The current year is seeing a clear increase in social spending, which is expected to have risen by about 10 percent by the end of the year. Unfortunately, this is the sole encouraging fact in what is a very crucial area for the improvement in Greece’s living standards. A number of related indices continue to rouse concern, especially as regards the present and, above all, the future of social security funds. During 2000, the funds’ cash balance was halved, down to 158 billion drachmas from 298 billion in 1999. Their total actuarial deficit amounts to 1.3 trillion drachmas – that is 3 percent of the GDP. Their condition has worsened dramatically because of the precipitous fall in the book value of shares in social security funds’ portfolios which, from 1999 to 2000, lost 467 billion drachmas. Many fear that these losses could almost double during 2001 – at least judging by the progress of the Athens stock market so far. Following the opposition’s repeated charges and the prosecutor’s recent moves, the heads of the funds have practically frozen their trading accounts on the bourse, avoiding all moves which could invite charges against them. What is most alarming, however, is the constant decline in the insurees to pensioners ratio. In 1990 there were 2.46 workers for each pensioner. In 2000 there was 1.73 workers for each pensioner. Over the same period, the number of insurees fell by 216,222 people while that of pensioners rose by 564,642. The above data show that the serious crisis afflicting the social security system will, on the basis of current data, erupt after 2010 – somewhere between 2011 and 2012. Unfortunately, the existence of a considerable interim period has not prompted a well-planned and broadly acceptable solution but has rather led to a more relaxed climate. What is more, officials have recently used the uncertain and volatile international situation formed in the wake of the devastating terrorist attacks as an excuse for putting off a resolution of the social security issue to the indefinite future. This inertia could prove fatal. This colossal problem lies before us and there is no room for self-delusion. The sooner the government realizes this and works for a solution, the better it will be for the country.

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