Greece’s Labour ministry aims to save up to 7.2 billion euros in the framework of a medium-term fiscal program, from cutting spending and raising revenues, Labour and Social Insurance Minister Louka Katseli said on Tuesday. Speaking to reporters, the Greek minister acknowledged that cuts in supplementary pensions will affect also current pensioners, mainly those who receive high pensions.
The Labour minister said the aim was to save 3.4 billion euros from raising revenues and another 3.5 billion euros from cutting spending and added that this effort would be based on five axis:
-Ensuring funds through combating of informal labor to 16 pct from 26 pct currently and the inclusion of 480,000 workers in the system.

- Better management of pension funds’ real estate property

- Drastically cutting pharmaceutical spending

- Ensuring the viability of pension funds

Sustainability of social insurance benefits through a restructuring and evaluation of incentives offered to unemployed people

Katseli said the ministry was in constant dialogue with its troika partners and was fully aware of its responsibility to lead the country out of the dead-end. Commitments are a given fact that readjustments have to be made, she noted. She confirmed a reduction of workers’ pay by 5 pct in 2011 (both for the private and public sectors) after a 2.7 pct drop in 2010.
George Koutroumanis, Deputy Minister, said the ministry’s programs helped in containing unemployment to 15 pct of the workforce and noted that a program to subsidize social insurance contributions for 100,000 unemployed people came at a cost of 840 million euros per month, while rising unemployment brought revenue losses of 960 million euros. Cutting pay reduced revenue by 800 million euros, while development in the labor market hit pension funds with losses totaling 2.6 billion euros.
Koutroumanis dismissed press reports that the government was planning to impose a ceiling on pension payments.