Social dialogue on reform of insurance system begins despite obstacles

The insurance system is emerging as an issue of high priority for the government. As a result, the government has invited the political parties and social partners to engage in dialogue on the planned changes. The trade unions have set conditions for their participation in the dialogue, as well as announcing industrial action against the presentation and adoption of the new budget; the unions are particularly concerned about reforms in relation to retirement and pensions.

Invitation to dialogue

The Ministry of Employment and Social Protection Υπουργείο Απασχόλησης και Κοινωνικής Προστασίας YPAKP, representing the government, has proposed that social dialogue begins immediately on the issue of reforming the insurance system on the basis of the existing Insurance Law 3029/2002. In letters to the heads of the parliamentary parties and the social partners, the ministry suggested that the dialogue be held within the competent parliamentary committees.

The issues to be discussed were also specified and include: unification of the insurance funds; reform of the institutionalised concept of arduous and unhealthy occupations; exploitation of the assets and reserves of the funds; and the system of awarding invalidity pensions. In relation to contentious issues such as the retirement age and pension amounts, assurances were given that the commitment of the Prime Minister, Kostas Karamanlis, to making no unfavourable changes will be observed. Nevertheless, it was unclear whether the report from the ‘Committee of Wise Men’, which mentions higher retirement ages and lower pensions, will be placed on the dialogue agenda.

Reaction of opposition parties

All of the opposition parties reacted negatively to the government’s intentions, with the left-wing parties abstaining altogether from the dialogue. However, the main opposition party, the Panhellenic Socialist Movement (Panellino Socialistiko Kinima, PASOK), has agreed to take part and has asked the government to make its position clear.

Trade union response

In response to the government proposal, trade union leaders have warned that they will not take part in a pre-textual dialogue without any specific agenda to examine the basic causes of the problem, or the viability or social effectiveness of the social insurance system. This position was dictated by the publication of reports such as the Committee of Wise Men’s report on the insurance question, or the Report of the Governor of the Bank of Greece. These reports refer to taking drastic measures that will have an impact even on people who are now availing of pension rights and not merely newly insured people.

The trade unions’ counterproposal suggests that the dialogue be held in the framework of the parliamentary committees, that it will include four thematic units and that it will continue only when the issues of each successive unit are resolved and taken forward. The units proposed, according to their order of importance, are: financing of the system; unification of insurance funds; support for low and average pensions and for maternity benefit; and the resolution of organisational and operational issues.

Financing of the system is the basic condition for the trade unions to take part in the dialogue, since the state is not paying its full share of 1% of gross domestic product (GDP), as agreed in the previous insurance system reform (Law 3029/2002). This has resulted in a lack of resources of at least €3.5 billion over the last six years.

Employers’ reaction

According to the President of the Hellenic Federation of Industries (Σύγχρονες Επιχειρήσεις, Σύγχρονη Ελλάδα, SEV), Dimitris Daskalopoulos, the insurance system is the most pressing issue not just today but also for future generations, and any solution requires widespread political and social consent. From the beginning, SEV was in favour of a multipartite and open dialogue aimed at finding a timely and viable solution to the problem. Thus, SEV has recommended dialogue on two levels. The first level concerns dialogue among the political parties and government, ensuring that every political party addresses its responsibility to society. The second level involves dialogue between the social partners – namely, the employers and employees – who should seek to find points of agreement and contribute certain proposals in relation to measures that need to be adopted. According to SEV’s proposal, the scope of dialogue on the insurance system will become clearer, more substantial and thus more efficient. The SEV president argues that the current form of dialogue, which ostensibly comprises ‘monologues in parallel’, has the risk of being ineffective and also gives the pretext of abstention.


Initiating social dialogue on the insurance system is the government’s top priority, following the renewed mandate it received in the recent election process in September 2007. Nevertheless, the social partners have adopted differing positions – even in relation to the framework in which dialogue should be held, that is, whether it will be held at bipartite level between the government and social partners or in the context of the parliamentary committees. Therefore, it is predicted that social dialogue on the insurance system, with the agenda of issues proposed by the government, will meet substantial social opposition. Already, the trade unions announced their intention to take token action in the form of a demonstration in November 2007, coinciding with the presentation of the 2008 budget, along with a 24-hour strike in December when the budget was to be adopted.

Stathis Tikos, Labour Institute of Greek General Confederation of Labour (INE/GSEE)

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