Embattled Greece and Spain paved the way for a fresh crackdown on pension benefits today in a bid to satisfy international lenders.
Greece, locked in talks with the troika of the European Union, International Monetary Fund and European Central Bank over securing the next €31.5 billion (£25.2 billion) tranche of its €130 billion bailout, was said to have agreed to raise the pension age to 67.
Greece has to find €11.5 billion in spending cuts to secure funds.
Meanwhile Spanish prime minister Mariano Rajoy, struggling to avoid an international rescue which many analysts regard as inevitable, hopes to save up to €4 billion (£3.2 billion) a year through a freeze in pension payouts and speeding up a planned raising of the country’s retirement age from 65 to 67.
Rajoy — who had already been forced earlier this year to break election campaign pledges — has repeatedly pledged not to touch pensions, but he has few options left to trim Spain’s budget. The pension reforms, which could be announced as soon as next week along with the budget, would send a strong signal to investors that Spain is serious over deficit reduction.
Previously bailed-out Greece, Ireland and Portugal all had to pass steep cuts in pensions, with Athens forced to slash retirement benefits by as much as 40%. This has led to nationwide demonstrations.
