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Banking transactions taxed to save pensions

02 January 2016 / 21:01:53  GRReporter
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The government will introduce a tax on banking transactions, although the creditors refuse that funds collected this way be used for addressing the pension issue.

Circles in the Ministry of Finance claim that the annual revenues from this tax will be used to ensure the long-term robustness of the pension system.

According to Kathimerini, the ministry is suggesting a tax of 0.1-0.2%.

The government will send the creditors its proposal for reforming the pension system on Monday, with the aim of passing the bill on 15 January. A day earlier, on 14 January, Eurogroup will hold its first meeting for 2016, and the issue will be on its agenda.

Tsipras has emphasised in his statements that the government's purpose is to avoid pension cuts. He acknowledged, however, that the system needs reform because if it doesn't get one there will be no money for pensions in five years. Therefore, Athens has to offer equivalent measures to make sure it has the money to plug all the gaps.

The creditors are against the proposed measures on the grounds that they will hinder the country's development. The government proposes a 1% to 1.5% increase of contributions for supplementary pension insurance at the expense of employers, with the rest being paid by employees.

The European Commission takes exception to Athens' intent to postpone the vote on the bill until a political consensus is reached.

"The government won't accept to lay down its arms in the negotiations for pension reform," said Environment Minister Panos Skourletis. He stressed that the goal remains the establishment of "alliances in the European area, which will allow us to avoid cutting the basic pensions." The minister also argued that "there is no need to expand the government majority."

For his part, Education Minister Nikos Phyllis said that the pension system is the "mother of all battles." He maintained that if this matter is resolved, the country will emerge from austerity and will gradually head towards the reconstruction of the welfare state.

Panagiotis Rigas, secretary of SYRIZA's Central Committee, said there was no chance that pensions be reduced. In an interview for Mega TV, he talked about a never ending struggle, in which the government will not back down. He also emphasised that government endeavours on all fronts had been successful. Regarding the vote on the bill on pension reform, Rigas expressed confidence in SYRIZA's MPs. According to him, the institutions have no reason to reject the Greek proposals as the current pension cuts have dragged 45% of the Greek population below the poverty line.

"In no case shall we vote anti-popular and painful measures," said Yannis Kalianos from the Union of Centrists, and added: "Everybody knows there will be a reduction in the basic and supplementary pensions." "We won't accept that pensions  be cutbelow 1,000 euros, which will hurt the poorest and the middle class," he said.


Tags: pension system reform tax on bank transactions
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