Social security taboo stands firm

New Democracy, pounded by PASOK and unions, says no change to retirement age and payments

Greece's great structural problem of the need for social security reform became the central issue of the March 7 elections yesterday, not because of any necessary debate on the issue but in the desperate efforts by the opposition New Democracy party to distance itself from the suggestion that it would do anything to harm workers' interests.

The conservatives' economic platform, which party leader Costas Karamanlis made public on Tuesday, refers to the adaptation of the social security reforms that a New Democracy government had carried out in 1990-1993. This was immediately seized upon by the ruling PASOK party, by union leaders (even some belonging to New Democracy) and many news media, which launched a concerted attack on the opposition party, saying that it aimed to increase the retirement age and decrease pensions.

The intensity of the reaction was similar to that which greeted Prime Minister Costas Simitis's effort to reform social security in 2001, prompting a disorderly retreat and leaving his hitherto-reformist government seriously disoriented. Strong reactions had prevented earlier efforts at reform as well.

New Democracy went on the defensive yesterday, with grumbling within the party and with statements by Karamanlis and chief party strategist Giorgos Souflias insisting that neither would the retirement age be raised nor payments increased. Karamanlis, on a flight to Brussels, told reporters he had expected reactions to his party's program but not to this extent. Earlier, in a statement, he said: «PASOK, as always, is distorting the positions that were laid out in our economic program. Let's get this over with: The (retirement) age will not be raised; workers' payments will not be raised; our program foresees convergence of pensions with the EU average within the next eight years. This means a significant improvement in all pensions.»

Souflias, who was responsible for drawing up the conservatives' economic program, expressed «outrage» at what he called «the ruling party's effort to distort ND's policies.» He added that ND's law had «saved the social security system from collapse.»

Simitis, who is to be succeeded as PASOK's chairman by Foreign Minister George Papandreou following an extraordinary conference tomorrow and a vote of party members and «friends» on Sunday, launched a blistering attack on ND yesterday. «New Democracy wants to open a new social front, to provoke a new social dispute. It is reducing pensions and increasing the time that one must work before retiring,» Simitis said. He also mocked ND's proposal to privatize the National Bank of Greece, of which the State controls only 5 percent, with a bigger stake owned by pension funds. «What will New Democracy do? Will it confiscate the funds' property? Will it take away their shares?» he asked. «This is all slipshod. These people are not suitable (to govern),» he charged.

The Economy and Finance Ministry issued a news release saying that the «1990-93 framework means low pensions and a higher retirement age. But mainly it means insufficient funds to finance the social security system.» It said that PASOK's social security reform of 2002 (which was much milder than the 2001 proposal) resulted in much greater amounts of state money going into funding the system. For example, it noted that in 2004, the State would fund the Social Security Foundation (IKA) with 1.46 billion euros, whereas under the previous system it would have given 777 million euros.