ECONOMY

Mammoth task for new labor minister

mammoth-task-for-new-labor-minister

The new labor minister will be greeted by a package of 20 actions that are to be delivered immediately and may change labor relations and the pensions system beyond recognition.

The country’s bailout commitments and the distressed state of the social security funds leave no room for anymore delays. By the end of October, the government will have to introduce most of the changes that the new bailout agreement dictates, with the central aim being the reduction of expenditure by 3.5 billion euros by 2018.

The greatest adjustment will have to take place within 2016 (amounting to 1.3 percent of gross domestic product) stemming from reforms that must be decided within next month. At the same time, the ministry will need to find ways to offset the loss of 1.5-3 billion euros that will cover the decision of the Council of State for annulling earlier pension cuts as anti-constitutional.

Social security experts say that the system is like a ticking time bomb ready to explode, including the approximately 4 billion euros of obligations toward pension applications submitted and not yet satisfied.