A Promise to protect..................
A Promise to Protect Pensions Will Test Greece’s Red Line on Austerity
Published: September 18, 2013
(Page 2 of 2)
Mr. Vroutsis, the labor minister, acknowledged over the summer that the country’s pension system was “not viable” and “in need of a fundamental overhaul.” Among the proposed measures is the creation of an electronic system for employers to declare their contributions. An estimated half-million self-employed Greeks are thought to be illegally avoiding their obligation to pay into the system.
At the same time, a crackdown on social security fraud — a problem considered as pernicious as the country’s widespread tax evasion — has seen some results. A unified payment system started operating in June and identified at least 50,000 false claimants, many of whom had been collecting the pensions of dead relatives for years.
“In a short period of time, we managed to put sturdy foundations in an old and rotten structure,” the Labor Ministry’s general secretary, Panagiotis Kokkoris, said.
While larger countries in the euro zone with debt problems, including Spain and Italy, have also cut benefits, the impact of the changes has been less acute than in Greece, where three years of austerity measures have deepened a recession and brought political and social upheaval.
The Greek pension problem is expected to be on the agenda next week when officials from the European Commission, the European Central Bank and the International Monetary Fund meet in Athens. Other points of discussion are expected to include additional forced transfers and layoffs in the Civil Service, lagging tax collection and a slow-moving privatization drive. Hanging over the meetings is that 11 billion euro funding gap, which could necessitate another bailout, albeit one much smaller than the previous two.
Despite the bleak numbers, Greece is predicting a primary surplus — revenue not counting debt payments for this year — chiefly because of a boom in tourism.
Prime Minister Antonis Samaras pledged last week to give 70 percent of any surplus to pensioners on low incomes, but political opponents accused him of making false promises.
Already, pressure is building on Mr. Samaras’s fragile coalition government. Teachers, hospital staff and other civil servants, as well as lawyers, are on strike this week.
“Pensions are the easy target,” said Mahi Triantafyllou, a 58-year-old high-school teacher, at one protest. “They’ll hit us again.” NEW YORK TIMES
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