Misguided critics of the plan to solve banks’ pension issue

The ongoing debate in Parliament on banks’ social security problem has shown opposition parties running out of substantial arguments on this major structural change in the economy’s most strategic sector. It was rather sad to see the main opposition PASOK party determine its stance based on whether former New Democracy leader Miltiadis Evert would insist on pressing his amendment against the government plan. At the same time, television news and newspaper columns are brimming with analyses purporting that the government’s amendment is hurting the taxpayers and favoring the bankers. However, the General Accounting Office report which accompanies the amendment shows that the budget is not burdened by the inclusion of Emporiki and Agricultural Bank’s supplementary funds in the Social Security Foundation (IKA), as the state’s contribution will be proportionate to its stake in each bank. If Alpha and Piraeus Bank also participate, then an actuarial study will follow determining their share of the costs, which they should pay in full. As for the main pension funds, the government is simply enforcing the 2002 law by the then labor minister Dimitris Reppas. This law provides for all social security funds, including those of banks, to be included in IKA. For banks this applies to the National Bank of Greece (NBG) and Agricultural, given that all other banks have already entered IKA. PASOK, which passed the Reppas law, ought to know the effects of this measure on IKA. The standard pension is, according to the constitution, guaranteed by the state, hence the law passed by the then economy minister Nikos Christodoulakis supplementing the Reppas law provided for the budget to contribute 1 percent of gross domestic product to IKA. So why should the budget be allowed to pay for part of the pensions of those who have worked in Greek industries or tourism companies and not for bank employees’ pensions? Takis Arapoglou, president of NBG, responded to criticism of bankers in a newspaper interview by saying critics «are ignoring, maybe deliberately, that 33 percent of NBG shareholders are public and private pension funds, led by IKA, foundations, the Church of Greece and public utilities. Do they ignore that 170,000 Greeks are small stakeholders of NBG? Do they ignore that 63 percent of NBG shares, just as in most other major Greek banks, in essence belong to Greek society itself? So if the banks pay for these deficits the burden will again fall on the taxpayers’ shoulders, while the constitution dictates that the main pension should burden the state.»

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