Home > News > Newsmakers > Greece Nixes Pension Reductions, Seen as Too Draconian
Newsmakers

Greece Nixes Pension Reductions, Seen as Too Draconian

As the European Commission approves the move, parliament calls off the trims, slated for 2019.

By Chris Butera

Greek policymakers axed plans to slash state pensions scheduled to occur on January 1 as the left-led governing coalition looks to gain support ahead of 2019’s general election.

The plan, nixed on Tuesday, would lead to an estimated cut of about 1% in Greece’s annual GDP.

The European Commission agreed with parliament’s move, as the original plan would have cut at least 14% of the monthly retirement benefits of 1.4 million people, or 53.8% of all Greek pensioners, according to the commission’s estimates.

The latest (and presumably final) bailout, worth up to €86 billion ($97.8 billion), expired in August without help from the International Monetary Fund. Greece said it would keep demanding fiscal prudence, so lenders would relax their repayment terms on current loans.

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Lenders also agreed that pension cuts were not needed for a balanced budget.

“The time has come for people to be rewarded for their sacrifices,” Prime Minister Alexis Tsipras, whose term ends next year, told lawmakers prior to the vote. Tsipras said the clawback was a “necessary breath for the people of labor … who saw their pensions and their dignity hurt,” Reuters reports.

Greece has received three international bailouts worth nearly €290 billion since 2010 to prop up its tanking economy. To make sure the nation can hit its post-bailout targets looking to keep future high-budget surpluses, the IMF and its eurozone partners are keeping a close eye on the country.

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Home > News > Newsmakers > Canada’s Machin Staying the Course with China Despite Tension
Newsmakers

Canada’s Machin Staying the Course with China Despite Tension

Pension board CEO says it will stay cool-headed amid Beijing’s threats over Canadian arrest of tech heiress.

By Chris Butera

Geopolitical tension with Beijing isn’t changing Canada’s largest public pension fund ‘s investment decisions regarding China, according to Mark Machin, head of the $276 billion Canada Pension Plan Investment Board (CPPIB).

On December 1, Meng Whanzhou, chief financial officer of Huawei Technologies, was arrested in Canada, for extradition charges from the US. In response, China threatened Canada would face severe consequences if she was not immediately released. 

Whanzhou was released on a $10 million bail on Tuesday. The US says the tech heiress allegedly covered up Huawei’s ties to a shell organization selling materials to Iran despite trade sanctions.

“There’s a lot of rhetoric always around these situations,” Machin told Reuters. “If we cut aside all of the rhetoric, I think China will take a mature, cool-headed attitude toward pragmatic negotiations, so we won’t get too much wild action.”

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The Canada pension board has an 8% allocation to China and plans to raise its stakes in the coming years. 

Machin, who has 20 years of investment banking experience in China and formerly headed the board’s Asia business, said the fund will continue “engaging and deploying” capital in the nation.

This week, Michael Kovrig, an employee with the International Crisis Group and former Canadian diplomat, was arrested in China. While it is not clear if this is a tit-for-tat over the Whanzhou incident, Kovrig’s detention has created speculation.

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