Evaluating the results of the government's negotiations with the creditors so far, Minister of State Nikos Pappas on Tuesday told the radio station 'Sto Kokkino' that "an important step had been made" and that the government was continuing the struggle. He stressed that the agreement that Prime Minister Alexis Tsipras brings to Parliament for ratification will be supported by the current ruling majority.
Pappas also highlighted the government's success in getting creditors to agree to a lower primary surplus targets than those initially agreed to by the previous governments
"This story began with the Greek commitment for surpluses of 3 pct [of GDP] this year and 4.5 pct in 2016. And we are now at a surplus of 1 pct for this year and 2 pct for 2016. This amounts to 4.5 pct of GDP, or roughly eight billion euros.
If we had a Samaras government right now, with his talent and his target-obsession,for considering cuts to low incomes as a measure for growth, the bill would be close to 10 billion for wage earners and pensioners," Pappas said.
He noted that the original demands of the institutions had included a zero deficit clause for pensions, abolition of the EKAS low-income pension benefit, the implementation of mass layoffs and meeting targets by further slashing wages and pensions.
Since Monday, the Greek proposals, which called for meeting the institutions' targets by transferring the burden to people better able to pay, had been described as a "positive step" and a basis for talks, he added.
Regarding the increase in employer contributions, he noted that the country's social insurance system had a huge problem as a result of the PSI debt haircut, which had destroyed the funds' cash reserves, as well as the demographic issues caused by an ageing population.
"Whatever state we were in, we would be obliged to reform our social insurance system. There are two ways of doing this:
either you lower pensions and benefits, or you increase contributions. We said we would support our social insurance system by increasing the contributions of those that can, because we are against recessionary measures like pension cuts."
He also appeared confident that when the agreement was brought to Parliament, it would be supported by the current Parliamentary majority, noting that Alexis Tsipras would not agree to become prime minister of a mismatched collection of forces under supposedly emergency conditions. "Tsipras will not become Papademos," he stressed.