Union chief urges social security talks

Warns IKA faces serious trouble

After warning that, in 20 years, Greece's main social security fund would be in serious trouble unless action was taken, the head of the country's largest umbrella union took the surprise step yesterday of calling for employers and workers to start talking about reforms to the system.

The head of the General Confederation of Greek Labor (GSEE), Christos Polyzogopoulos, was presenting a study conducted by his organization's Labor Institute into the the prospects for the state Social Security Foundation (IKA) over the coming decades.

Union leaders have so far been reluctant to discuss reforms to the social security system with the government, mainly because they fear it will lead to a reduction of state coverage and a corresponding drop in pensions. Equally, the subject has proved a hot potato for successive governments, despite looming shortfalls, because of the unpopularity of the type of measures that need to be introduced.

However, after the GSEE study found that for IKA to survive, it would need to take almost 2.5 percent of GDP from the annual budget rather than the current rate of 1 percent, Polyzogopoulos urged for talks on reforming the system to begin as soon as possible, even without the government's lead. «We have a responsibility to the young... to bequeath them a healthy and sound social security system so that they do not only inherit the costs of the next generation's pensions,» he said.

He found an ally at yesterday's press conference in Odysseas Kyriakopoulos, the head of Federation of Greek Industries (SEV), who said that «bold reforms» were needed to the system and that they could be arrived at through constructive dialogue. Another consenting voice was that of Dimitris Armenakis, president of the National Confederation of Greek Commerce, who said «governments and ministers change but we, business owners and workers, will reap the consequences.»

Polyzogopoulos said that GSEE's study had found that Greeks have among the lowest pensions in Europe. A fifth of them draw less than 400 euros a month, only 9 percent are entitled to over 1,000 euros monthly and the rest get 450-600 euros, he said. He called on authorities to crack down on non-payment of IKA contributions, claiming the fund was losing 1.8 billion euros a year due to employers and staff dodging insurance payments.