Wage earners will pay 9.5 of the 11.5 billion euros

To cover the 11.5 billion euros demanded by our lenders, the government aims to drain even further wage earners, low-level pensioners and EKAS beneficiaries who so far have suffered the fewest cuts, yet the largest impact of this crisis. 

The Troika is now pressing so that 9.5 of the 11.5 billion euros be saved from cuts in wages and pensions, instead of the 7 billion in the original plan. Officials are also discussing horizontal wage cuts in the narrow public sector at a rate of 5%.

The government aims to save 8.5 billion euros from cuts in salaries, pensions and benefits. And if they add another 1 billion, expected to be collected from the increase in the retirement age from 65 to 67 years of age, then the imposed cuts will reach 9.5 billion.

Reductions in pensions will start much lower, perhaps from 600 euros in total rather than 1,000 euros. Officials are also thinking of cutting the minimum IKA pension to around 400 euros and reconsidering slashing the minimum OGA pension from 360 to 330 euros.

It is now almost certain that the measures already agreed upon include the elimination of the remainder of the 13th and 14th salaries in the public sector and the elimination of the 13th and 14th pensions for all pensioners.

The government is trying to lock the new package by next Sunday to submit it to parliament next week and vote on it by October 8 when the Eurogroup meets to go over the conclusions of the Troika.

Speaking at a Greek-Chinese entrepreneurship conference yesterday, Stournaras said that the 11.5-billion-euro cuts will come in 4 years, thus heralding the much-talked extension. He admitted, however, that Greece will remain in remission for at least another 2 years and that by the end of the year, the GDP will have shrunk by 20%, reaching 25% in 2014.