Busi­ness­peo­ple warn against a so­cial se­cu­rity con­tri­bu­tion hike

Kathimerini English - - Front Page - BY ROULA SALOUROU

In­dus­trial and tourism­sec­tor en­trepreneurs are ex­press­ing fears of a fur­ther de­te­ri­o­ra­tion in the com­pet­i­tive­ness of Greek la­bor and a surge in un­de­clared la­bor if em­ploy­ers are asked to pay more in so­cial se­cu­rity con­tri­bu­tions, which the La­bor Min­istry im­plied could hap­pen on Mon­day.

There has also been a strong re­ac­tion to the min­istry’s plans to merge main and aux­il­iary pen­sions in or­der to ap­ply the ze­rod­eficit clause for pen­sion funds. Sources say many peo­ple strongly sup­port the view that sup­ple­men­tary pen­sions ought to re­main au­ton­o­mous.

To that ef­fect, the gov­ern­ing board of the aux­il­iary pen­sion fund of salary work­ers (ETEA) is ask­ing La­bor Min­is­ter Gior­gos Ka­trouga­los to find a so­lu­tion to this so­cial, eco­nomic and po­lit­i­cal mat­ter with the main­te­nance of the re­dis­tribu­tive role of so­cial se­cu­rity through the preser­va­tion of the two au­ton­o­mous pil­lars of pen­sions, i.e. main and aux­il­iary pen­sions.

Pres­sure is grow­ing on the min­istry, which is now seek­ing ways to shield the up­com­ing re­form of the sys­tem with “re­dis­tribu­tive el­e­ments” that would over­come the re­ac­tions within SYRIZA.

The min­istry is still seek­ing resources of 900 mil­lion eu­ros, and un­less there is a spec­tac­u­lar change in the stance of the coun­try’s cred­i­tors, this amount will come from slash­ing pen­sions. Un­der pres­sure to make ma­jor cuts – even to pen­sions of less than 1,000 eu­ros per month – the min­istry is bring­ing back to the ne­go­ti­at­ing ta­ble a pro­posal to in­crease em­ploy­ers’ so­cial se­cu­rity con­tri­bu­tions by at least 2 per­cent­age points, al­though it is not out of the ques­tion that the bur­den may be shared by both em­ploy­ers and em­ploy­ees.

The pro­posal for the con­tri­bu­tion hike may have al­ready been re­jected by Euro­pean Com­mis­sion Vice Pres­i­dent Valdis Dom­brovskis, but lo­cal busi­ness­peo­ple are ex­press­ing great con­cern as the coun­try al­ready has among the high­est non-salary costs in the Euro­pean Union.

In a state­ment, they noted that the vic­tim of the con­tri­bu­tion hike would be the sus­tain­abil­ity of the so­cial se­cu­rity sys­tem, as the de­te­ri­o­ra­tion of com­pet­i­tive­ness would lead to a re­duc­tion in con­tri­bu­tions ow­ing to grow­ing un­em­ploy­ment and bur­geon­ing un­de­clared la­bor.

Euro­pean Com­mis­sion Vice Pres­i­dent Valdis Dom­brovskis (right) has re­jected La­bor Min­is­ter Gior­gos Ka­trouga­los’s (left) idea to raise Greek em­ploy­ers’ so­cial se­cu­rity con­tri­bu­tions by 2 per­cent­age points.

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