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There will be no new tax before the end of the pension system reform

02 February 2010 / 18:02:42  GRReporter
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At today's committee meeting, which was attended by Social Minister Andreas Loverdos and Economy Minister George Papakonstantinou, it became clear that no new tax will be imposed to the pension insurance funds. 

Loverdos Minister noted that for the first time the insurance treasury funds for solidarity between generations was granted the sum of €580 million. This fund was established during the government of Kostas Karamanlis, with the idea that from 2019 it will pay the pensions of the insured. For the moment it is not clear how much money will enter this fund each year, nor the manner in which they will be spent. 

Minister Papakonstantinou said that there will be an increase in the funding "Insurance Capital of solidarity between generations,” coming from VAT income, from percentage of revenues from privatization. The Minister vaguely mentioned that there is a probability that money will enter the fund from new resources like the lottery, gambling, etc. 

At today's meeting Mr Papakonstantinou excluded the possibility that additional money will enter the funds this year because the compliance to all objectives, which the government has set is a matter of “national survival.” Meanwhile, the unions stressed that €4 billion is needed per year in order to avoid the collapse of the system. 

Minister Papakonstantinou expressed his position against the imposition of new tax reform before the end of the pension system and tax system reforms. The Minister of Economy defined as an interesting idea to exploit the real estate of insurance funds, so that the structural changes in the system will fill the gaps until they become “fruitful”. 

The Commission of Experts continues its meetings next Tuesday and the major topic for discussion will be the overriding structural changes in the existing pension system. Mr. Loverdos stressed that the proposals of the commission will be ready by the end of March and said that the system must be financed very well. 

In a meeting between the Social Minister and the CEO of the Bank of Greece Georgios Provopoulos discussed was the issue of bank debts accounting for €460 million, which Loverdos Minister says it must be paid. The deficit of pension funds IKA-ETAM amounts to €1 billion, after they were connected to other funds in the period 2004-2010.

Tags: Social security in Greece Retirement Pension fund IKA
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