Greece Prepares Pension Reform Plan

ATHENS – Greek Prime Minister Alexis Tsipras has government officials looking at some way to protect society’s most vulnerable after backtracking on promises to set up a so-called “parallel program” offering a safety net and as more pension cuts seem inevitable.

Social Security Minister Giorgos Katrougalos gave Tsipras the latest version of his ministry’s proposal for reforming the pension system as government officials, changing their tune several times over the sticky issue, said they were committed to avoid cuts – but only to main pensions which have already been slashed 30 percent and more, and with lump sums taking cuts of 38 percent and more.

On top of that, the country’s finances are in such bad shape still that pensioners have to wait years to get their benefits – and aren’t allowed to work in the meantime.

There were to be final founds of talks between Tsipras and his top aides in a rush to send a proposal to the Quartet of the European Union-International Monetary Fund-European Central Bank-European Stability Mechanism (EU-IMF-ECB-ESM) which is pushing more austerity in return for a third bailout 86 billion euros, about $93.74 billion.

The lenders want more brutal cuts to main pensions with talk that they could be set as low as 300 euros ($327) as a base and then additions based on contributions workers made over the years from their checks.

The government has reportedly suggested that it can raise adequate revenue for cash-strapped social security funds by increasing the contributions paid by employers and workers but the lenders are skeptical because it would put a further hurt on businesses already struggling with capital controls Tsipras imposed after swearing he never would.

Tsipras reiterated his commitment to protecting primary pensions in discussions with ministers yesterday, his aides said, without explaining how that could happen as tax revenues are far off projections at the same time.

Tsipras is said to be planning to tell the creditors pension cuts would further hurt the economy, an argument that has never worked with them.

Greek officials also plan to highlight the humanitarian impact of further cuts, noting that high unemployment has led to entire families relying on pension payments, but that has fallen on deaf ears too as the creditors want to make sure banks and investors get paid back first, before social services are met.