NEWS

IMF calls for more reforms in Greece

The government yesterday heeded calls from the International Monetary Fund (IMF) to proceed with urgent changes to the country’s social security system but pushed back any likely controversial reforms until its next possible term in office. Union groups and opposition political parties attacked the reform ideas, saying that they will undermine society. Finance Minister Giorgos Alogoskoufis admitted yesterday that the government will hold talks on pension reform with relevant groups shortly but that no other initiatives will be taken, for now. The Finance Ministry is not a supporter of sudden adjustments, the minister said while presenting the IMF report on the Greek economy. Changes to the pension system in the banking sector brought on widespread industrial action this summer. Banks shut down for weeks, while a number of national strikes brought the country to a standstill. Changes to retail trading hours, along with a cut in overtime pay, resulted in another wave of strikes. The IMF recognized Greece’s structural reform efforts so far but said that more is needed and that the pension problems will start to weigh on the country’s high public debt as of 2010. «A complete social dialogue will need to start immediately to broaden the vital issues and likely solutions with a goal of implementing the reforms that are urgently needed,» the IMF said. Despite the fact that Prime Minister Costas Karamanlis has said that voters demand economic reforms from his administration, no essential steps in changes to the pension system look likely to be made for another two years. The conservative government’s four-year term ends in 2008. Different international organizations have repeatedly stressed the need for Greece to tackle its pension system and the problems caused by its aging population. Greece, however, is among the European Union states that has done the least to address the issue. In response to the IMF report, the country’s largest union group, GSEE, said that it is concerned that the IMF views are accepted by the government. «We reject these recipes and policies as they are against the good of society,» GSEE said.