Armageddon for Greece’s elderly – Sweeping 7% pension slashes

Doomed to poverty! The very people who once fought for Greece’s freedom are now being sacrificed

Labor Minister George Katrougalos returned to his old post after 27 days of absence with renewed zeal in efforts to find a solution to the cash-strapped social security funds. No sooner did he receive his portfolio on Wednesday that he hinted that new cuts to the already butchered main and auxiliary pensions are inevitable.

The third bailout program signed by Prime Minister Alexis Tsipras calls for a 2.5-billion-euro reduction in pension expenditure by 2018, and the only way this can be achieved is through cuts to even small pensions.

Katrougalos is calling for the findings of the experts committee on social security to be delivered in the first week of October so that the ministry can come up with express reforms to be delivered to Greece’s social partners in the first week of October. Once locked, changes will be implemented by January 1, 2016.

Reforms on the table aim at economizing 1% of the GDP (1.8 bln euros) through pension cuts. Horizontal cuts of 6-7% are being considered so as to ensure 4.2 bln euros are saved. A recent Council of Greece decision that found pension cutbacks made in 2012 to be unconstitutional may result in pension slashes of 12.7%.

Structural changes include the merging of funds with cross-the-board rules for all those who are insured. Katrougalos pointed out that despite the union of funds there are still around 500 different ways to calculate pensions.

Pension changes according to the third bailout
– By October 2015, the government needs to come up with measures to make up for the cuts that were cancelled by the Council of Greece that ruled pension cuts made in 2012 to be unconstitutional.
– By December 2015, the union of all social insurance funds needs to be completed.
– By the end of 2019, Pensioners’ Social Solidarity Allowance (EKAS) needs to be abolished, starting by the highest 20 percentile from March 2016.
– By the end of 2016, a joint fund needs to be created whereas the collective devices of pension funds need to be joined by the end of 2017.