The Labor Ministry and the salaried workers’ supplementary pension fund (ETEA) are seeking what solutions they can to cover June pensions for over 1 million recipients, after the revelation – and urgent withdrawal – of a proposal to liquidate bonds at a 25 percent loss to cover the fund’s 100-million-euro deficit.
In the wake of back-to-back meetings with the ministry over the weekend and an ETEA board meeting on Monday it was decided to cover most of the shortfall (between 50 and 70 million euros) through debts from other funds to ETEA. The remainder will be demanded from a special account held by the Insurance Fund for Solidarity between Generations (AKAGE), which includes contributions by supplementary funds transformed into repos.
It may not, however, be easy for other funds to cover their debts to ETEA given the general lack of liquidity in the state sector, while many funds, including the Social Security Foundation (IKA), have entered repayment arrangements with ETEA as they cannot pay their dues immediately.
IKA owes around 180 million euros but cannot pay more than 2 million euros per month.