New round of talks on banks’ pension fund deficits
A new round of talks on the banks’ social security problem – the heavy deficits of auxiliary pension funds – will start this week. Today, Economy and Finance Minister Giorgos Alogoskoufis is to meet with the president of the Hellenic Banks’ Association (HBA) and Alpha Bank chairman, Yiannis Costopoulos, and is expected to meet with the representatives of the bank employees’ federation (OTOE) midweek. The talks are aimed at finding a single solution to the issue which the introduction of the new International Financial Reporting Standards (IFRS) on January 1 has exacerbated, as pension fund deficits and provisions for future pensions and severance pay must be treated as liabilities. OTOE is pressing for a blanket solution which the banks resist. Emporiki Bank is the bank that expects its finances to be most heavily affected by the issue. A meeting last Friday, in which, besides Alogoskoufis, Emporiki Chairman Giorgos Provopoulos, Labor Minister Panos Panayiotopoulos and union representatives took part, ended in an impasse. News of the meeting was interpreted as a sign that case-by-case solutions are being sought. The government itself is loath to press banks to find a common solution. However, the simple word that all solutions were being envisaged caused a vehement reaction from unionists. The latter believe that the government’s avoidance of an all-encompassing solution is due to the fact that it would have to finance it through the budget. National Bank Chairman Takis Arapoglou is known to oppose this solution and has reacted strongly against a proposal by Piraeus Bank chief Michalis Sallas favoring government financing. The greatest obstacle toward a single solution is the difficulty in assessing precisely the impact of pension fund deficits on each bank. However, top bank managers believe that banks may now be ready to negotiate.
