Coalition leaders ponder cuts ahead of Monday meeting

Greece’s three coalition leaders are to hold a crucial meeting on Monday that is likely to decide what form the 11.5 billion euros of spending cuts for the next two years are likely to take. It appears that Prime Minister Antonis Samaras, PASOK leader Evangelos Venizelos and Democratic Left chief Fotis Kouvelis have agreed that the measures should not include a further cut to civil servants’ salaries, thereby ending the 13th and 14th monthly payments, nor the imposition of a 1,500-euro per capita ceiling on healthcare coverage. Instead, it will raise from 5 to 15 euros the cost of a visit to a public hospital for treatment.

One of the areas where the three leaders have yet to agree is on the rise in the retirement age from 65 to 67. This would save about 1 billion euros over the next two years. Venizelos and Kouvelis suggested trying to find alternative measures of equal value.

The leaders also have to decide where to set the limit on how much retirees who have basic and auxiliary pensions can receive per month. It is likely that the ceiling will be placed between 2,300 and 2,500 euros. There is also a proposal to reduce any pensions above 1,400 euros by 10 percent but Venizelos wants the reduction to be only on the amount that exceeds this level, rather than on the total retirement pay.

Among the measures that look certain to be included in the latest cost-cutting package is a 22.7 percent reduction to the lump sum civil servants receive when they retire. Private sector workers who draw their pensions from state-backed funds could also be in line for a cut. Also, public hospitals will be instructed to increase their use of generic drugs to 66 percent of the total medicines they use by 2014.

The government sees a quick agreement on the fiscal measures as the first step to rebuilding trust with its lenders. “The road ahead is long and demands patience and persistence so we can make up for lost time,” Alternate Finance Minister Christos Staikouras told Sunday’s Kathimerini.

“Greece cannot be saved; that is simple mathematics,” Michael Fuchs, deputy leader of the parliamentary group of Chancellor Angela Merkel’s Christian Democrats told business magazine Wirtschaftswoche. ”The government has neither the will nor the means to implement reforms.”


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