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Pensions Reform simplified: The IMF wants 15% cut to all pensions

Amid EU’s threats of Schengen expulsion… here comes the International Monetary Fund and jumps in the Greek issues with revolutionary ideas. No, the IMF’s concept has nothing to do with the Refugee Crisis but with the Greek debt numbers and the other big topic, this of Pensions Reform.

The IMF believes that the Greek proposal on Pensions Reforms does not save enough and that the solution is to cut pensions at 15%.

Citing sources close to Greek-creditors negotiations, the Huffington Post writes:

“The IMF has indicated it will resist the Greek government’s plans to achieve required pension savings partly through an increase in employer contributions, according to a source close to negotiations between the Greek government and official creditors. Instead, the source said, the IMF believes pension savings targets can only be reached through pension cuts of 15 percent, on average.”

The IMF has not denied the source claims and officially the IMF is still evaluating the Greek proposal.

The former IMF’s responsible for the Greek program, the neo-liberal Mr Poul Thomsen, is apparently the driving force of the 15% pensions cuts.

“The IMF’s intransigence is reportedly driven by the Fund’s European director, Poul Thomsen, who has long had a tense relationship with the Greek government. Thomsen is a close ally of Wolfgang Schaüble, Germany’s hard-line minister of finance.

“That Thomsen is playing a not-so-constructive role is the least one can say,” the source told The WorldPost. “This position of the IMF is puzzling, and they clearly want to either leave the program or blow the whole thing up.”

Although the IMF has yet to officially object to the Greek government’s plan, the source said, “it is arguing that the contribution increase will make Greece’s economy less competitive,”  the Huffington Post added.

Well… well…well… it is the social security contribution increase that will make Greek economy less competitive and not the changes in the taxation system on yearly basis or the high Value Added Tax even in a package of packed chicken wings.

I suppose, here is the crucial point when the chicken start to laugh with or without wings…

The IMF has said in the past that it has made erros in the Greek Adjustment Program. Apparently the IMF is much too proud to correct these mistakes.

Yes, the high civil servants and state enterprises pensions especially for those in early retirement should be cut down. But the IMF does not stick to such finesses. It would want cuts for all – as it has happened several times since 2010.

PS yes. why bother calculate social security contributions discounts for young professionals and income criteria? Take a red pen, a piece of paper and score through.

This does not mean that I fully agree with the Greek proposal, right? A lot of things and funds overhauls need to be done, staring with the troubled OGA, the social security fund for farmers – and not farmers.

The problem with the IMF’s ideas is that the word “reform” is an euphemistic expression for austerity cuts till all Greeks have income and pensions around 500 euro. then the real competitiveness will come 😛

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One comment

  1. Not 500 euros ktg, remember Germany will only invest in Greece when everything is at 320 euros, as stated by the German gov agency Federation of Industry back in June 2012….of course Germany might be too busy by that point with its accumulating problems – they’re paying a high price for being Puppet in Chief of Euroland.