Green light from Brussels for government to scrap pension cuts

The Eurogroup Working Group (EWG) today approved the government’s request to scrap legislated pension, at a Brussels meeting in which Greece was represented by Alternate Finance Minister Yorgos Houliarakis.

Journalists covering the European Commission reported that the discussion at the EWG meeting concluded with no objections to Athens’ proposal or to the subsequent recommendation of creditors.

That means that the final state budget will be drafted without a provision for pension cuts, given the fact that a projection of a 3.5% primary surplus in 2019 was ensured.

The recommendation of the European Commission stated that Greece will reach its 3.5 percent of GDP primary surplus target even without the pension cuts, and none of the member states expressed any objections.

The Eurogroup will be briefed on Monday, 19 November, and will give its approval for Finance Minister Euclid Tsakalotos to submit a final budget without the cuts.

The implementation of the budget was particularly important in arriving at the decision. The numbers, and provisional data released a day before the EWG meeting on the execution of the budget in October, 2018, also played a role.

Greece has overreached the primary surplus targets for three consecutive fiscal years.