By John Hadoulis (AFP) – Feb 9, 2010
ATHENS — Greece's government on Tuesday unveiled a hike in the average retirement age and called on striking civil servants to accept bonus cuts to pull the country out of an unprecedented financial crisis.
Labour Minister Andreas Loverdos said men and women will retire at 63 on average in a bid to save Greece's cash-strapped pensions system, as other ministers met for a second day to finalise the country's new tax policy.
"There will be a two-year increase of the limits on the average rate of retirement... namely 63 years on average for men and women by 2015," Labour Minister Andreas Loverdos told reporters after a ministry meeting.
"We are changing the pensions system in order to keep it alive," he said.
The maximum retirement rate is currently 65 for men and 60 for women, and Greece is under pressure by the European Union to bridge the gap.
The minister also pledged to bring an end to voluntary retirement schemes that have cost the cash-strapped state dearly.
The pension reform is part of a cost-cutting plan by Greece's hard-pressed Socialist government which is struggling to slash a debt mountain expected to hit over 290 billion euros (396 billion dollars) this year.
Loverdos is trying to save 4.5 billion euros (six billion euros) this year from a social budget burdened by years of mismanaged spending by social funds on medicine and hospital bills.
Greece's main private sector union GSEE is staging a nationwide strike on February 24 in opposition to the pension reform. Thousands of civil servants targeted for bonus cuts are holding another one-day strike on Wednesday.
GSEE chairman Yiannis Panagopoulos on Tuesday said the minister's statements were "vague" as they made no reference to the maximum age of retirement.
"When the government presents its full proposals in a bill, we will discuss them and fight to improve them if necessary," he told private Flash Radio.
But he welcomed the scrapping of voluntary retirement schemes, saying it was "provocative to have miners crawling into holes at the age of 65 and to see other categories retiring after 25 years of work."
The government is trying to prevent this month's industrial action from undermining efforts to jumpstart the recession-mired economy.
The cabinet is meeting for a second day Tuesday to finalise a tax overhaul aimed at netting around five billion euros this year and help plug a budget deficit that hit over 30 billion euros in 2009.
Greek Prime Minister George Papandreou late Monday asked civil servants to accept bonus cuts saying they "must be the first to set an example."
Wednesday's civil servant strike will paralyse ministries, local administration and tax offices. Air traffic controllers are also joining the protest.
Greece's 12.7-percent deficit is beyond EU limits of three percent of output for eurozone members, and it suffered a triple downgrade of its sovereign debt in December.
Despite assurances from the European Union and the European Central Bank, markets suspect that the government will not be able to enforce the painful reforms promised.
Socialist cadres are already expressing misgivings about the plan according to press reports, but a majority of Greeks appear to support the government.
The European Commission last month rubber-stamped a three-year Greek crisis plan presented by the government.
But the European Union executive arm also placed Greece under a permanent system of monitoring -- a first for the EU -- and rapped Athens over faulty budgetary data tabled by the previous conservative government ousted in October.
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