Employers agree to pay higher contributions, boosting confidence ahead of troika talks

TAGS: Politics, Economy

The government Thursday acquired its first real ally in its proposal for pension reform after representatives of employers’ associations agreed with a suggestion that they pay increased social security contributions in a bid to avert further pension cuts.

The representatives of the employers’ groups signaled their backing for the government’s proposals following a meeting with Prime Minister Alexis Tsipras. Sources close to the premier expressed satisfaction at the development, claiming that it strengthened the government’s position ahead of negotiations with representatives of the country’s creditors who are due in Athens next week.

The fact that Greek employers have agreed to pay a one percentage point increase in their contributions to social security funds is a significant win, government sources indicated, as it will undermine the objection that creditors are expected to underline: that higher employer contributions will burden businesses that are already struggling. It appears that Greek employers, or at least the groups that represent them, are prepared to shoulder the additional cost to boost the government’s dual aim of bolstering the social security system and averting yet another round of cuts to pensions.

Winning the support of employees – who also face a 0.5 percentage point increase in the contributions they pay, according to the government’s proposal – is likely to be a bigger challenge. GSEE, the union representing Greek private sector workers, was the first to criticize the government’s pension proposal last week, speaking of “slaughter” and “looting.”

There are fears in the ranks of the government of a new round of protests. The civil servants’ union ADEDY and the Communist Party-affiliated union PAME are to hold protests outside the Labor Ministry in Athens at noon Friday.

The government also continues to face strong resistance from its political rivals. Despite the negative climate, government spokeswoman Olga Gerovasili Thursday made another overture to opposition parties, inviting them to a “constructive dialogue of national importance for the final drafting of the pension reform.”