Cutting pensions is a red line for us, Greek labor minister Katrougalos says
ATHENSFeb 25, 2016 - 12:00 am GMT+3
Feb 25, 2016 12:00 am
Greece's left-led government will not cut pensions again even if its international lenders demand it, the country's labour minister told Reuters on Thursday, saying the income of the weak will be protected.
Athens remains determined to implement existing bailout reforms it has signed up to, however, George Katrougalos said in an interview.
Hanging onto a fragile parliamentary majority, the government wants to conclude its first progress assessment on fiscal targets and pension and tax reforms in order to start talks on debt relief - something it hopes will persuade angry Greeks that their austerity sacrifices are paying off.
But International Monetary Fund projections for a wider than expected fiscal gap - seen at 5 percent to 7 percent of gross domestic product by 2018, according to sources close to the lenders - have fuelled speculation Athens may come under strong pressure to slash pensions again.
Katrougalos dismissed such projections as "unreal" and said he hoped the issue would not be brought up during a bailout progress review with lenders, which he expected to resume "most likely next week" and be wrapped up "within March".
"We hear things, sometime extreme, through leaks about the IMF which I hope won't be brought to the negotiating table," he said.
"Cutting pensions is a red line for us," he said adding that more than half of Greece's households relied on a pension to make ends meet.
Asked whether Athens would stick to this if the conclusion of the bailout review was at risk, he responded: "It wouldn't be a red line otherwise."
Greece has cut pensions 11 times since it signed up to its first European Union/IMF bailout in 2010, attempting to plug fiscal holes and revamp a fragmented pension system which helped plunge the country into its worst debt crisis in decades.
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Research Associate at Center for Islam and Global Affairs (CIGA) at Istanbul Sabahattin Zaim University