By N. Bellos
Although the issue of suspending a scheduled pension reform, set for January 2018, was not discussed at Monday’s Eurogroup meeting in Luxembourg, subsequent statements by top Eurozone leaders nevertheless yielded optimism that the standing Greek request may be approved.
According to reports citing top European officials, the latter apparently agree with Athens’ position that another round of pension cuts is not a structural reform, but a fiscal measure.
That position, if publicly confirmed, directly clashes with the IMF stance, as the Fund considers the measure as structural, i.e. as significant for ensuring that the country’s social security system is viable in the medium term.
The Greek coalition government has repeatedly and very publicly stated that if annual primary budget surplus targets are being achieved – or exceeded, in Greece’s case – then the already legislated austerity measure is unnecessary and an impediment to growth.
Moreover, the tabling of the 2019 draft budget in Greece’s Parliament on Monday with two “scenarios” – one with the pension cuts, and the other without – also appears to have come in consultation with European officials, which praised the development.
As previously reported, the crucial period for the Greek request begins after Oct. 15, the deadline for submission of 2019 draft budgets by EU member-states.
Commission services will subsequently review the draft budgets, whereas a final decision over the Greek request is possible by a Dec. 3 Eurogroup meeting.
Asked specifically about the looming measure, Eurogroup president Mario Centeno echoed Athens’ position, saying it was not structural in nature, as previous pension reforms had been taken. He maintained it was a fiscal measure, after all, with Greece’s finances now in much better condition than when the cuts were decided 18 months ago.
EU Commissioner Pierre Moscovici, among Athens’ most ardent supporters in Brussels, said European institutions will examine the request as part of ongoing dialogue with the Tsipras government.
Finally, ESM Managing Director Klaus Regling said inclusion of both options in the draft budget was positive development, adding that discussions with the Greek side over the pension issue will continue until a decision is made.
