ECONOMY

Social security compromise in peril?

The head of the civil servants’ umbrella union (ADEDY) yesterday called for any agreement between the government and employers’ and employees’ organizations on social security reform to be «validated» by a referendum in which all private and public sector employees would take part. Spyros Papaspyros, president of ADEDY, made the proposal during a one-day conference on «democracy in the workplace» organized by OTOE, the federation of bank employees’ unions. Papaspyros’s unexpected embracing of direct democracy took the government and, more importantly, his fellow unionists in the public utilities and the private sector, who are represented by the General Confederation of Greek Labor (GSEE), by surprise. It appeared to upset carefully laid plans by the government to coax the unions into accepting at least some of its positions on social security reform, and challenge the position of GSEE president Christos Polyzogopoulos, who has appeared ready to arrive at a compromise solution. Papaspyros and Polyzogopoulos, both members of the ruling Socialist party and sitting on its central committee, reacted strongly against government proposals, unveiled last year, to increase retirement age, cut pensions and introduce minimal private sector involvement in the provision of pensions. They did so partly to avoid being outflanked by unionists with ties to the opposition, but also out of a feeling that the government had overstepped the mark. The two unionists demanded that the heavily indebted social security system be partly financed through the state budget and declared that they would only accept changes that would ameliorate the pensioners’ lot. Their reaction led the government to withdraw its proposals hastily and began a period of internal party strife that even the Socialists’ October congress appears to have only partly quelled. Later, Polyzogopoulos took a more conciliatory line. He stressed that social security reform could not wait and accepted the fact that supplementary pensions could vary according to pension funds’ market operations. He even appears to have acknowledged the possibility of pensioners voluntarily turning to private insurance to augment their pensions. On the other hand, Papaspyros always appeared to take a harder line. Still, his move yesterday surprised Labor Ministry officials, who have met several times in recent weeks with top unionists. Labor Minister Dimitris Reppas and Economy and Finance Minister Nikos Christodoulakis denied yesterday that they discussed the issue with Prime Minister Costas Simitis. The government is expected to call on employers and unionists to begin discussions on social security reform by the end of the month. Apart from the Greek public company of chartered accountants SOL, there are several foreign firms such as Arthur Andersen, PricewaterhouseCoopers, KPMG, Deloitte & Touche, Ernst & Young, Grant Thornton, BDO and BKR operating in Greece. According to the latest data, the turnover of the Greek market is around 150 million euros, of which about one fifth is accounted for by SOL. The same data shows that of the 105 public enterprises and organizations, 90 were audited by SOL in 2000.