Greece’s top administrative Court Council of State ruled out on Wednesday that the pension cuts of 2012 imposed by the Troika were against the Constitution. The court ruling followed a massive litigation by individual pensioners and pensioners’ associations from the country’s private sector.
The Council of State ruled that the pension cuts were against the Greek Constitution and the Human Rights Convention of the European Union for “depriving pensioners of the right to a descent life.”
The ruling allows more than 800,000 pensioners insured at the country’s biggest private sector fund IKA as well as former workers at utility companies and the banking sector to receive 5%-15% hikes.
The cuts imposed 2012 to pensioners receiving main pension and supplementary pension totaling of more than 1,000 euro as were follows:
cut 5% for pensions €1,001 – €1,500
cut 10% for pensions €1,5001- €2,000
cut 15% for pensions over €2,001
The court decision is a challenge for the Greek government struggling to reach a deal with the country’s creditors who demand among others also further cuts in pensions.
The new hikes are estimated to burden either the state budget or the pension funds with €1.022 billion. Speaking to Reuters, a finance Ministry source said the the fiscal impact of the court decision could not estimate before the ministry was officially informed of the ruling.
Entitled to retroactive payments since 2012 are the more than 2,000 pensioners who had filed a legal lawsuit as well as 15 pensioners who participated in the pilot trial.
The court ruled that the pensions have to be reversed to the levels of 2012. These cuts were imposed after the second Memorandum of Understanding and followed cuts of 2010 and 2011. According to some legal consultants, the cuts of 2012 “were the 5th in the row” after four previous cuts in 2010 and 2011. The pension cuts of 2012 were “unfair and exhausting” they told to Greek media.
At the same time, the court ruled that the pension cuts of 2010 and 2011 were conform with the Constitution as they were imposed due to “extraordinary circumstances,” that is due to the first Memorandum of Understanding with the Troika of IMF, EU and ECB.
The Finance Ministry sources reportedly commented on the ruling that “that the court decision will be respected according to the financial possibilities.” an official statement and decision is expected once the Court ruling is been officially published.
General Secretary of Social Security Giorgos Romanias told Mega TV on Thusrday morning that “the hikes will be gradual” and according to “the budget possibilities.” he estimated the cost from the hikes at half a billion euro and said that they will not be given retroactively.
A general reminder: Greece pension funds suffered losses of 8 billion euro due to the PSI of March 2012.
That’s fine to secure 5% -15% hikes to middle-class pensioners of €1,000 – €2000+ per month so that they have “a right to a descent life.” But how about the thousands of older generations of low-pensioners of €600 – €700 who had their life-saving 13th and 14th pension cut as of 2011? Horizontally and without exception?
Before the elections and after it took power, SYRIZA had promised to restore the 13th pension (Christmas bonus pension) for those pensioners with below €700 per month. The measure was promised to be implemented December 2015 but the country’s creditors have doubted it could be implemented due to the financial situation, some government officials had examined the option to postpone the 13th pension for December 2016.
Alternate Minister for Social Security Dimitris Stratoulis had vehemently rejected any postponement and said end of May that “the 13th pension will be paid in December 2015, once Greece has managed to achieve the target [KTG note:with the creditors] for low Primary Surplus.”
I suppose that if the government can find 500 million to 1 billion euro to pay the unconstitutional pension cuts of 2012, it can squeeze some more stones to find a solution for the low-pensioners.
Just for the sake of social cohesion and fairness 🙂
PS As a pensioner I could have a very very descent life indeed even if with just €2,000 per month… Note: KTG is not a pensioner.