to the terms of the deal regarding the pension reform, a spokesman for the EU executive said on Tuesday.

Greece will provide visiting EU and IMF inspectors with an actuarial study on Friday and hopes it will help convince them to water down the terms of the deal, including implementing the pension reform fully in 2018 rather than 2015.

"This is also an open issue, whether the new way of pension calculation will be implemented in 2015 or 2018," Deputy Labor Minister George Koutroumanis told Skai Radio on Wednesday.

"We have specific arguments on why (it should be) in 2018 and not in 2015," he said. "Of course it is not a problem for us to move it three years earlier but there are technical issues which we have to deal with."

The draft pension bill allows retirees to draw a full pension after 37 years of contributions, three years less than set out in the bailout deal, but gives incentives for workers to work 40 years.

"We say yes to the age limit of 40 as mentioned in the memorandum and we respect it, but we somehow interpret it differently," Loverdos told Mega TV late on Tuesday.

"If it is not accepted, if the actuarial study does not convince, then we will adapt to the memorandum."

The pension bill is expected to be submitted to parliament soon and be voted on in June. The socialist government has a comfortable parliamentary majority which should allow it to pass the bill easily.

But the main labor unions oppose the bill and have warned they will stage strikes in June to put pressure on the government.

© 2017 Thomson/Reuters. All rights reserved.

   
1Like our page
2Share
Headline
Greece is trying to renegotiate the terms of a drastic pension reform required under the terms of an economic rescue deal agreed this month with the EU and the IMF, senior government officials said. In the first sign of glitches over the three-year bailout plan, officials...
Greece,Renegotiate,Pensions,EU,IMF
572
2010-30-26
Wednesday, 26 May 2010 02:30 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved