GSEE sets out social security positions and proposals

Download article in original language : GR0106112FEL.DOC

Social security is at the top of the Greek industrial relations agenda in mid-2001, following government proposals for reform of the system, particularly in the area of pensions. Trade unions have staged two 24-hour general strikes, and in May the Greek General Confederation of Labour (GSEE) presented a major report aimed at setting out and supporting the unions' positions and proposals on social security.

In April 2001, the Greek government announced a set of proposals on social security reform, focusing on changes in pensions. The plan, involving reductions in pension benefits and less advantageous retirement terms (GR0104106F), brought an immediate negative response from trade unions and has been at the top of the national industrial relations agenda since. On 26 April 2001, the Greek General Confederation of Labour (GSEE) and the Confederation of Public Servants (ADEDY) called a well-supported 24-hour nationwide general strike, in opposition to the government proposals (GR0105108N), and the government announced a freeze of its plans pending dialogue with the unions. On 17 May, a second 24-hour national general strike on the same issue was held. Following the two strikes, the Minister of Labour and Social Security held bipartite meetings on 30 and 31 May with GSEE and ADEDY, with the aim of creating the conditions for commencing a dialogue on the social security system. These talks were not successful in relaunching dialogue, though the Ministry of Labour announced that it would form a special technical committee of experts on social security, which would conduct an in-depth examination of two studies on the issue, one by the Ministry and the other by the Institute of Labour (INE) of GSEE/ADEDY (GR0106111N).

GSEE presented the INE-GSEE/ADEDY actuarial study on the social security system in Greece at a seminar on 17 May, in what it described as an expression of its desire for a "responsible, substantiated, scientific dialogue" in response to the government proposals. This study was designed for the purpose of further scientifically documenting the positions of the trade unions on the social security issue. Its main points are set out below.

Background

Following mass mobilisations in 1990 and 1992 aimed at preventing new social insurance regulations that the government of the time was seeking to introduce, GSEE continued to take (militant and other) action aimed at both preventing any further detrimental changes and at improving the existing regulations. Advances which the trade unions see as attributable to their demands included:

• retirement after 35 years of service at the age of 58;

• retirement after 35 years of service in arduous and unhealthy occupations at the age of 55 or (on a reduced pension) at 53;

• improvements in pensions (bearing in mind GSEE's standing demand for a minimum monthly pension equivalent to 20 days' pay for an unskilled worker);

• social insurance for long-term unemployed people due to retire in under five years;

• healthcare cover for unemployed people;

• guaranteed supplementary pensions of 20% above the basic, and tackling of the problems of the supplementary social insurance funds;

• measures taken regarding other social insurance funds - such as the Employees Insurance Fund and funds covering, specific groups, such as seafarers, or the staff of the Hellenic Telecommunications Organisation (OTE) and Public Power Corporation (DEI); and

• other favourable regulations (such as the grouping together of some insurance funds).

In January 1999, GSEE submitted a proposal for the overall reform of Greece's social insurance system, which it regarded as cohesive and consistent. In September 2000, it set up a special committee of experts to bring this proposal up to date, quantify social insurance figures and work out actuarial projections aimed at enshrining in law the introduction and the unimpeded operation of a long-term sustainable, socially effective and cost-effective social insurance system. This is the study which was presented in May 2001

Proposals

GSEE states that its study constitutes an integrated approach to Greece's social insurance problems, and covers all related parameters. The documents contains positions and proposals with regard to:

• dealing with the problem of the existing social insurance deficit, by means such as an increase in the amount of - and improvement of the procedure for granting - benefits, reciprocity of deductions for insurance contributions and granting reduced pensions and insurance cover for uninsured older people and long-term unemployed people etc;

• identification and enactment into law of sources of funding for the social insurance system as well as the introduction of mechanisms for effective collection of resources for the system. This includes enactment into law of tripartite funding for all insured people, exploitation of the social security system's property, new resources for the creation of a "special social solidarity account", recovery of lost or stolen resources, and tackling non-wage labour costs;

• the organisation and operation of the social insurance system, covering matters such as basic and supplementary pensions, the executive and administrative independence of social insurance organisations and the reorganisation and operational upgrading of insurance funds; and

• convergence of the social insurance systems of the 15 EU Member States and the inclusion of the Greek social insurance system in the overall European development process in this area.

According to the report, tackling the long-term actuarial deficit of the social insurance system is not merely a mathematical operation allocating the deficit's settlement among specific debtors (eg the state, workers and employers) in specific proportions. It is also bound up with the general functionality and efficiency of the national economy as a whole, which can eliminate or substantially reduce the amount of the long-term deficit due or postpone its payment. In line with this rationale, economic policy should always take into account its effects on the operation and performance of the country's social insurance system.

On the basis of the abovementioned and of the scientific studies carried out by INE-GSEE/ADEDY, GSEE believes that changes to reform the social insurance system should be based on the following:

• safeguarding and strengthening the "social content" of the system;

• recognition of the "social deficit" which has stemmed from utilisation of social insurance reserves to develop the economy without compensation for the social insurance system;

• tripartite funding of coverage for all insured persons on the basis of two-ninths paid by workers, three-ninths by the state and four-ninths by employers;

• regulations on the payment of all amounts owed by the state and private individuals to the social insurance system;

• effective exploitation of the insurance funds' property (both movable and immovable);

• effective fighting of contribution payment evasion (estimated as affecting over 25% of contributions);

• introduction of a special direct tax on high incomes and on capital-intensive enterprises;

• no reduction in statutory employers' contributions for the pension and healthcare schemes;

• increasing the total economically active population by increasing employment rather than lengthening working life;

• effective measures to address the country's demographic problems (the average age of the population has reached approximately 40 years);

• basic pensions to be calculated on the basis of 80% of pensionable wages, also for workers who joined the system after 1993 (when some aspects of pensions were reformed);

• supplementary pensions to be not less than 20% of pensionable wages;

• no linkage or correlation between private and social insurance; and

• provision for retirement on the basis of social needs as well as insurance contribution records for those who, at the age of 65, are currently not eligible for retirement (eg seasonal workers and long-term unemployed people).

GSEE is also calling for the acceptance and enactment into law of agreements with the employers' organisations pertaining to social insurance issues which are included in the current National General Collective Agreement (GR0006175N). In particular, the two sides have agreed on:

• reorganisation of the social insurance system following a well-researched, substantiated dialogue with the social partners regarding the unification of basic pension funds of the same type;

• restoration of majority representation of the social partners on the social insurance funds' administrative boards;

• establishment of a system of both capitalisation and distribution ("pay as you go") elements in social insurance;

• implementation of tripartite funding - two-ninths paid by workers, three-ninths by the state and four-ninths by employers - so as to secure the necessary funds without placing a financial burden on the insurance organisations and without increasing workers' and employers' contributions, in order to avoid increasing production costs;

• effective regulation of the obligations of the insurance funds;

• effective combating of contribution payment evasion and of illegal, uninsured work by Greek and foreign workers;

• increases in minimum pensions comparable with the pay increases set out in the National General Collective Agreement;

• unification of the healthcare insurance schemes, or their transfer to another body, following dialogue with the social partners;

• the use of information technology in the management and operation of social insurance, with a simultaneous development of policy for, and continuing retraining of, staff working for the insurance funds, aimed at better serving insured people and benefit recipients;

• retirement after 35 years of pensionable work (35 years or 10,500 days of insurance), with no minimum age;

• special regulations for mothers with young children;

• special retirement conditions for people with special needs;

• addressing issues related to the special insurance funds - eg those for bank employees, telecommunications workers and the staff of DEI - on the basis of proposals from the respective social partner organisations; and

• ensuring that government policies to address the problems of the special funds (both basic and supplementary) should not place a burden on the Social Insurance Foundation (IKA).

Commentary

Over recent years, GSEE has mapped out an integrated framework of initiatives regarding all the major issues related to the improvement of the economic and social position of Greece's workers, unemployed people and pensioners. These initiatives are aimed at highlighting well-founded alternative political approaches, by making demands and at the same time seeking to create broader social alliances, thus strengthening the institutional role of GSEE in Greek society.

In the face of the government's current proposals, GSEE and all the country's trade unions are in a constant state of mobilisation (of all types) so that, on the basis of the abovementioned positions and proposals, they can demand solutions regarding the social insurance system that will ensure not only its economic sustainability and social effectiveness, but also the means required for improving the services it provides (both qualitatively and quantitatively). (Giorgos Kollias INE-GSEE/ADEDY)