The Greek government will reportedly cut pensions by up to 1 per cent in 2019 as part of an EU bailout deal, Reuters has reported.

Reuters said officials told them about the cut on condition of anonymity. It is part of an agreement reached by Greece’s lenders on labour reforms, spending cuts and energy issues.

It is hoped a deal will be reached before a meeting of Eurozone finance ministers on April 7.
The negotiations, which have dragged on for several months, have focused on pension cuts, energy and labour reforms. Last month, the Greek government agreed to adopt measures worth 2 per cent of GDP to help convince the IMF to participate in the bailout.

In addition, lowering the tax-free threshold to save roughly another 1 per cent of GDP has also been agreed, an EU official said."I believe there will be a staff level agreement by the April 7 Eurogroup," one of officials told Reuters.

However, as part of the agreement, Greece will not be forced to liberalise mass layoffs further, as initially demanded by the IMF, the official said. Collective bargaining, which was weakened as part of bailout reforms in 2012, is expected to be revived after the country's current bailout programme expires in 2018.

Finance Minister Euclid Tsakalotos has said that a deal on the second review of bailout progress will pave the way for crucial talks on debt relief in the medium-term, which will help the country return to debt markets before its bailout expires.

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