Social law

Despite the diplomatic statements that both sides understand the need for a fair agreement, the actual negotiation talks begin now, since during their 5-day visit the representatives of the institutions expressed only their objections and considerations about the proposals of the Greek government.

The government is seeking alternative solutions to cover the fiscal gap worth 550 mln euros following creditors rejection of a previous proposal. Labor Minister George Katrougalos is meeting with lenders mission chiefs from the European Commission, European Central Bank, European Stability Mechanism and International Monetary Fund at 4.30 p.m. on Wednesday.

Two new circulars of the Ministry of Labour and Social Security include clarifications on the new levels of retirement age of pensioners in the special Public Utilities and bank funds as well as for those ensured by the mass media employees fund (ETAP-MME).

Hundreds of thousands of Greek pensioners awaiting their monthly retirement benefits are left stranded without funds that they are eligible for. There are currently 330,000 pending pension requests for main and auxiliary pensions and 61,000 lump sum payments outstanding. Social Security funds, however, are unable to proceed with their files.

The Ministry of Labor drafts a new plan on social security contributions which will apply to all insured.

It provides a single social contribution of 20% for the main pension and an increase in individual contributions of other sectors which were previously decreased.

Greek fiscal targets will not be met unless deep cuts are made to pensions, even those that are lower than 1,000 euros per month.

Reforms to social security funds are sowing the seeds of panic to beneficiaries. The Labor Ministry has yet to provide its conclusions regarding the future for Greek pensioners, but there are a number of issues up in the air. These include:

– Pension rates, the new index to be created and the size of the slashes that are unavoidable

Deputy Minister of Social Security Anastasios Petropoulos  pre-announced an extraordinary contribution of at least 100 euros in order to support the insurance fund, which is on the brink of bankruptcy recording a deficit of 530 million euro.

A complete overhaul of the Greek pension system is being considered by Greek Parliament with basic rates at 360 euros. Current rates that are more than 1,000 euros will be restructured with dramatic slashes. The new rules are being presented to Labor Minister George Katrougalos and social organizations on Thursday.