Greek court challenges pension reform plan

ATHENS Thu Nov 1, 2012 11:33am EDT

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ATHENS Nov 1 (Reuters) - Greek pension reform demanded by foreign lenders may be unconstitutional, a Greek court ruled on Thursday, in a setback to the government's efforts to seal a deal on an austerity package needed to secure aid.

The Court of Auditors, which vets Greek laws before they are submitted to parliament, said measures such as increasing the retirement age by two years to 67 and cutting pensions by between 5 and 10 percent could be against the constitution.

The court said cutting pensions for a fifth consecutive time since the country's first bailout in May 2010 violated a string of constitutional provisions.

Greek lawmakers, who are expected to vote on the cuts next week, may disregard the court's opinion. But ordinary Greeks could still cite the ruling to fight pension reform in court, making it difficult to implement even if legislated.

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