New Greek labor minister pledges to help pensions

Greece’s new labor minister vowed to tackle any evidence of corruption and protect pensioners’ interests after he was sworn in on Monday amid a bond affair that has dominated media headlines for weeks. Vassilis Magginas, 58, the ruling New Democracy party’s parliamentary spokesman, replaced Savvas Tsitouridis who was sacked on Saturday over allegations that an overpriced bond was sold to a pension fund for government workers. Magginas, a lawyer, became the third labor minister in as many years for the conservative government, whose popularity in an election year has been dented by the bond affair. As well as dealing with public anger over this matter, Magginas must also prepare drastic social security reform to avert a looming pensions crisis caused by Greece’s aging population. «I want to assure all pensioners that their financial rights are not at risk,» Magginas said during the handover ceremony. «We are on a head-on collision course with corruption.» Tsitouridis, who as the former minister oversaw state pension funds, had been under pressure to resign over what the government had said was the sale of an overpriced bond to the civil service’s supplementary pension fund. ‘Last straw’ On Saturday, Prime Minister Costas Karamanlis said the last straw had been press revelations that a key Tsitouridis aide, the Labor Ministry’s general secretary, was being investigated over past financial transactions unrelated to the bond affair. «It was my decision not to tolerate any act or behavior that hurts the country’s political life. We will not sweep any problem under the carpet,» Karamanlis told reporters. Chief investigator George Zorbas, who is looking into whether the civil service auxiliary pension fund was overcharged for a structured government bond, has said he expects to conclude his probe in May. The bond affair has already led to the resignation of a government-appointed state pension fund head, a ban on pension funds investing in structured bonds and the suspension of two Greek brokerages which deny any wrongdoing. The -280 million government bond, issued on February 22, 2007, with an initial coupon of 6.25 percent and maturing in 2019, changed hands several times before ending up with the civil service’s supplementary pension fund. Zorbas, head of Greece’s committee against money laundering, recently told Parliament he may widen his probe to other funds. The Socialist opposition has accused the government of trying to cover up what it alleges is a wider practice by some fund boards and brokers of profiting from bond sales at the expense of the pension funds.