ECONOMY

Private funds raise hackles

The declarations by Economy and Finance Minister Nikos Christodoulakis that private insurance firms ought to play a role in the pension system continued to elicit opposition from unions and left-wing parties. Left Coalition President Nikos Constantopoulos called a press conference yesterday to declare that «Mr Christodoulakis’s declarations place government policies firmly within the neoliberal camp» and denounce recent approaches by the ruling Socialists to his party in order to form a center-left coalition as a sham. Unionists publicly condemned any plans for providing auxiliary pensions through a privately managed system, alleging that the government would use such a system to prop up insolvent insurance firms, whose numbers they put at 35. «We cannot adopt positions that will open the field (of pension provision) to private insurance,» said Spyros Papaspyros, president of the civil servants’ umbrella union ADEDY. Christos Polyzogopoulos, president of the General Confederation of Greek Labor (GSEE), said that pension funds’ reserves could not be used as a «lifebelt» for insurers in the red. Privately, however, GSEE officials were saying that the involvement of the private sector in the social security system was inevitable and that the state budget could not possibly bear the full burden of social security reform. These unionists added that the managers of the auxiliary pension funds ought to be professionals, and these could be either banks, insurance firms or specialized foreign pension funds. Dialogue on social security reform, aborted last year due to union opposition to government proposals, which included private pension schemes, is set to begin late in March. The SEV head said, the crisis aside, Greece’s complicated and uncertain tax system continues to be a deterrent as far as businesses and foreign investors are concerned. Nikos Analytis, SEV’s vice president, urged trade unionists currently involved in wage negotiations to bear in mind the inflationary impact of excessive wage demands. He said the federation prefers to initiate talks based on the official inflation estimate of 2.8 percent for 2002 and to make up the difference with a catch-up clause should prices exceed projections. Analytis also suggested a role for private insurance in the social security system.