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Δευτέρα, 20 Μαρτίου 2017 18:33

Social security spending in Greece now at roughly 29bln€; cuts of 2.2 bln€ eyed

Greece's closely scrutinized spending for all types of social security benefits now hovers at between 2.3 to 2.4 billion euros per month, or up to 29 billion euros on an annual basis.

By T. Tsiros
ttsiros@naftemporiki.gr

Greece's closely scrutinized spending for all types of social security benefits now hovers at between 2.3 to 2.4 billion euros per month, or up to 29 billion euros on an annual basis.

As such, a proposed target of slicing off 2.0 to 2.2 billion euros from the annual outlay means a reduction in benefits, per pensioner, of 6 to 7 percent, on average. If the annual tax-free income threshold is also lowered, as per creditors' standing demands, then the monthly reduction felt by pensioners in their wallets will be even greater.

Nevertheless, one large bloc of pensioners in the still recession-bound country, roughly 650,000 to 700,000 beneficiaries -- the majority of whom are seniors -- receive 300 to 550 euros a month in benefits. As such, the leftist Greek government is trying to desperately exclude lower-income pensioners from proposed cuts. That prospect, however, will mean greater average reductions for remaining castes of retirees -- many of whom forked over the maximum level of social security contributions envisioned in previous decades.

At the 700-euro "cut-off" point, an average reduction of 10 percent per pensioner will be needed to reach 2.2 billion euros in annual savings. The impact will be even greater if the threshold is moved up to the "comfortable" - by Greek standards - 1,000 euros per month in social security benefits.

With an eye on its ever-shrinking popularity in the polls, the leftist-rightist coalition government in Athens is desperately trying to cut the annual expenditure for social security over a three-year period, instead of as a "one-off" austerity measure.