ATHENS – Greece’s highest administrative court, the Council of State, reportedly will rule by May 11 whether the government must restore slashed pensions retroactively to 2012, a verdict that could cost 4.5 billion euros and end any hope of reaching a deal with international lenders to get critically-needed loans.
The judges have already met twice to consider an appeal by pensioners that the austerity measures imposed by a previous government were unconstitutional.
Court sources told the newspaper Kathimerini that the majority of judges are in favor of ruling that the 2012 cuts to basic and supplementary pensions were unconstitutional because they had already been cut previously.
How much a ruling in favor of the pensioners would cost is uncertain though as the court, as it has in another case involving retired university staffs, could decide that only those who appealed would get back pay, although pensions would be restored for all beneficiaries.
If the court deems that these payments should be restored and the amount deducted since 2012 paid back, it could cost the state as much as 4.5 billion euros. However, it is possible that the amount due could be lower if the court decides that only the pensioners who have appealed against the cuts should also receive back pay.
Meanwhile, the coalition government led by Prime Minister and Radical Left SYRIZA leader Alexis Tsipras is locked in talks with the troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) over undone reforms blocking the release of a 7.2-billion installment.
The government hopes to reach a deal with the troika to unblock the aid and to help jumpstart a recovery that had been looming before SYRIZA won the Jan. 25 snap elections on a promise to reverse austerity measures.
After raiding the spare cash funds of cities and towns and state entities to pay pensioners and salaries at the last minute at the end of April, the government now has ironically directed state pension funds to turn over their time deposits in the Bank of Greece, some 290 million euros, so that it can pay a pending IMF loan installment.
That puts Tsipras in the precarious political position of being a far-leftist who vowed to pay salaries and pensions now taking pension funds to pay the banks, antithetical to his principles and political stance.
The government has asked the Bank of Greece to waive its penalties for taking money out of time deposits so the social security funds wouldn’t be penalized for giving their money to the government, ostensibly on loan but with no guarantee of being repaid as the country is running out of money and heading for a possible default.
PENSIONERS AREN’T HAPPY
SYRIZA, which had led the vehement opposition to previous governments, now finds itself under assault from critics angry it is going after public funds to accommodate the troika, which it said it never would.
On April 30, a meeting of the state’s Social Security Foundation (IKA) was invaded by a group of Communist Party-affiliated PAME unionists. Earlier a number of IKA pensioners had staged a protest outside the fund’s Omonia offices with the same demand to leave their money alone.
The board of the Farmers’ Compensation Organization (OGA) agreed to turn over 50 million euros, while another 100 million will be handed over by ETAA, the fund of the self-employed. Some 50 million will be delivered by the Seamen’s Fund (NAT) and 20 million by the Civil Servants Fund.
By May 12, the government will have to pay the IMF 890 million euros, which has not yet been collected, while the funds needed for the payment of May salaries and pensions aren’t available yet, leaving workers and pensioners uncertain as to whether they’ll be paid as their money is being turned over to the creditors.
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