GSEE talks tough on pensions

The General Confederation of Greek Labor (GSEE) yesterday rejected a government call for dialogue to reform an ailing pension system expected to go bust in 15 years. GSEE, which represents more than 2 million private sector workers, warned that if any changes are made to a social security system the EU describes as a ticking time bomb without union consent, it would launch strikes and street protests. «Today we decided to reject the government’s proposal,» Yiannis Panagopoulos, president of the Greek General Confederation of Labor, told Reuters in an interview. «It’s about time governments stopped trying to trick us.» The newly re-elected conservatives had put pension reform on the back burner during their first term but appear determined to tackle the problem despite their slim parliamentary majority, which could complicate efforts. The Greek central bank has said the government must deal immediately with the problem, due to Greece’s low birthrate, fragmented fund system and mismanagement of fund assets. Last week, the government invited social partners to a dialogue on the issue, the highlight of their reform agenda, which Finance Minister Giorgos Alogoskoufis hopes to wrap up within six months. Before the September 16 election, the conservatives pledged to make the system viable without raising age limits or contributions. But a committee of wise men appointed to study the issue has suggested several such changes to specific groups. Deficits Government officials say the hundreds of pension funds may have actuarial deficits close to -400 billion, twice the country’s GDP. Panagopoulos said threats that the system would collapse and young people would never receive pensions unless age limits and contributions are raised, were exaggerated. «In Greece, pension funds have been used by governments as a means to apply economic policy. Since the 1950s, the state has dipped into the pension funds to fund its own needs,» he said. «It’s a political and social problem, not an economic problem.» He said the state owed money to pension funds, not only from the state budget, but as an employer collecting contributions that it has not paid in. «The state owes the main state IKA fund about -4 billion,» he said. IKA has 5.5 million members. GSEE has issued a counterproposal to the government to have an open dialogue on four specific issues relating to pension reform – how to fund the system, unifying hundreds of similar funds, boosting low pensions and administrative improvements. Panagopoulos said a recent study showed that 71 percent of pensions paid out were below -600 a month and that needed to change. «We have not hesitated to bring hundreds of thousands into the streets to overturn pension reform plans in the past and we will not hesitate in the future,» he said. (Reuters)