June 23, 2010

Pension plans and holiday pay back under the knife

Kathimerini on the building pressure to go ahead and get it over with on the axing of holiday pay and other pension plan reforms. None of these are popular with anyone in Greece, but foreign creditors and particularly the people holding the strings on the IMF/eurozone bailout package absolutely require it. It seems a fait accompli that the cuts will occur, after much maneuvering by the various politicians to create as much distance between it and them as possible, while simultaneously getting it passed.

"Controversial reforms to the country’s pension system, expected to raise retirement ages and abolish privileges, are to be submitted in Parliament early next week as the debt-ridden government’s international creditors remain unsatisfied with the draft bill as it stands, sources said yesterday.

One of the issues that remains to be resolved relates to the bonus pension payments disbursed in summer and at Easter and Christmas. Sources told Kathimerini that officials from the European Commission and International Monetary Fund want to see these payments abolished.

My question at this point is how quickly holiday pay will show back up in the public budget once the eyes of participants outside of Greece are no longer staring so hard at the accounting books.

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