Leaked ruling on pension law could harm fund

A leaked decision by the Council of State contesting several key provisions of reforms to the country’s pension system legislated by the leftist-led government, if finalized, could deal a huge blow to the umbrella social security fund (EFKA), throw the national budget off balance and strain ties with the country’s creditors as Greece prepares to exit its third international bailout.

According to Proto Thema newspaper, the country’s highest administrative court voted yesterday by 17 votes to 8 that a series of provisions in the pension law – including the induction to EFKA of hundreds of thousands of self-employed professionals and farmers, and changes to the way that workers’ social security contributions are calculated – violate the Greek Constitution.

Officials at the Labor Ministry would not comment on the leak yesterday. However, sources indicated that officials expect the matter to be resolved chiefly due to doubts about the Council of State’s competence to rule on matters relating to the “organization of the state.”

News of the leaked ruling came in the wake of appeals lodged by several professional associations against the pension law which, they claim, violates articles of the Constitution safeguarding the equal treatment of citizens.

The associations claim that the method of calculating social security contributions introduced by the pension law – which was passed in two parts, in 2016 and 2017 – puts an additional burden on self-employed professionals who have already been hard hit by the country’s financial crisis.

If the court’s ruling is made public in summer as expected, it could strain final talks between Greece and its creditors ahead of a scheduled bailout exit in August.