Greece to allow pension increases from 2023, first since debt crisis- PM

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Greek Prime Minister Kyriakos Mitsotakis delivers a speech during the South East European Cooperation Process (SEECP) summit in Thessaloniki, Greece June 10, 2022. REUTERS/Alexandros Avramidis

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ATHENS, July 6 (Reuters) - Greece's Prime Minister Kyriakos Mitsotakis promised pension increases for the first time in more than a decade next year, saying Greece had definitively turned a page from the financial chaos which required three international bailouts.

During its decade-long financial crisis that broke out in 2009, Greece was forced by its international lenders to slash pensions more than 10 times to reduce state spending and meet its fiscal targets.

"Everyone must benefit from growth without threatening the fiscal balance or the country's economic competitiveness," Mitsotakis, whose term ends next year, told parliament.

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Greece's economy is seen expanding by 3.2% this year, according to the central bank which lowered a previous forecast to reflect increased uncertainty due to the war in Ukraine and inflation.

The conservative premier has been under pressure by the main leftist opposition to call an early election due to his government's handling of the COVID pandemic, inflation and soaring electricity prices which have hit households.

"Three years are enough," leader of the leftist Syriza party Alexis Tsipras told parliament. "You need to declare today ... that the country will head to elections in September".

Mitsotakis has repeatedly ruled out a snap poll and his New Democracy party is leading in opinion polls. A survey conducted by Alco polling agency for Open TV before news of the pension pledge, put the conservatives' lead at 8.5 points, while a majority of the respondents said they expected an election in September-October.

On Wednesday, Mitsotakis reflected on 2015, the peak of the financial crisis, when Greeks were queuing outside banks due to capital controls, noting the country's progress since then.

"Fortunately all this belongs to the past. Today Greece is a different Greece," he said.

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Reporting by Renee Maltezou Editing by Alexandra Hudson

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