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EU Denies Pensions Cut to Half

The EU denies having asked the Government to cut pensions to half and attributes rumours to Press misunderstanding. In a letter to newspaper “To Bima”, EU Monetary Affairs Olli Rehn spokesman underlines that the percentage of low and middle pension will range from 65%-80%. He also says that the 48% referred represents the average percentage for the calculation of pension sum based on contributions paid to which the basic non contributory pension, to which we have no objections, will be added.
The Employment Ministry, in its statement, underlines that all misunderstandings, created by what Troika representatives had supported, have been clarified.
“The memorandum nowhere indicates that pensions will be cut to half” says alternate director of EU Monetary Affairs Commission and Olli Rehn spokesman Servas Derouze in an exclusive statement to paper “Bima tis Kyriakis”.
Specifically, Mr. Derouze said: “A replacement rate of 45% to 48% has been reported by part of the Press. It is a misunderstanding. The figure of 48% is the simple calculation of 1.2% (average annual replacement rate) for 40 years (contribution period for full pension) and therefore represents the average replacement rate of the contributory scheme (for one person paying contributions for 40 years). In it he notes the non contributory basic pension is added -to which we have no objections. The basic pension increases replacement rate from 65% to 80 % to all except for high income groups. These replacement rates are in general similar to those in force in most EU member states and well above the minimum levels required by the European and international social insurance institutions.
In response to the above letter , the Employment Ministry issued the following statement:
The statement by Olli Rehn spokesman says that the Memorandum nowhere refers that pensions should be cut down to half. The specific position is correct. The employment and Social Security Ministry firmly supports it from the very first moment. Olli Rehn spokesman position to support that non contributory basic pension will be added to the 48% replacement rate for calculation of the contributory pension is the most positive development. This is the correct and exact interpretation of the Memorandum. Therefore all misunderstanding created by Troika representatives have been clarified.

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