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By Wednesday it will be clear how 1.5 billion euro will be saved

15 July 2012 / 14:07:27  GRReporter
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The next five days will be especially tense for the financial team of the Greek government because by Wednesday, when the leaders of the three parties of the coalition will meet, the measures, required by the supervisory Troika for the saving of ­­1.5 billion euro in the next 2 years will have to be ready.

At the leaders' meeting, the Financial Ministry is expected to present the plan which will include the equivalent measures amounting to 200 million euro and which are to replace the cut in the special budget tables, as well as the detailed packet of measures amounting to 11.5 billion euro for the period 2013-2014.

According to sources, on the negotiating table are proposals foreseeing the following:

1. Decrease of the upper limit of pensions and salaries. According to one of the scenarios, the upper limit of the total size of the pension (main and additional) from all insurance funds falls to about 2,400 euro, from 2,770 euro, which is valid today. The possible enforcement of this measure will bring a significant decrease in the pensions of the employees in the broad public sector, as well as of the self-insured people (doctors, lawyers, engineers, etc.). As far as the salaries are concerned, the possibility of a cut above a defined limit is evaluated, which is expected to be about 2,200 euro and concerns mainly those working in the broad public sector and the government structure enterprises.

2. Decrease in the one-off payment at retirement by the insurance funds which are in the red. According to the Troika's reports, this decrease could reach even up to 30%. As an alternative measure, in order to avoid a new big cut in the one-off granted sums, some funds propose that contribution payments  be increased or for the two measures to be combined. Also, it is proposed to increase to 25 the years during which insurances, needed for the granting of the one-off payment, are paid.

3. Unification of all social benefits (benefits to the retired, dole, benefits for families with many children, home credits, rent subsidies, etc.) into one or a maximum of two, which will be received only by those, who live under the poverty threshold or in misery. When granting the benefits the following will be taken into consideration: the income from all resources (work, properties, stocks, dividends, interests from deposits, etc.), as well as estates and other assets (properties, plots). In cases of an income and properties above the defined limit, the people will lose the right to receive social benefit or any other benefit received from the state. According to  the memorandum, in the next two years the resources for social payments will have to be decreased by 3.1 billion euro.

4. In the sphere of government expenses and in order to save 6.3 billion euro, cuts are planned in the subsidies towards the insurance funds, hospitals, universities, self-governing bodies, government structure enterprises and other institutions, as well as a dramatic decrease in the resources for health care.

5. More than 2 billion euro are expected from the administrative reform through closure of administrations, departments and services, closure or merger of state bodies, limitation of new appointments, laying off of non-regular personnel, and its inclusion in the "working reserve". Once more at the "epicentre" of cuts stands the Programme for public investments. As an employee in the Financial Ministry says, if the assimilation of resources from the European funds for the realization of a National strategic reference frame is accelerated, this will offer significant opportunities for reducing national resources.

Tags: economic crisis financial team Greek government measures cuts Troika
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