Businesspeople warn against a social security contribution hike
Industrial and tourism sector entrepreneurs are expressing fears of a further deterioration in the competitiveness of Greek labor and a surge in undeclared labor if employers are asked to pay more in social security contributions, which the Labor Ministry implied could happen on Monday.
There has also been a strong reaction to the ministry’s plans to merge main and auxiliary pensions in order to apply the zero-deficit clause for pension funds. Sources say many people strongly support the view that supplementary pensions ought to remain autonomous.
To that effect, the governing board of the auxiliary pension fund of salary workers (ETEA) is asking Labor Minister Giorgos Katrougalos to find a solution to this social, economic and political matter with the maintenance of the redistributive role of social security through the preservation of the two autonomous pillars of pensions, i.e. main and auxiliary pensions.
Pressure is growing on the ministry, which is now seeking ways to shield the upcoming reform of the system with “redistributive elements” that would overcome the reactions within SYRIZA.
The ministry is still seeking resources of 900 million euros, and unless there is a spectacular change in the stance of the country’s creditors, this amount will come from slashing pensions. Under pressure to make major cuts – even to pensions of less than 1,000 euros per month – the ministry is bringing back to the negotiating table a proposal to increase employers’ social security contributions by at least 2 percentage points, although it is not out of the question that the burden may be shared by both employers and employees.
The proposal for the contribution hike may have already been rejected by European Commission Vice President Valdis Dombrovskis, but local businesspeople are expressing great concern as the country already has among the highest non-salary costs in the European Union.
In a statement, they noted that the victim of the contribution hike would be the sustainability of the social security system, as the deterioration of competitiveness would lead to a reduction in contributions owing to growing unemployment and burgeoning undeclared labor.
