Over 260,000 businesses in Greece, including big companies, have outstanding debts to social security funds. Pension fund officials say that without additional measures to restructure outstanding debt payments, the vast majority of businesses will go bankrupt, dealing a devastating blow to social security funds.
The Ministry of Labor leadership will have a new meeting with the troika representatives this afternoon at 3:00 pm, as it was announced yesterday.
Yesterday, a meeting was held at the Ministry of Labor between the troika of Greece’s international creditors technical teams, social security general secretary Panagiotis Kokkoris and the governors of Unified Supplementary Insurance Fund (ETEA), the Self-employed Professionals Insurance Organization (OAEE) and the Agricultural Insurance Organization (OGA) Anastassios Papanikolaou, Georgia Kotidou and Xenofon Verginis, respectively.
The meeting focused on the results of the ‘New Beginning’ arrangement for the payment of debts to social security funds a year after its enactment. The social security general secretary and the ETEA president noted that the social security funds governors presented figures on the course of the implementation of the new settlement, strongly doubting the effectiveness of the measure.
“Today’s meeting was very interesting and we were able to express our concerns over the effectiveness of the specific arrangement,” Kokkoris said after the meeting, adding that “we should care about people and not about numbers”.
A legislation passed in 2013 called ‘New Beginning’ (Nea Archi – Law 4152/2013) which provided for the restructuring of outstanding contributions to social security funds, inaccessible to the vast majority of companies and the self-employed who owe back payments to the country’s two largest social security funds: IKA (the Social Security Institute) and OAEE (the Insurance Organisation of the Self-employed).
The ‘New Beginning’ measure was implemented following an agreement between officials of the Ministry of Labor and the troika’s technical teams. It was intended to provide a way for businesses that had outstanding social security payments due to make these in parallel with their current payments. However it has proven to be a failure with 95% of businesses unable to benefit from the measure.
Of the 260,000 businesses with outstanding social security payments due, only 15,000 are making use of the New Beginning measure. The majority of these owe relatively small amounts (less than 50,000 euros) with those with the biggest debts largely unable to take advantage of the measure.
For IKA, the New Beginning measure was expected to raise 1.2 billion euros within the year, but that now appears overly optimistic if there are no further measures to provide a way out for those unable to meet their current obligations and make up older payments at the same time.
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