Social dialogue focuses on social security

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Following one year of work, the first stage of Greece's social dialogue process on the issue of social security concluded at the end of May 1998. We examine the conclusions drawn so far and present a brief evaluation of these findings by the General Confederation of Greek Labour (GSEE).

The first stage of the social dialogue process on social security began in May 1997 (GR9704112N). The process included a full examination of direct support measures for social security - known as the "small package" - and the proposal of new initiatives with the aim of immediately proceeding with changes aimed at the more efficient operation of the system. The end of May 1998 saw the submission of the findings of the dialogue's "scientific committee" concerning the first stage of the dialogue.

The findings of the scientific committee relate to six themes, of which the most important are: evasion of contributions; exploitation of social insurance funds' movable and immovable property; the relations of social insurance funds with the insured citizen; and the functioning of insurance funds' healthcare services. In addition to representatives of social institutions, the scientific committee and the dialogue working groups also include representatives of research and technical agencies and institutions. It should be noted that the conclusions drawn so far are on the expert level, and that in the second stage of the dialogue the "large package" of the social insurance scheme will be examined - ie the revitalisation of the scheme's funding basis to make it more efficient in meeting insurance needs.

Below we outline the conclusions of the first stage of the dialogue and focus on the evaluation of these findings by the General Confederation of Greek Labour (GSEE).

Contribution evasion

The general view prevailing at the dialogue meetings and in the findings of the working group was that widespread evasion of contributions constitutes a constant drain on the resources of the social insurance system, and that by collecting the contributions which are currently lost in this way, many painful measures will be avoided later. According to the findings, sectors with severe contribution evasion problems are construction, tourism, agricultural industries and small family businesses. The following were indicated as preconditions for stamping out contribution evasion:

• establishing a single national register of insured persons and assigning a social security registration number to every insured person;

• providing state monitoring of the progress of the income and budgets of the insurance funds;

• setting up a special department for fighting contribution evasion;

• ensuring the possibility of cross-checking data;

• developing the ability of funds to collaborate and assist each other in collecting contributions; and

• taking individual measures to increase flexibility in collecting contributions.

At the end of the conclusions, specific mention is made of the need for transfer of know-how from the "front lines" of the battle against tax evasion, as well as for measures to raise awareness of insurance questions; both are matters requiring further research and efforts.

Exploitation of funds' property

The exploitation of the "movable property" (ie financial assets) of the social insurance funds is regarded as one of the most fundamental issues of the "small package" (GR9803163N). The main subject of the discussions of the working group was the possibility of effective utilisation and management of funds' reserves in conditions of transparency. It was also stressed that, between the needs for investment security and achievement of the greatest possible profitability, the emphasis should be placed on security.

GSEE's views do not concur with the committee's findings on this point. The trade union confederation states that inherent in the essence of reform proposals should be the view that rational, active and reliable management and profitable and secure exploitation of the funds' assets are conditional on:

• restoration of self-administration and management of reserves to the administrative councils of the funds, and the abolition of the legislative regime which has cut insured persons off completely from their responsibility to contribute to their social insurance carriers;

• guarantees of recovery, viability and upgrading of the operation of the funds by restoring their capital and actuarial equilibrium in the framework exclusively of the objectives of the social security scheme, without the additional burdens put on it by the state, which has from time to time conducted social and welfare policy using the reserves of the insurance carriers. This has been a constant drain on the system, incompatible with its efficient running; and

• boosting the competitiveness of "social capital" and offering incentives to guarantee handling of investment and taxation matters on at least an equal footing with private insurance capital and investment schemes, in accordance with EU guidelines. To implement the above objectives, GSEE is proposing a specific new legislative framework which will provide for the restoration of social autonomy to the administration, management and running of the agencies of the social security system.

Although the funds' immovable property is not particularly sizeable (it has been estimated at GDR 230 billion-GDR 240 billion), and falls far short of their movable property, the funds are regarded as one of the biggest "players" in the real estate market. They are confronted with a substantial administrative problem due partly to the stifling nature of relevant legislation. It is considered, however, that the real problem is not merely administration but the use made of the fund's immovable property. At the same time, it is noted that in the case of real estate, there have also been phases of working together and collaboration.

Relations with citizens

With regard to the relations of insurance funds with insured citizens, a central point for GSEE is the belief that social security is regulated not only in the framework of fundamental law, but also through administrative procedure. GSEE believes that legislative introduction of such administrative institutions will substantially facilitate the realisation of the objectives of social insurance law in Greece and will release insured people from a great number of the difficulties and impediments they encounter when claiming their social insurance rights. Moreover, it is noted that these institutions were established years ago in the insurance sector in most EU Member States.

The committee's work on simplifying administrative processes was aimed at locating severe lacks of proper organisational and operational infrastructure in insurance systems, and their relevant consequences.

Healthcare services

With regard to the functioning of the funds' healthcare services, the committee's aim was on the one hand to record the existing situation in relation to healthcare benefits and spending, and on the other to examine the possibility of rationalising the funds' administrative operations, in order to put their resources to better use. The group's final position favours voluntary cooperation (on the basis of a decision by the administrative council of the relevant funds) between the healthcare services of the social insurance funds, aimed at utilisation of "economies of scale".

Commentary

The social partners consider it important to work out these issues at the first stage of the dialogue on reform of social security in Greece, inasmuch as, apart from deficits, limited government financing and low level of benefits, the system's features include serious questions of administration and operation. If these are not resolved, they will further reduce the viability of the funds and aggravate the adverse conditions for the granting of benefits to insured workers and pensioners (George Romanias, member of expert committee of GSEE, INE/GSEE)