Athens News Agency: News in English, 08-03-06

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From: The Athens News Agency at <http://www.ana.gr/>

CONTENTS

[01] Gov't unveils long-awaited pension reform bill

[02] 'Solution to Cyprus a priority'

[03] FinMin discusses new AEK pitch

[01] Gov't unveils long-awaited pension reform bill

Employment and Social Insurances Minister Fani Palli-Petralia said on Thursday in presenting the long-expected draft law on reforming the country's creaky social security system.

Presentation of the draft bill came less than 24 hours after Greek Prime Minister Costas Karamanlis told an Inner Cabinet meeting that changes promoted by government "are positive and imperative".

"The longer (it takes to implement) the reform, the more painful the change," Petralia said during a televised press conference at the ministry to unveil the envisioned changes.

"The proposed reforms by the government ensure the public, redistributive and obligatory nature of the system and does not change fundamentals factors such as retirement ages, pension payments and social insurance contributions, while the state will continue guaranteeing the system," she said.

Under the draft law, presented to at Inner Cabinet meeting a day earlier, changes will be gradually implemented up to 2013, with three main reforms on the horizon: administration restructuring, focused interventions and institutional measures.

The restructuring plan for the country's cavernous pension fund administrations aims to cut an existing 155 pension funds to 13, of which five will be main pension funds, six supplementary funds and two welfare funds. Focused interventions include raising the retirement age to 60 for wage-earners with 35 years of work, with the addition of six-months annually from 2013.

The draft law also envisages an annual increase of 3.3 pct on pensions for employees for extending their work time by another three years after 35 years of employment, and offering counter-incentives for early retirement. In terms of working mothers, the government aims to offer extra incentives, and a ceiling on supplementary pension payments.

Institutional measures include the introduction of a social insurance registry for all working people, establishing joint inspection units to combat contribution evasion and creating a "Generations Fraternity Fund" to support the system, which will be funded with 4 pct of annual VAT revenues and 10 pct annually from privatisation proceeds. These funds will remain "locked" until 2019, she said.

Gov't spokesman

Outlining the unveiled reforms during the regular press briefing, government spokesman Theodoros Roussopoulos stressed that no funds and no group of workers were exempted and that the main criteria were to group funds with wage-earners in similar fields.

He clarified that the liquid and fixed assets of each existing fund would be placed into an autonomous special fund, while general retirement ages would not increase.

The government reforms were an attempt to organise a pension system that had developed "opportunistically and without programming, with bureaucratic problems due to a multiple fragmentation of services, and a labyrinthine and contradictory legislation".

He stressed the waste and high cost of the present system, noting that state spending on social insurance was rising steadily.

"In the next years, if nothing changes, this spending would have reached as high as 25 percent of GDP and we would have to pay for pensions all the sum now spent on health, education and culture, which would lead to the collapse of the welfare state," he said.

CAPTION: File photo of Greek Prime Minster Costas Karamanlis ANA-MPA / A. BELTES

[02] 'Solution to Cyprus a priority'

"The major goal, the major challenge is the solution of the Cyprus problem," the veteran leader of the leftist AKEL party on the island republic said, adding that implementation of the agreement will dominate his term.

Speaking at a Foreign Press Association of Athens (FPA) luncheon in the Greek capital, Christofias said he will gauge the intentions of the Turkish Cypriot side during a meeting with T/C leader Mehmet Ali Talat, tentatively scheduled for between March 17 and 24.

He also expressed his "heightened satisfaction" over his high-level contacts in Athens, as Christofias made his first official visit overseas to Greece following his election victory on Feb. 24.

In response to press questions, Christofias said the July 8 agreement is the basis for negotiations, stressing that the Annan peace is not "transferable".

"The only agreement that exists, beyond the high-level agreements (1977 and 1979) is the Agreement of July 8, which is procedural and substantive," he said.

Moreover, Christofias said he would like to speak frankly and openly with Talat without previous "exploratory" statements.

Additionally, he said the main and overriding priority is a solution for the long-standing Cyprus problem, thus there is "no intention" to open other fronts, namely, the removal of British sovereign military bases from the island.

Caption: File photo of new Cyprus President Demetris Christofias. ANA-MPA / S. PANTZARTZI.

[03] FinMin discusses new AEK pitch

Details of the plan will be announced at the end of the month, according to Nikolaidis, a one-time Greek international striker for AEK and Atletico Madrid.

In terms of strictly club news, AEK's president said the team has located a new coach, although an announcement will come at the end of the current season. He also said AEK will pick up an option to keep talented Argentinean striker Ismael Blanco.

CAPTION: FinMin George Alogoskoufis (L) meets with AEK president Demis Nikolaidis (R) in Athens on Thursday, 06 March 2008. ANA-MPA/M. KIAOU

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