ECONOMY

Social insurance reform requires taking stock first

The government intends to initiate and complete public dialogue on social insurance reform before its term expires in under two years. The aim is to determine the all the parameters of the problem so that the next government is able to assess the likely impact of measures and adopt the right decisions. The dialogue process will be starting on a political level in Parliament tomorrow and will continue between employers and unions later. The issue of the viability of Greece’s social insurance is not just the most crucial economic and social problem, but also the most complex, in the sense that laws have been introduced in the last 10 years whose implementation has not been completed, therefore, their impact on the problem is difficult to assess. In essence, the problem is like shifting sand that threatens to swallow any new arrangements, no matter how good, since the foundation of the system has yet to be defined. The loose ends left behind by previous social insurance laws are as follows: The 1990 and 1992 laws, known by the names of their authors, present ministers Souflias and Sioufas, initiated reforms but mistakenly adopted gradual approaches toward the problem so the effort was left incomplete. Despite providing a financial breather to the system (without these the system’s collapse would have been certain), most of the measures were either not implemented or lost their momentum. Another two laws were passed in 1998 and 1999 aimed at tidying up the system. They were perhaps aptly called «mini» laws, since they dealt with a problem through half-measures, mostly by forming new committees and councils. As expected, most of their measures have not been implemented. The 2002 law, introduced by then-Labor Minister Dimitris Reppas, envisaged the merging of most problematic pension funds into the country’s main fund, the Social Security Foundation (IKA), and still remains on paper. In view of the above, present Labor Minister Savvas Tsitouridis makes the right point when he tells Kathimerini that before the national dialogue is completed, existing legislation (the 2002 law) must be implemented and the finances of the various funds fully accounted for. These two acts would give a relatively clear picture of the social insurance system’s problematic areas and its total actuarial deficit. Within this framework, Tsitouridis is promoting a number of measures: the setting up of a special inspection body to fight evasion of social security contributions; tapping the earning potential of pension funds’ property assets; the gradual merging of similar funds, and updating the list of hazardous and unhealthy occupations to meet today’s realities.