ECONOMY

Social security funds lose billions

The financial crisis has brought losses of about 4.5 billion euros to the country?s social security funds, owing to the increase in jobless numbers as well as flexible forms of employment. Half of the losses have been covered by slashing spending on pensions, while the increase in disbursements from the budget to cover the funds? needs comes to 1.4 billion euros in 2011.

Labor Minister Giorgos Koutroumanis announced on Tuesday an average cut of 15 percent to auxiliary funds? pensions with a new law that will apply as of January 1.

?If no measures are taken, one after another the auxiliary funds will have to stop paying, regardless of the crisis,? said Koutroumanis.

He recommended the merging of five auxiliary funds into a single body that will operate within the first quarter of 2012, concerning some 2.5 million pensioners and about 1 million workers.

He added that in the next five years, the country?s biggest fund, the Social Security Foundation (IKA), will have to pay an additional 4 billion euros to its auxiliary fund, ETEAM.