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Desperate Greece Set to Raise Retirement Age to 66

The poorest Greek pensioners face more benefit cuts under new austerity plans. (PHOTO/Yannis Behrakis/Reuters)

ATHENS – Looking to slash government spending everywhere it can to satisfy the demands of international lenders, the  coalition led by Prime Minister Antonis Samaras is mulling whether to force Greeks who were set to retire to work at least another year, raise the retirement age to 66, and make further cuts to pensioners whose benefits have already been cut to $743 while protecting those who get the current ceiling of $4,905 monthly. And more austerity measures might be coming next year.
The newspaper Kathimerini reported those moves were under consideration as Finance Minister Yiannis Stournaras met on Aug. 5 with officials from the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) who have insisted the new government impose more harsh austerity measures and cut $14.16 billion in spending.  The Troika said it wants a detailed list of cuts when it returns to Athens on Aug. 27.
After the meeting, Troika officials said they were satisfied with the progress report and would return in September. The newspaper Kathimerini reported that the coming package includes reductions to auxiliary pensions, more than 30 percent to lump sums paid on retirement and to social benefits. The retirement age is to increase to 66 from 65, while low-level pensions are expected to be trimmed by up to 6 percent. Also, the operational spending of ministries is to be cut more than first planned. No mention was made of going after tax evaders owing the country $70 billion.
The TV station SKAI reported that Troika officials presented a list of cuts they wanted made and that government officials agreed with most of them. Prime Minister Antonis Samaras and his coalition partners, Socialist PASOK leader Evangelos Venizelos and Democratic Left chief Fotis Kouvelis, are to meet on Aug. 6 and Aug. 7 to discuss the outlook for privatizations and the merging of state organizations. Venizelos and Kouvelis last week gave in to Samaras’ insistence that Greece must do what the Troika says and backed away from insisting he ask for more time to implement reforms.
Samaras has reneged on his campaign pledge before the critical June 17 elections to try to renegotiate the terms of a second pending rescue package, this one for $173 billion, and said Greece has no choice but to do as the Troika orders. The country is surviving on a first bailout of $152 billion in loans, and the last installment, of $38.8 billion is due next month, without which the country will not have enough money to pay its workers and pensioners, who have already undergone waves of pay cuts, tax hikes and slashed pensions while the shipping industry, the world’s largest, pays no taxes.
Kathimerini reported that the government may block retirements this year, forcing those who have already submitted papers to work another year. The government has also reportedly already backed away from exempting pensioners making less than $1,743 per month from new cuts and lowering the ceiling from $4,905 monthly to $2,973, fearing a court challenge from wealthy pensioners. Instead, the poorest pensioners, who’ve already had their pensions reduced and their auxiliary pensions eliminated completely, will be cut another 35 euros per month.
Alternate Finance Minister Christos Staikouras told Kathimerini that the government hopes that by giving in to Troika demands now and making more cuts that it will help Greece get out of its economic crisis, although austerity measures have worsened a five-year-recession, put nearly 1.1 million people out of work, shrunk the economy by 7 percent and is closing 1,000 businesses a week. “The good scenario… is for our partners to give us a positive review, for us to receive the next installment, to complete the recapitalization of banks, to achieve the extension of the fiscal adjustment period and economic recovery,” Staikouras said in an interview.
Staikouras suggested that additional measures would probably not be needed for the time being but did not rule out further cuts next year. “If we implement the measures that have been agreed for 2012, we will meet the fiscal targets in the memorandum,” he said. “We believe that the measures (for 2013 and 2014) will be enough when they are combined with steps to reduce tax evasion and the recovery of the economy.” That has been said before by previous governments, all of which failed to meet any fiscal targets, prolonging the crisis.

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