Reforms lack clarity

The government is preparing for battle on two fronts to pass its new pension reform legislation, confronting the opposition parties head-on while trying to win over labor groups by keeping the door open for changes to the bill. Nevertheless, the civil servants federation (ADEDY) and other unions demanding more state funding for social security are planning to stage a 24-hour strike when Parliament begins discussing the bill, probably on Tuesday, June 18. The government is planning to play up the dilemma posed by any reforms to the pension system, pointing out to leftist opposition parties that increases in benefits would lead inevitably to an increase in contributions while arguing that criticism by the New Democracy party betrayed the conservatives’ desire to cut pensions. The provisions of the bill, presented to Parliament on Tuesday night, are sketchy with regard to precisely how the social security system will be funded and leaves other issues open to various interpretations. For example, it is not clear whether a reduction in mandatory years of employment for working mothers applies to those who will bear children after January 1, 2003, or to those who entered the social security system after January 1, 1993. Also, the changes do not ensure that the Social Security Foundation (IKA) will become the single fund for wage earners. The bill does provide for nine special funds joining IKA, but not until January 1, 2008. It is also not clear what will happen with the unification of auxiliary funds. The Finance Ministry has not provided opposition parties with the mandatory actuarial report on the future of the social security system, prompting speculation that either there is no full actuarial report, or that the presentation of one would confirm suspicions that the changes to the pension system are aimed at currying favor with voters. The report submitted by the General Accounting Office together with the legislation is also murky with regard to the funding of the system. It details the costs IKA will incur beyond 2032, but does not say how much the changes will cost the State, which is to fund IKA with 1.4 billion euros next year, 1 percent of GDP annually until 2032 and issue special bonds. New Democracy yesterday said the government «does not care about the pension system’s viability but only about its own survival,» and that solutions to problems were being put off. «A May 2001 immigration law sets aside judgments against women who press charges against their traffickers, and allows these victims to remain in the country,» the report said. «The government does not provide shelters or services for trafficking victims.»

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