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Social security reform dialogue starts

23 November 2009 / 15:11:16  GRReporter
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The meeting between Labor Minister Andreas Loverdos and representatives of the biggest trade unions in Greece, sets the beginning of the reform dialogue, which the government has to undertake in the social security system. Some of the discussed topics during the negotiations will be tax evasion, limiting healthcare expenses and the framework of the negotiations between the ministry and the trade union members.

The trade unions members will set as a priority the reforms of the age limit for retirement and decreasing the pensions. Besides this, the union members will base their arguments on the crisis in the biggest social security fund in Greece – IKA, so that they will require the creation of a financial reserve in order to “save” the pensions.

The forecasts are that the government will not make structural changes but will try to gather means by unpaid taxes, to limit expenses in the healthcare sector, to renew the list of hard and harmful for the health professions and to review all pensions, which are given in advance for disability.

The dialogue between the government and the trade unions members will revolve around 12 main topics:

  1. From 2013 and on - gradually increasing the retirement age of women working in the public sector.
  2. Freezing the provisions for increasing the age limit of mothers, which is supposed to come into effect in 2010.
  3. Drastically lowering the healthcare expenses and controlling tax returns.
  4. Creating a National Solidarity Fund (from social resources), which will financially support the system and will ensure future generations.
  5. Uniting the existing social security funds in big autonomous authorities.
  6. Provide motivation for workers to insure themselves by setting a basic pension for everybody, which will increase depending on working years and the salary (removing the motivations for signing a contract and being insured on a smaller salary).
  7. Discouraging the early retirement by agreeing upon a percentage, which will be subtracted every year but will be smaller than the minimum years for retirement (until now this punishment was applied by decreasing private pensions with 6% and public pensions with 4.5% per year).
  8. Setting the amount of a basic pension and gradually forming the pension of people working in agriculture and for the not insured ones - €950 for two member family and €550 for one retiree.
  9. Restructuring health units in an organized health system.

10.  Lowering the time for paying back pensions to three months until the end of 2010.

11.  Reviewing the definition of Annual Maintenance Relief.

12.  Reviewing the regime for hard and harmful for the health professions.

Increasing the retirement age with one year for everybody “revives” the system for three and a half months but if tax evasion decreases from 35% to 20% then the system will win seven years of live, notes Georgios Romanias, who is a science assistant in the Institute for Labor in the Trade Union Confederation. Based on data provided by the Organization for Economic Co-operation and Development, Greeks work on average 25 years but Mr. Romanias explained that this is due not to the fact that they work less years but to the fact that black market jobs and non-insured jobs, have increased.

Tags: Social security in Greece Retirement
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