The Greek government is pressing its international lenders to exclude the pension reform plan from the backlog of reforms that need to be completed before exiting the bailout program, Reuters reported. With the final review over its progress on the bailout pledges underway, the Greek government is under heavy pressure to complete the outstanding reforms in advance of the final 7.2-billion-euro aid tranche and officials comment that this is an act of desperation in order to avoid public backlash.
Still, with some of the reforms incomplete, the Greek side refuses to pass a law merging supplementary pension funds by November because the plan would effectively mean a further cut in pensions for many Greeks and that would come as a complete opposite of many government officials’ commitments to avoid further reductions in pensions and wages. For that reason, the Greek government sent a letter to the Troika explaining its arguments for removing the pension reform from the upcoming review, underlining that cuts on wages and pensions were also imposed in 2010 and that the country’s pension system is now secured until 2060.
On the contrary, the Troika is pushing Athens to complete all reforms, including pensions’ reform, before the program ends, but there is still room for flexibility, depending on Greece’s progress on other reform fronts, a source close to the matter stressed. The Greek coalition government is now trying to secure its sustainability, threatened by main opposition party SYRIZA, by exiting the bailout program a year ahead of schedule, hoping that this will boost the support to scrape through the upcoming crucial presidential election, avoiding early general elections. As a reminder, the polls currently give SYRIZA the lead by 5% to 7%.
But Athens first needs to successfully conclude the current review, which is expected to involve tough negotiations on other areas as well, ranging from a plan to tackle bad loans at Greek banks and a unified wage scheme for public workers.
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