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Every one percent increase in unemployment - a loss of 250 million euro for the social security system

13 February 2013 / 19:02:06  GRReporter
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Anastasia Balezdrova

Greece’s social security system is about to collapse as alerted by the Institute for Employment to the GSEE confederation of workers. Expert estimates show that every increase in the unemployment rate in the country by 1% results in a loss of 250 million euro for the National Insurance Fund IKA and that every percent of unemployment is equal to 50,000 people who remain unemployed.

Greece has already left Spain behind as regards this indicator and the final rate for 2012 is expected to reach 24%. The Institute’s forecasts for 2013 are even more alarming as unemployment is expected to reach 29%.

"The additional 5% is equal to a loss of 250 million euro for the insurance system. When we add to this the amounts incorrect employers owe the funds, the amount of the loss reaches 7.2 billion euro," says the head of the Institute and professor in economics Savas Rombolis.

The situation of the social security fund of freelancers is bad too. The problem there is the non-payment of contributions. Of 780,000 insured people in total, 393,000 owe 5.9 billion euro and their obligations had been accumulated between 2010 and 2012, i.e. after the outbreak of the economic crisis in Greece.

During the same period, 184,000 people stopped their activities, making it almost impossible for them to pay the due 1.2 billion euro. In this case, the "black hole" of outstanding contributions amounts to 7.1 billion euro.

The management of the National Insurance Fund IKA is particularly concerned because some employers not only do not pay the contributions on time, but they do not respond to the calls to start paying their old duties in instalments.

IKA’s head Rovertos Spiropoulos said that the fund would use all tools provided by law to collect the amounts due. The measures include confiscation of property and freezing debtors’ bank accounts. The goal of the management body is to bring one billion euro into the fund by the end of the year.

At the same time, officials of the National Insurance Fund argue that they are unable to deal with the huge amount of work with which they have been burdened over the last few years. Their trade union accuses the government of dismissing 462 people instead of strengthening the services.

"Those are some of the most talented colleagues. This is my opinion as well as that of the majority of IKA’s employees," says the trade union president George Kiriakopoulos.

The specific employees were appointed to the insurance fund although they had applied for jobs in the recently public Agricultural Bank. The recruitment competition was held in 2008 but two years later, the government of the time cut the specific jobs in the bank with the first wave of budget cuts. Then, it offered those employees who had successfully passed the tests and whose appointments had been announced in the Official Gazette to start working for IKA, where they were allocated.

Less than a month ago, however, the Athens Administrative Court issued a decision that the appointments were illegal and the 462 employees were dismissed. As indicated by the trade union, in the meantime appointments of 462 other people for the same positions have been underway.

"In practice, they will replace the dismissed employees with other employees. We are not even talking about the voted law under which for every 1 appointed employee, 10 employees will have to leave," said Kiriakopoulos.

In her address, one of the dismissed employees does not hide her disappointment that "apparently my CV and professional background in the folder of the competition were not enough and I should have added my party affiliation as well". On the other hand, the trade union leader does not comment on the allegations about the existence of political motives behind the dismissals of the employees and the appointments of the other applicants. However, the fact is that the dismissed employees were appointed during the term of the PASOK government whereas New Democracy is holding the lead in the cabinet at present. The controversy is not different from that in the years up until 2010 when one of the parties in government replaced the other one and they were accusing each other of filling the public sector with "close friends".

The trade union indicates that the fast court decision under which the appointments of the 462 employees are unlawful is at least questionable, "bearing in mind how slowly the justice system in this country works".

However, the leader George Kiriakopoulos states, "We want both of these groups of colleagues because the staff is really insufficient". In support of his words, the trade union has announced data showing that the average time require to issue a pension in Greece is 15 months.

Unionists state that the protests will not stop until the matter is resolved in favour of the employees and they have announced a 24-hour nationwide strike in IKA’s branches for tomorrow.

Tags: SocietyUnemploymentNational Insurance Fund IKAInsuranceEmployeesDismissals
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