Pension reform, populism and the pre-election countdown

On the verge of a nervous breakdown following the catalytic impact of the Pachtas affair on voters, PASOK is now naively trying to compensate for the damage it has suffered so it can minimize the extent of its inevitable defeat that recent polls have been predicting. So, party officials started perusing page after page of the economic program proposed by opposition New Democracy – which has strong and weak points, as every party’s pre-election program does – and chose to emphasize the paragraph referring to the full implementation of the social security reform proposed in 1990-1993, with the necessary amendments of course. As we are likely to hear many populist arguments from serious PASOK officials such as Economy Minister Nikos Christodoulakis and trade unionists, it is worth examining the matter in more detail. When the law first appeared, it gave a new lease of life to the country’s crumbling social security funds, despite the social protests it provoked. Indeed, the impact it had is still apparent today, 10 years later, and the governments of Andreas Papandreou and Costas Simitis approved the extension of the law until 2007 even though – when in opposition – they had vowed to abolish it. British experts who came to Greece in 2000, at Simitis’s request, to investigate the staying power of the social security system, had described it in very positive terms, noting however that existing funds would need strict restructuring if they were to survive for the next 20 years. The aborted attempt in 2001 of Tassos Yiannitsis, then labor minister, to reform the pension law was essentially based upon the original Sioufas law. But the draft bill, although presented, was never approved because of resistance by PASOK’s reactionary officials and by vested interests. And Simitis gave in, abandoning all the effort he had invested in what he had called the «second wave of reforms» and thus acting against the country’s best interests. But the most fundamental argument of those wanting to tackle this structural problem are the efforts being made in other European countries. In Germany, Gerhard Schroeder’s Social Democratic government experienced heavy opposition before passing sweeping reforms to salvage the core of the welfare state; the Berlusconi government in Italy pushed through similar changes, while the French have already started a dialogue aiming at such reforms.