Wednesday, May 26, 2010

Greece Tries to Re-Negotiate Fake Bailout

Reuters reports:
Greece is trying to renegotiate the terms of a drastic pension reform required under the terms of an economic rescue deal agreed this month with the EU and the IMF, senior government officials said.

In the first sign of glitches over the 3-year bailout plan, officials said they wanted the EU and IMF to agree full pensions should be payable after 37 years of contributions instead of 40, as set out in the deal, and allow the reform to be implemented later than foreseen.

"The (EU/IMF) memorandum will be implemented but I want to have the option to negotiate to the end," Labour Minister Andreas Loverdos said in a television interview. "I'm fighting for this, I'm not saying I will win."

Greece needs to comply with the memorandum to receive quarterly aid instalments from its international backers, and faces a tough battle if it insists on re-negotiating conditions it must meet under the 110 billion euro ($135.1 billion) deal.

Pension reform is a crucial performance benchmark for the debt-choked country under the EU/IMF plan, and any problems over this could raise doubts about the government's resolve to carry out the harsh austerity programme...

Centre-left daily To Vima said Loverdos was "bluffing" and would not be able to renegotiate the terms of the deal. "The Labour Minister's statements that he is in negotiations ... over pensions are creating confusion," the paper said.

The European Commission sent Greece a letter to remind it to stick to the terms of the deal regarding the pension reform, a spokesman for the EU executive said on Tuesday.

Greece will provide visiting EU and IMF inspectors with an actuarial study on Friday and hopes it will help convince them to water down the terms of the deal, including implementing the pension reform fully in 2018 rather than 2015.

The draft pension bill allows retirees to draw a full pension after 37 years of contributions, three years less than set out in the bailout deal, but gives incentives for workers to work 40 year

"We say yes to the age limit of 40 as mentioned in the memorandum and we respect it, but we somehow interpret it differently," Loverdos told Mega TV late on Tuesday.

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