ECONOMY

Gov’t hopes for smooth sailing with labor unions

The government yesterday professed anew its eagerness to continue pursuing a course of continuous consultation and consensus with the unions and said it does not intend to reopen the potentially explosive issue of the financing of the country’s social insurance system in the next few years. «I ascribe great importance to their views… (The unions) have proved in the past that they have the ability and the will to adapt their very proper pursuits for the protection of the rights of workers to the broader interests of the country,» said Economy and Finance Minister Giorgos Alogoskoufis after a meeting with the president of the General Confederation of Greek Labor (GSEE), Christos Polyzogopoulos. Alogoskoufis said the government’s 2005 budget, a draft of which was unveiled last month, aims at striking a balance in tackling the various serious problems inherited from the past, which include issues in the functioning of the welfare state and the social insurance system, as well as those concerning the country’s competitiveness. «Funds for social protection and social insurance have been increased much above the average, like funds for education… The social insurance issue will not open. The law in force will determine the course of social insurance in the coming years,» Alogoskoufis said. The minister noted that the existing arrangement for financing the country’s social insurance system – enacted by the previous PASOK government – has many weaknesses, and that discussions must continue on how to ensure the solvency of the system without creating additional burdens for taxpayers. He said the government ascribes great significance to vigorous growth in facing problems concerning the country’s public finances in the years to come. «We consider it very important that the rate of growth does not slow down next year. Social partners have to contribute to this by maintaining a good climate, with realistic claims,» he said. Polyzogopoulos said several issues remained open as regards social insurance, notably the government’s large arrears to the Social Security Foundation (IKA), and, in turn, IKA’s large debts to other organizations. He said GSEE raised the following issues with Alogoskoufis: devoting 1 percent of gross domestic product to the financing of the country’s pension funds; governmental payment of 3.8 billion euros to IKA; IKA’s payment of 1.5 billion euros to organizations such as the Manpower Organization (OAED) and the Labor Housing Organization; and the integration of bank employees’ pension funds into IKA, covering the corresponding cost. Polyzogopoulos said discussion also touched on budget issues, particularly the government’s incomes policy, as envisaged in the draft budget, which he said envisaged inadequate pay raises. «We believe that the income of wage earners and pensioners is being held down rather than strengthened and we believe the government must change course on this,» he said. He also voiced fears that the reduction in public investment in the budget would fuel unemployment, which is projected to increase by 60,000 in coming months. Alogoskoufis also said he had asked for a further meeting with GSEE early next month for a continuation of talks.