Athens News Agency: News in English, 05-06-28

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From: The Athens News Agency at <http://www.ana.gr/>

CONTENTS

[01] Greek FinMin announces dialogue over the country's pension system

[01] Greek FinMin announces dialogue over the country's pension system

Speaking to reporters, after an inner cabinet meeting, Alogoskoufis stressed that a discussion in Parliament on Monday highlighted a wider problem in the country's pension system and noted that a previous government's legislation, aimed at resolving the problem, had great weaknesses since it rolled over the cost of funding the country's Social Security Institution (IKA) to the public sector and the state budget.

"This is an issue that must be dealt with a long-term dialogue, as the government has said again in the past. No one can deny a dialogue over the pension system, the problem is there and a dialogue must proceed calmly to find out what it needs and what needs to be done to deal with this big problem for the country," the Greek minister said.

Commenting on a draft amendment tabled by ND deputy Miltiades Evert and supported by PASOK, the main opposition political party, Alogoskoufis said the government has approved draft legislation currently under discussion in parliament, and stressed that the government's plan would resolve a pension problem in the banking sector without burdening IKA or the public sector since Greek banks would pay the cost.

He also emphasised that dialogue on pension reforms had to begin straight away in order to a future crisis, presenting figures that showed the total deficit of the country's social insurance system set to soar from 4.1 per cent GDP in 2005 to 8.3 per cent of GDP in 2030 and 13.8 per cent of GDP in 2050.

Underlining that the system could not be converted from the present redistributive one to a fully-funded system, he also stressed the problems under the existing system, where a worker was paid a normal wage for the 35 years of his working life and then received around 80 per cent of that amount for another 20 years as a pensioner.

The minister emphasised, however, that the government would respect pledges not to raise the age of retirement or lower pensions and that the envisaged dialogue had a horizon long past the present government's term.

"Beginning dialogue is one thing and changing the status quo is another," Alogoskoufis stressed.

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