BUSINESS

Social security debts expand to almost 20 pct of GDP

ROULA SALOUROU

TAGS: Finance

The debts that 1.4 million workers, employers, self-employed and farmers owe to the social security funds have exceeded 35 billion euros, or nearly 20 percent of gross domestic product, while just one in four debt settlement plans are adhered to.

The quarterly report of the Social Security Debt Collection Center (KEAO) for the January-March period showed that the arrears transferred to the center for collection reached 35.35 billion euros at the end of March. Out of the 1.4 million debtors, 70.44 percent (1,002,170 people) have debts up to 15,000 euros each, 98,343 debtors owe between 50,000 and 100,000 euros and 1,834 debtors have dues of over 1 million euros apiece, amounting to 22.59 percent of all debts.

Ahead of the repeatedly promised arrangement of social security debts in up to 120 tranches, which will eventually be tabled in Parliament right after Easter, the debt statistics are also noteworthy because they reveal the major failure of all previous settlement efforts, with only one in four payment plans being observed by debtors. This rate is worsening by the day as debtors drop out of their settlement schemes in anticipation of the new arrangement.

The figures show that out of the 485,113 debtors who entered one of the payment plans offered, only 24.1 percent or 117,772 people continue to pay up and they will be automatically transferred to the new system, as the Labor Ministry bill provides. The majority (58.7 percent) have dropped out of their arrangements and only one in six (81,450 people) have repaid all their dues through the settlement plan offered to them.

Data also reveal that the bulk of debtors who abandoned the schemes (58 percent) had fairly reasonable tranches to pay every month, which ranged between 50 and 200 euros each.

KEAO appears resigned to the fact that the ministry’s new settlement proposal will not improve the situation as it maintains the same level of forecast revenues for this year as in 2018, at 1.36 billion euros.

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