NEWS

EU prompts promise of new reforms

A day after EU finance ministers warned Greece to curb spending and reform its social security system, Economy and Finance Minister Nikos Christodoulakis, who chaired Tuesday’s Ecofin meeting, said the government would carry out structural reforms but not to the social security system. Ecofin expressed the fear that Greece’s rapidly aging population posed a serious danger of fiscal imbalance in the future, saying that further reforms had to be carried out to prevent spending from reaching unsustainable levels. «There is no question of us reopening the social security issue,» Christodoulakis told a news conference. Reforms had been made to the largest fund, the Social Security Foundation (IKA) last year and, Christodoulakis said, the subject was now closed. He refused to reply to persistent questions as to what would be done with other funds, referring only to an «institutional dialogue» to be held at some unspecified date. Regarding the call for spending curbs, Christodoulakis, who was reported to have agreed with it on Tuesday, was unclear about what would be done. He indicated that measures had already been taken. If this were the case, perhaps the European Commission and Greece’s partners on the Ecofin would not have issued their warnings. Addressing Parliament’s Finance and European Affairs committees later yesterday, Christodoulakis declared that «the government will never take measures that will be a fiscal shock.» But he stressed that the government’s aim was to make structural changes in line with the EU summit decisions at Lisbon. The Greek EU presidency’s aims, he said, were to solve the problem of taxing deposits, increasing employment (in line with the target of 20 million new jobs in Europe by 2010) and carrying out structural reforms that would be marked neither by haste nor by indifference. Replying to criticism by New Democracy deputies, Christodoulakis said: «We will not butcher critical issues (such as social and developmental policy) in order to achieve stability. We leave some small-scale fiscal deficits which will not endanger development.»