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The Weekend Neos Kosmos : 25 March 2017
DIGITAL.NEOSKOSMOS.COM THE WEEKEND NEOS KOSMOS | SATURDAY 25 MARCH 2017 23 GREECE Greece's main expense: its pensions. The government argues that after 13 rounds of cuts, pensions are already low. Data supplied to The New Athenian by the labour minister in February shows that 58 per cent of Greece's 2.65 million pensioners earn under €800 a month before additional benefits. The government also argues that cutting pensions before restoring growth to the economy is problematic, because studies reveal that pensions are now the principal source of income for half of Greek households. The IMF, on the other hand, argues that the economy will never recover while pensions remain the government's biggest budget item, absorbing at least a third of tax revenue. The government's own pensions bill, brought to parliament last May, revealed staggering social security costs: notably that fully one half of the Greek debt, some €154 billion, had been incurred by borrowing to pay pensions. It is little wonder that the IMF insists on tax relief for businesses, rather than maintaining high taxes to redistribute the wealth to the poorest. Syriza argues that the latter will boost consumption and help business. The IMF argues that high taxes make business globally uncompetitive, and boosting consumption at home without boosting exports will create another unsustainable economy akin to that of the 1990s. Earning gap between private and public sectors persists The second heart-sinking statistic of the week was the other big reason for high taxes in Greece: the income gap between private and public sector workers. Meanwhile 62 per cent of private sector workers net under €900 a month, whereas 66 per cent of public sector workers net between €900 and €1,800 a month. Yet those private sector workers spend a billion euros a month paying the salaries of their public sector counterparts, making the public payroll the government's second-highest budget item. Neither group earns good money by European standards, but the figures, which were published by the think tank Labour Institute, seem to disprove a popular myth of the left, which Syriza also upholds: that what is suffered by one group is eventually suffered by the other. The figures rather seem to confirm that privileges earned through political pressure persist, even if diminished. In other words, the labour aristocracy Pasok created in the 1980s is still a 700,000-strong voting bloc capable of swinging elections. Greece, like France and Italy, has long been a statist culture and will remain so for the foreseeable future. This is good in that it provides strong popular support for socialised medicine and decently funded public education – essential prerequisites for a secure and civilised society. But it is bad in that it allows a class of party-appointed ne'er-do-wells to dwell inside the state culture and destroy its value for taxpayer money. Until political parties realise they must divest themselves of their appointees, Greece will run the risk of throwing out vitally important state services provided by hard-working doctors, nurses, and teachers at great personal sacrifice, along with the louts they must carry. *John Psaropoulos is an independent journalist based in Athens. This piece is reproduced with permission from his blog www. thenewathenian.com Hellenic police seize suspect parcels Eight potentially booby-trapped packages were to be sent to EU officials Eight parcels, suspected of being boobytrapped, were intercepted by police authorities in Athens on Monday, at a post office sorting centre in Northern Attica. The packages were about to be dispatched to an array of multinational companies, individuals, and political authorities throughout the EU, not least among them Jeroen Dijsselbloem, President of the Eurogroup, according to some reports. Counter-terrorism authorities have been on the lookout since last week, when two booby-trapped parcels were sent from Greece to the German Finance Ministry and to the International Monetary Fund offices in Paris. The former, addressed to Wolfgang Schaeuble, was seized by Ger- man police, but the latter exploded, causing minor injuries to an administrative officer. According to sources, the packages stated Greek politicians as senders; authorities suspect an urban guerrilla group, the Conspiracy of Fire Cells, which claimed responsibility for the first booby-trapped parcel, although this has not yet been established. New wave of crisis to hit Greece Analysts see 2015 history repeating Greece is at risk of reliving the days of 2015, when stalled negotiations led to financial instability and collapse of the banking system. At least, this is Bloomberg's prediction, in an analysis about the recent state of talks between the Greek government and the country's lenders. Another deadline passed on Monday, as the two sides have yet to reach an agreement after expressing irrecon- cilable differences in issues such as reforms, pension cuts, labour market regulation, and energy. According to the global financial news agency, this stalling marks another lost opportunity for Greece to get out of the crisis; prolonged negotiations have caused financial and political uncertainty, which has taken a toll on the economy, increasing the need for bailout. If no agreement is reached soon, then the country might not be able to meet its July deadline to pay €7 billion in debt bonds. "The Greek recovery is once more significantly delayed by politics," Nicholas Economides, a professor of economics at New York University's Stern School of Business, told Bloomberg. "Tsipras will blink at some point in time, the question is when." Greece’s new social security fund burdened with €100 million debt It was introduced as a fresh start, a clean slate, a new platform that would address the needs of all working Greeks, as well as pensioners. However, after only two months of functioning, the Single Social Security Entity is already struggling with the burden of its predecessors. The fund was in the works for more than two decades; it was designed to incorporate all previous social security funds - such as IKA (the largest fund of the state), OAEE (the traders and business owners' fund), NAT (for those working in the shipping industry) and so on - catering for all the country's citizens' health, pension and welfare needs. The new fund is already under pressure to cover for a pending debt of €100 million (AU$140,850,000), to health providers, accumulated during 2010-2012. The law made provisions for previous debts and other ob- ligations of the defunct funds which form EFKA. According to these provisions, if not serviced by the end of June, the impending debt will go to the General State Accounting House which will transfer it to the new funds budget, putting it at great risk. EFKA is already under stress to absorb €860 million by the end of October, in order to pay the 95,000 retirees who have applied for pensions and are still waiting after up to three years. Athens buses stranded in depot due for lack of funds More than 255 buses, in good working condition, remain stranded in depots in Athens as the Athens Transport Organisation cannot pay for insurance registration and roadworthy certificates. As a result of these vehicles staying off the roads, some routes have been less frequent, causing further distress to the passengers who rely on public transport to commute. According to a report by the daily Athens newspaper Ta nea, 91 of those 255 buses are fuelled by natural gas, their purchase cost being more than €200,000 each. The vehicles have not been officially withdrawn from circulation, returning their li- cence plates to the Ministry of Transport and paying a fine for not meeting with standards, but remain in a state of limbo. The official explanation, as presented by a spokesperson for the Public Transport Organisation, is that there are not enough drivers at the moment, due to a freeze in hiring. €300 million investment in smoke-free product manufacturing facility in Greece The investment by Philip Morris International is the biggest in Greece since the crisis started in 2010, creating 400 new jobs On Thursday Philip Morris International (PMI) announced an investment of approximately €300 million to convert the cigarette factory of Papastratos, PMI’s affiliate in Greece, into a manufacturing plant for the tobacco sticks to be used with its smoke-free product IQOS. This is the biggest investment to be made in Greece since the crisis started in 2010, and will see 400 new jobs created in addition to the 800 current employees. “This investment is further evidence of our progress towards a smoke-free future ... this facility will help enable us to meet growing demand from adult smokers,” said Frederic de Wilde, PMI’s Regional President for the European Union. IQOS is a heated tobacco product that was launched in late 2014 in two city test markets and is expected to be available in key cities in over 30 markets in 2017. It is one of four smoke-free product types from PMI to address adult smoker demand for potentially less harmful alternatives to cigarettes. Given the equipment required to manufacture the tobacco sticks is larger, the current facility area will be expanded with construction on the site expected to commence immediately, and production scheduled to commence in January 2018. Once fully operational, the plant located in Aspropyrgos will be PMI’s third facility solely dedicated to smoke-free products, and will have an annual capacity of around 20 billion tobacco sticks. PMI is the world’s leading international tobacco company, with six of the world’s top 15 international brands and products sold in more than 180 markets.
18 March 2017
1 April 2017