Wages, pensions, benefits and public-sector workers are among the biggest casualties of a long-expected austerity package, which was tabled in Parliament on Monday as a 600-page draft bill with all the new measures contained in just one article.

The new 2013-2016 Medium-Term Fiscal Strategy abolishes all extra bonuses to pensions and civil servants, introducing new pension cuts of up to 25 pct, while at the same time cutting special payrolls (police, judiciary, military officers, state hospitals’ medical staff, university educators, diplomats) by up to 27 percent, as well as paving the way for the redundancy of 2,000 civil servants and the abolition of state-allocated social benefits – to be replaced by benefits depending on income criteria.

LABOUR REFORMS

Specifically, the package envisages the abolition of all extra wage payments to public sector workers, introducing a 3 to 27 percent retroactive cut in special payrolls, freezing – from January 1, 2013 to the end of 2016 – payment of all target-related incentives to public sector workers; setting a 1,900-euro ceiling for wages of all employees in agencies and organisations in the general government; slashing remuneration to employees in municipal or regional authorities, as well as further cuts in wages of ministry employees.

Under the draft legislation, pensions in the private sector will be cut by up to 25 pct, in tandem with the raising of the retirement age by two years; abolition of extra pension bonuses to public sector pensioners; introduction of stricter rules for allocation of pensions to the spouses of deceased pensioners; abolition of pensions for Parliament deputies or municipal authorities elected under the new law.

The package also imposes income criteria for the allocation of family benefits.

The draft law envisions changes in previously rigid public sector labour relations, among others, allowing for public sector employees whose organisations, agencies and entities have been abolished to either be fired or transferred to other state agencies or organisations.

The government expects at least 2,000 employees to be included in such a programme this year as part of a commitment to reduce the public sector workforce.

The austerity package, mostly pension and wage cutbacks along with tax hikes, also foresees measures to fully liberalise certain professions and service markets, such as auditors, mini-van tourist services by hotels, tobacco product vendors, baby milk sales, accountants, private education, dental technicians, newspaper/magazine vendors, truck leasing services etc.

HEALTH CUTS

Health and healthcare are among the areas hardest hit by new austerity cuts, with patients called to pay more out of pocket for hospitalisation, drugs and even prescriptions.

The new measures tabled in Parliament introduce a 25-euro fee paid by the patient for admission to a state hospital from 2014 onward, an extra euro for each prescription issued by the national healthcare system EOPYY and a post-purchase 5 percent rebate for expensive medication on the list of law 3816, regardless of whether the necessary paperwork is submitted in advance.

Patients will also have to deal with a new prescription system, where 85 percent of drugs will have to be prescribed by naming their active ingredients or chemical name rather than a specific brand name. This measure aims to increase the use of cheaper generic medication and reduce the total pharmaceutical spend but is strenuously opposed by many doctors, who feel it constrains their ability to select the appropriate treatment for their patients.

Under the system, patients will be covered for the cost of the cheapest generic drug in the category of their prescription and will have to cover any additional cost above that from their own pocket.

The omnibus bill also contains a number of other measures designed to roughly halve the monthly budget for pharmaceuticals and have pharmaceutical companies and pharmacies carry a greater proportion of the costs.

The Hellenic Medical Association, in an announcement, claimed that measure would fully disrupt medical practice with uncontrolled consequences for the population’s health and aimed to ensure big pharma’s monopoly of the Greek market, leading to the destruction of the local pharmaceutical industry.

DEMOCRATIC LEFT

Labour Minister Yiannis Vroutsis on Tuesday criticised the Democratic Left for refusing to support the austerity package due to the party’s objections to proposed labour reforms. According to the minister, the party’s objections were not justifiable because if the government failed to pass the omnibus bill, “there will be no jobs to talk about”.

Vroutsis stressed that the government had averted changes such as further reductions to the minimum wage, which would remain at 586 euro per month until 2016, as well as protecting the 40-hour working week, insisting that labour issues would not stand as an argument for voting against the total package of measures.

Democratic Left, the smallest of the three parties supporting the coalition government, has balked at voting for the proposed changes to labour law and announced that its MPs will vote ‘present’ when the time comes. The two remaining parties in the coalition government, New Democracy and Pasok, control 158 seats in the 300-seat Parliament.

Source: Athens News/dv, AMNA