Greek Government to ‘Freeze’ Pensions Until 2022, as Creditors Require

Thursday, June 8th, 2017
Last Update: 12:31
Greece’s creditors ask for the “freezing” of pensions for an additional year — until 2022 instead of 2021 — as a prerequisite to close the second review of the bailout program.

This new requirement comes as a result of the Greek government’s commitment to a primary surplus of 3.5% in 2022. The relevant legislation is expected to be tabled in the House on Friday in order to be voted before the June 15 Eurogroup, along with about 18 prerequisites still pending.

Freezing of pensions will save 90 million euros, an amount that will contribute to reaching the 3.5% primary surplus target in 2022.

The International Monetary Fund has also requested the provision for restoring the two principles governing collective agreements as of September 2018. This is another prerequiste that needs to be legislated. However, there is still pending a legal decision regarding the constitutionality of pension cuts from 2019 onward that were recently ratified.

Another prerequisite regarding pensions that remain pending is the commitment to recalculate and issue 10% of pension applications submitted from May 13 until December 2016. Overall, it is estimated that 3,500 new pensions should have been issued already. The Ministry of Labor says that about 2,000 have already been issued, while several more have already been approved and wait to be issued.

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