“The meeting went well. We made great progress. We will take a break and come back in early September,” IMF representative Poul Thomsen was quoted as telling reporters after the meeting. Finance Ministry sources indicated that the talks had gone “very well” and had focused on the measures to be taken this year to cover a budget shortfall as well as the savings for 2013 and 2014.
The aim is for the measures for this year to be finalized by the end of the coming week while the package for the next two years will be developed over the coming weeks and finalized in early September in time for a scheduled Eurogroup summit on September 3, the sources said.
Kathimerini understands the coalition will abandon its intention to raise the retirement age from 65 to 67, although this would have saved 1 billion euros, and instead remove the adjustment period introduced in the 2010 pension reform.
This would mean that nobody could retire under the age of 65 from next year. Also, government officials have decided against cutting just pensions above 1,400 euros, which form the minority of retirement payments in Greece, but to reduce all pensions by about 5 to 6 percent. This would mean that someone earning a pension of 700 euros would lose about 35 euros per month. Sources said the switch is a result of cuts to large pensions not providing enough savings.
The ceiling for the combined total of basic and supplementary pensions is currently 3,690 euros. Lowering it to 2,500 would only save 25 million euros. There is also concern that the reduction would be successfully challenged in court. Agreeing the details of the 2013-14 cuts is one of the goals the government is aiming to achieve in the next few weeks to secure a positive review. The other two are implementing the 3 billion euros in fiscal measures due this year and moving forward with structural reforms and privatizations.