Greece May Alter Pension Reforms After Creditor Objections

Greek workers launched large protests last month against a pension reform package that would cut retirement benefits and require higher contributions from both employees and employers.

But it was ultimately creditors who may have convinced the Greek government to tweak parts of the planned overhaul – although the changes may lead to steeper benefit cuts than before.

From Kathimerini English:

The government is prepared to concede ground to its lenders over their objections to proposed pension reforms and, in a double-pronged strategy, also offer incentives to opposition parties through a change in the electoral law.

The first week of negotiations surrounding the bailout review made it clear that the creditors object to plans to raise social security contributions by 1.5 percentage points and to change the structure of income tax.

With regard to the hike in contributions, the coalition seems prepared to lower the rise to 1 percentage point and to make the remaining savings by slashing supplementary pensions and limiting some high-end basic pensions.

Greece needs to come up with a pension overhaul that leads to savings equal to 1 percent of the country’s GDP; it’s a condition of the country’s $93 billion bailout.

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