Fund iceberg looming

Prime Minister Costas Karamanlis is putting together a small crisis management team of trusted advisers to tackle the growing controversy over pension fund investments as opinion polls released yesterday indicated that recent revelations have hit the government’s popularity. According to sources, the team will be made up of three or four people who will gather information on the sale of bonds to pension funds and report back directly to Karamanlis. It was revealed last month that a civil servants’ fund overpaid some 5 million euros for a bond, prompting an investigation into the financial firms involved in the transaction. Opposition parties criticized the government for appointing inexperienced pension fund presidents and not overseeing their investments. In an interview with Sunday’s Kathimerini, Labor and Social Security Minister Savvas Tsitouridis admitted that the government could have prevented the current situation. «Perhaps we should have prohibited pension funds from investing in structured products, given that their evaluation requires specialized knowledge,» said Tsitouridis. All bond purchases made by pension funds over the last five years are being investigated. The government is concerned that the probe will reveal more damaging investments. Two polls published yesterday suggest that the pension fund issue is already having a negative impact on the government’s popularity. A Kapa Research poll published in Sunday’s To Vima newspaper indicated that PASOK had cut ND’s lead from 1.6 percent in February to just 1 percent. It showed support for the conservatives at 36.9 percent, and 35.9 percent for the Socialists. A survey by ALCO for Sunday’s Ethnos newspaper pointed to a difference of only half a percent between the two parties. It showed support for New Democracy at 33.9 percent compared to 33.4 percent for PASOK.

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