Greek races to ax pension cuts days before implementation

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European Commissioner for Economic and Financial Affairs Pierre Moscovici, left, speaks with Greek Finance Minister Euclid Tsakalotos during a round table meeting of eurogroup finance ministers at the Europa building in Brussels, Monday, Dec. 3, 2018. Eurozone finance ministers meet in Brussels on Monday to discuss the standoff between Italy and the group over its spending proposals for the 2019 budget. (AP Photo/Olivier Matthys)

Greek lawmakers have agreed to fast-track draft legislation to cancel a major round of pension cuts scheduled to take effect on Jan. 1, after bailout lenders agreed they were no longer needed for the country to balance its budget.

A parliament committee voted Thursday to debate the amendments as emergency legislation, canceling articles in a law voted last year that would impose cuts worth 1 percent of Greece's gross domestic product.

According to European Commission estimates, the measures would have seen 1.4 million out of Greece's 2.6 million pensioners suffer a monthly loss of at least 14 percent.

Greece emerged from its third successive bailout program in August but has pledged to pursue strict fiscal policies for years in exchange for a promise by lenders to provide better repayment terms.

A key post-bailout target agreed between Athens and lenders is maintaining a primary surplus — the annual budget balance before debt-servicing costs — of at least 3.5 percent.

A report by bailout monitors last month said that Greece remains on track to meet that target, a conclusion endorsed by Eurozone finance ministers at a meeting this week.

"We support the decision not to proceed with the pre-legislated pension cuts which are not needed to ensure the long-term sustainability of the pension system or in order to reach next year's primary surplus target," European Union Finance Commissioner Pierre Moscovici said after the meeting.

He described the measures as "unfair at their conception," referring to the rift between European creditors and the International Monetary Fund, which had backed tougher measures before the bailout ended.

The decision to shelve the cuts was a boost for the government of left-wing Prime Minister Alexis Tsipras who, according to several recent opinion polls, is trailing opposition conservatives by double digits ahead of a general election that must be held by next fall.

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Raf Casert contributed from Brussels. Follow Gatopoulos at https://twitter.com/dgatopoulos