Shocking proposal by Greece’s lenders: Payment of pensions according to income

While the Greek government says it will not take any more horizontal measures and will not reduce wages and pensions, representatives of its creditors proposed a new insurance bill by calculating pensions based on income in a meeting held yesterday at the Ministry of Labour.

The main issue of the meeting, which was attended by senior IMF and Reichenbach team members, was to improve the revenues of pension funds, as the two largest pension funds IKA and OAEE, are trying to end the year with borrowed money and threats of evictions and auctions. As for 2014, things will be even worse. It is estimated that at best the finances of funds allow planning until Spring.

That’s when the lenders’ representatives made their proposal, which was rejected by the Ministry of Labour. Essentially, Troika’s consultants asked for a new insurance bill where the pension will be calculated based on the total income of each insured person and not on contributions and insurance years. This of course requires an interconnection of the insurance bill with the tax bill, as capital.gr says. The Greek side did not engage into this conversation, rejecting the proposal on the grounds that such changes cannot and are out of time to be discussed. Secretary of Social Security Panagiotis Kokkoris, stated that the priority of the Greek government should be to provide assistance to the insured and especially those of OAEE to join a better debt settlement system, in order to save their businesses.