Greek Labor Minister George Katrougalos agreed on the creation of a basic pension worth 390 euros. His plans for the new pension rates are aimed at protecting low pension earners due to the restructuring (ie. cutbacks) of Greek pensions. The recommendations are to be put forth at the ministerial council on Tuesday. Speaking with Nikos Hatzinikolaou on Tuesday night, he stressed that funds have run out of reserves, hence:

– A necessary differentiation of the portion of the replacement rate depending on the pension amount as, according to Katrougalos, a pensioner receiving 700 euros per month should not be subject to the same rates as someone who receives 4,000 euros. Furthermore, there will no longer be different ways in which pensions are calculated at state and special funds. The findings of the committee looking into pension matters stated that the recovery rate of main and auxiliary pensions should be limited to 55% from current levels that are at 70% after 35 years of insurance.

– The pensions need to be restructured according to the social insurance framework or the government expectations.

– Insurance experts believe that the reduced contributions will lead to slashes worth 30%. This method, approved by the high court will “absorb” the obligations worth 4 billion euros canceled by the supreme court’s rendering of cutbacks to high pensions as unconstitutional.

– Katrougalos wants an end to auxiliary pensions that should be merged with main pensions.

– Brave steps to combat undeclared labor will be taken.