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In early September 1999, the General Confederation of Greek Labour (GSEE) presented its positions on pensions. The trade unions downplay the importance of demographic trends, taken alone, and stress the importance of economic policy and renewal of the labour force.
In the context of the official release on 3 September 1999 of the first Annual economic and employment outlook of the Institute of Labour (INE) (GR9908145F), the General Confederation of Greek Labour (GSEE) also took the opportunity to present its positions on pensions.
The restructuring of the Greek social security system has been an issue at the forefront of union demands during the 1990s. The unions' primary concern has been that any changes should promote, first, the viability and, second, the public nature of social insurance so as to ensure social protection and satisfactory living conditions.
As a rule, the strategic choices and approaches of the social actors involved in social policy have different starting points, usually conflicting with each other, and therefore lead to different interpretations regarding the nature of existing problems and the measures that must be taken. Thus, according to GSEE, it is characteristic that demographic developments are given cardinal importance as a factor exerting pressure on social insurance systems in analyses carried out mainly by government bodies but also by European institutions and the Organisation for Economic Cooperation and Development (OECD). Such analyses ascribe a decisive role to the development of social insurance fund finances. The demographic changes recorded in the 1997 European Commission Demographic report are, states GSEE, proposed "as a starting point for consideration and commentary by policy-makers everywhere in Europe, whether the subject is social protection, employment or structural policy."
According to GSEE, by "isolating" the demographic approach in this way from economic policy and labour market policies, the dominant view accepts as a "natural necessity" policies to increase contributions by insured people, raise retirement ages, cut back benefits and in general take measures that lower the level of social protection. By contrast, union findings, which are viewed by others as "unfeasible" or "unrealistic", are said to show that interventions which secure resources through the creation of new jobs and the fight against unemployment, along with rational management and exploitation of reserves by social insurance funds, are of decisive importance for the funds' viability. Therefore, the relation between economic policy and social policy may be characterised by different strategic choices. In the unions' view, social policy should supplement economic policy in a relationship of equilibrium.
The increased social needs for healthcare and insurance coverage on the one hand, and the low level of funding from the economic system on the other, broaden the gap between economic development and fulfilment of the needs of the population, in GSEE's view.
In the opinion of the INE annual report, to cite demographic developments as a factor bringing pressure to bear on the financial situation of social insurance funds is of significance insofar as other parameters - relating to the situation taking shape in the labour market as a result of the policies being implemented - are taken to be constant and fixed. Higher unemployment decreases the ratio of insured people to pensioners, since it inhibits renewal of the labour force with negative effects on the flow of insurance resources towards the social insurance system.
As a consequence, the demographic element is not an independent variable in relation to socio-economic changes and restructuring, but has a strong relationship with both economic policy and with that policy's effects on the income status of households. A fall in real incomes inhibits households' ability to grow and thus increase the labour supply. As a consequence, the fertility rate, in the event that the financial cost of raising children is greater than the benefits for the household, may show a downwards trend, thus contributing to the ageing of the population. Therefore the relationship between demographic changes and socio-economic conditions is a relationship of interdependence and intertwinement, and the demographic element not only affects economic interventions and social restructuring, but is substantially affected by them.
Expenditure on social protection by social insurance bodies as well as the state budget allocates the majority of benefits, as a percentage of GDP, to retirement benefits. Social protection expenditure as a percentage of GDP in Greece is displaying an upward trend, accompanied by a corresponding increase in the percentage of the population made up by pensioners.
The INE report states that a consequence of this development is the inability of the system to meet retirement protection needs. Improvement in the level of pension insurance coverage is related not only to financial support for the social insurance system, but also to interventions that renew the labour force more rapidly and do not merely increase the number of people entitled to retirement protection. The aim should be that the advantage that results from securing resources is not cancelled out by the corresponding increase of the proportion of pensioners in the population as a whole.
From the statistical data, the INE has found that the living standard of thousands of pensioners is below the official poverty line. The Consumers' Institute estimates that 67% of men and 76% of women aged over 65 face significant difficulties in buying basic foods. The level of minimum pensions fails to meet the needs of the majority of pensioners to improve their real incomes and combat poverty, states INE. In most cases, increases in minimum pensions during the 1994-8 period remained at extremely low levels. It is characteristic that the percentage of Social Insurance Foundation (IKA) pensioners receiving minimum pensions in 1998 was almost the same as in 1994, at about 70% of all pensioners.
It should be noted that pension rates depend, among other factors, on the rates of contributions paid by pensioners during their working lives, as well as on their rates of pay.
In the view of the INE-GSEE, rates of social insurance benefits and the living standard they ensure for their recipients are a function not only of the budgetary situation of the insurance funds but also of the viewpoint and philosophy on the basis of which they are integrated in the framework of social policy. The primacy of the laws of the market in setting up and organising social functions as well as in mapping out strategies reflects social interests and aspirations in the socio-economic field. On this basis, in the sphere of theory, too, confrontations come to the fore; at their centre of gravity lies social policy, which shapes the manner in which the state, the family and the labour market are interconnected. (George Kollias, INE/GSEE)