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Economy

Returning SYRIZA-Cut Pension Benefits Costs Greece 1.4 Billion Euros

ATHENS – A decision by Greece's highest administrative court that pensioners unlawfully had pensions cut during a near decade-long austerity crisis has resulted in an order for retroactive return of the monies that will cost the New Democracy government 1.4 billion euros ($1.66 billion.)

The government had said it was trying to figure out some way to mitigate the cost, including an idea to offer pensioners less if they took a lump sum instead of a full payout over time.

The decision comes as the government is trying to restart the economy that nearly halted during the COVID-19 pandemic, paying out 17.5 billion euros ($20.73 billion) to companies closed during a lockdown and workers temporarily laid-off.

But the European Union is sending Greece 72 billion euros ($85.27 billion) in loans and grants to help deal with the cost of dealing with the Coronavirus and the aftermath and it wasn't reported where that will go.

Prime Minister Kyriakos told lawmakers that “there is no room for further provisions,” said Kathimerini, the order coming at a tough time for the government as it's also trying to lure foreign investors back.

“This particular cost touches the limits of the country’s fiscal potential,” he said of the ruling by the Council of State that some pension cuts made in 2015-16 under the former ruling Radical Left SYRIZA, breaking a vow not to do so, were unlawful.

Mitsotakis said a single payment would apply only to main pensions and not supplementary pensions or benefits. The payments will be made to some two million private and public sector pensioners.

He used the opportunity talk about the EU Recovery Fund and said, “We are now facing a really big national challenge to have a different perception of how we manage these funds,” he said.

He added that the country is called upon to turn Next Generation EU into Next Generation Hellas for “our young people, offering security, good jobs, hospitable daily life and social cohesion.”

Now major opposition SYRIZA leader Alexis Tsipras denounced what he called a “haircut” on the sums to which the pensioners are entitled without explaining why he made the cuts in the first place.

“The decision of the courts does not concern the amount of 1.4 billion euros. It concerns an amount that if I am not mistaken is 3.9 billion euros ($4.62 billion,” he said, reminding everyone just how much he had cut their pensions.

He said that the payment of retroactive payments to pensioners was not a political choice, but an obligation that wouldn't have been required if he kept his promise not to cut them while ruling. 

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