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(Reuters) — A top Greek court ruled Wednesday that the government should reverse cuts to private sector pensions it made in 2012 as a condition of its bailout agreement with the European Union and International Monetary Fund, court officials said.
Greece has implemented waves of pension cuts since 2010 as part of austerity measures agreed with its international lenders to put its finances back on track.
Creditors' demands for yet more pension cuts are a major sticking point as Athens tries to reach a deal with the E.U. and IMF over unlocking remaining bailout funds so that it can avoid defaulting on its debts.
The country's top administrative court, the Council of State, ruled that the 2012 cuts violated Greek law and the European Convention on Human Rights because they deprived pensioners of the right to a decent life.
The ruling, which does not cover the public sector, added that the Greek government should provide aid to pension funds should they lack the finances to pay the pensions — even though Athens agreed with the lenders in 2010 that this would be forbidden.
The new leftist-led government of Prime Minister Alexis Tsipras has promised to roll back austerity and reverse some wage and pension cuts.
The court said pension cuts in 2010 and 2011 were not unconstitutional since they were implemented under "extraordinary circumstances."
A finance ministry official who spoke on condition of anonymity said Greece could not estimate the fiscal impact of the measure before it was officially informed of the ruling.
Last year, the same court struck down wage cuts imposed by the government in 2012 on the police and armed forces to comply with the terms of the country's bailout program.
A strike by Greece's General Confederation of Greek Workers and Civil Servants' Confederation has led to the cancellation of hundreds of flights, while also affecting local transport in the country, reports Reuters.