Flirting with a red card

Mitliades Evert’s week-long crusade against government proposals to reform the pension scheme for bank employees, which culminated in his «no» vote on the relevant bill in Parliament, invited harsh criticism from his peers within the ruling party. Pressure from the New Democracy MP and former party leader to amend the proposed legislation gave the impression that there is indeed something suspect about the pension reform plans. Evert was surely right about one thing: Under the government’s plan all banks except Eurobank, which has no structural woes to worry about, will begin paying their dues to IKA, the country’s largest social security organization,10 years from now – and free of interest. Clearly, the conservative government’s measures to support the (still relatively healthy) bank sector are welcome. However, it is unacceptable for credit institutions that profit from the spread between deposit and lending rates rather than investments to be handed a 10-year exemption on taxes for dues paid into a fund for which the main contributors are private employees and entrepreneurs. In a bid to forge a broad social consensus, the Karamanlis government tried to pit low-ranking bank employees against high-ranking ones. However, exempting banks from the obligation to pay IKA taxes – and without launching an independent study into the cost of including bank workers in the fund – is just another form of state subsidy that violates the rules of free-market competition. The Greek government once again risks being shown the red card by the European Commission. Karamanlis and his government seem to be treating the banks’ pension problem, and more generally social security, as a technical, accounting issue. But in fact, it is a profoundly political one. The eight-hour working day and IKA were groundbreaking innovations by Ioannis Metaxas, a dictator, not by the Populists or the Liberals, parties which had forged close ties with the business class of the time. No one is innocent in this provincial corner of Europe. The evident distortions are everyone’s fault. It was New Democracy, not Socialist PASOK, that nationalized Olympic Airways and the Andreadis Group – Emporiki and Laiki bank, and the Elefsina refineries – and governments have tried since to shake off the burdens left from that decision. Last week’s debates showed that the political dividing lines are thinner than ever. Thankfully, life goes on independent of politicians’ endless feuding.

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