Greek benefit costs to drop below EU average, minister says

By Eleni Chrepa & Nikos Chrysoloras

The Greek government will bring social security costs for workers below the European Union average for the first time in July when it cuts contributions to the pension and health-care systems, Labor Minister Ioannis Vroutsis said.

Social security contributions will fall by 3.9 percent bringing the total reduction since 2012 to 5 percent, Vroutsis said in an interview in Athens Wednesday. The move is part of a suite of measures designed to boost Greece’s competitiveness and attract foreign investment as the country emerges from a six- year recession, he said.

“The reduction of social contributions alone will create about 30,000 new jobs in the next two years,” Vroutsis said. “We have done almost everything required to reform the Greek labor market.”

As Ireland, Spain and, this week, Portugal emerge from the strictures of their bailout programs, Greek officials are trying to show they can continue the work of repairing their economy as the financial pressure eases. After easing rules on firing, lowering compensation for dismissals and overhauling collective bargaining rules, the government ended its four-year exile from international markets last month, issuing 3 billion euros ($4.2 billion) of bonds at an auction that was almost seven times oversubscribed.

Among the improvements that have allowed Greece to lower employers’ costs: dead Greeks are not getting pensions anymore.

Database of deaths

A database Vroutsis set up last year registers all deaths in Greece allowing the government to halt benefit payments. Vroutsis, an economist by training, said he discovered about 40,000 people were collecting payments on behalf of dead relatives when he joined the ministry. The...