WRITTEN QUESTION E-0677/00

by Antonios Trakatellis (PPE-DE), Ioannis Marínos (PPE-DE) and Rodi Kratsa-Tsagaropoulou (PPE-DE) to the Commission

(9 March 2000)

Subject: Structural changes in the Greek economy social security and financing of the insurance funds

One of the most crucial problems that the next government of Greece will be called on to resolve concerns social security and, in particular, the financing of the insurance funds. The funds have accumulated enormous inherent deficits which threaten their normal financing and the payment of pensions. The problem has become an explosive issue as, owing to the ageing of the population, the ratio of workers to pensioners is constantly falling. At present, the total number of pensioners is equal to 60 % of the working population and represents approximately 25 % of the total population of Greece. Furthermore, the labour market is inelastic and there is high unemployment of over 11 %.

As the constant delays in taking serious measures to deal with the situation are exacerbating the problem, will the Commission state:

1. its position on the social security problem and on the Greek Government's inertia in not taking the necessary measures and carrying out the reforms which are de facto required,

2. the amount of the accumulated deficits of the insurance funds in Greece, what proportion of the national debt this represents and how those deficits will be dealt with without raising production costs and impairing competitiveness, increasing public deficits and creating further inflationary pressure,

3. in which direction the reforms must move to guarantee stable pensions and viable pension schemes,

4. how the insurance funds will be freed from government intervention which, by requiring that capital be tied up in government bonds and deposits with the Bank of Greece, results in unproductive forms of investment and use of the capital in the funds, and

5. how provision will be made for workers and pensioners alike in future without further loss of their income, bearing in mind that between 1985 and 1998 they lost an estimated 18 % of their real income?

Answer given by Mrs Diamantopoulou on behalf of the Commission

(26 April 2000)

In the field of social protection, the only binding Community standards are on equal treatment for men and women and on coordination of Member States' social security schemes for the benefit of migrant workers and their families.

The organisation, application and conditions for the granting of the various benefits are national issues, provided that the above-mentioned Community standards are respected.

However, since 1990, in view of the common challenges facing national schemes, the Commission has been involved in a process of joint reflection with the Member States. This led to the Council adopting Recommendation 92/441/EEC of 24 June 1992 on common criteria concerning sufficient resources and social assistance in social protection schemes(1) and Recommendation 92/442/EEC of 27 July 1992 on the convergence of social protection objectives and policies(4).

In following up these Recommendations, the Commission adopted a coordinated strategy on the modernisation of social protection, in particular through its Communication of 14 July 1999 on A concerted strategy for modernising social protection(2), which was confirmed by the recent Council conclusions of 17 December 1999 making provision for the establishing of a high-level group of Member States' representatives to monitor the application of this strategy. The group has been set up on a

provisional basis, and the Commission has adopted a proposal for a Council Decision formalising the its existence(3). The recent conclusions of the Lisbon European Council of 23/24 March 2000 also follow up this strategy.

The Commission does not have the information requested under points 2 and 4.

(1) OJ L 245, 26.8.1992.

(2) COM(1999) 347 final.

(3) COM(2000) 134 final.

(4) OJ L 245, 26.8.1992.