Greek central banker support for private sector involvement in pension system; Tsipras govt angrily reacts

28 May 2019
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Bank of Greece (BoG) Gov. Yannis Stournaras again made headlines – and again attracted the ire of the leftist Tsipras government – with his support for private sector involvement in the country’s social security and health system.

Stournaras, a former high-profile finance minister before 2015 and favorite political target of the outgoing government, emphasized that the margins for the continued financing of Greece’s social security system, only by the state, are now “very tight”.

He spoke in Athens during a 12th insurance conference.

The central banker pointed to the continued aging of Greece’s population as one of the biggest challenges facing the economy in the long-term, while also warning against the partial implementation or even overturning of reforms.

Additionally, he said recent decisions by high courts to overturn previous pension cuts – possibly with a retroactive effect – leave open the possibility of increasing social security expenditures.

In an angry response two days after PM Alexis Tsipras announced a snap election and his government’s resignation, the latter’s office on Tuesday said Stournaras’ positions on social security are absolutely aligned with those of rival main opposition New Democracy (ND) party leader Kyriakos Mitsotakis.

In oft-repeated charge by the hard left government to Mitsotakis’ call for reforms in social security, the same sources on Tuesday referred to the “infamous Pinochet pension system” – a reference to the Chilean dictator of the 1970s and 1980s and to a so-called “neo-liberal” economic system in Chile.

“Mr. Stournaras disputed even the possibility of funding universal access to healthcare services, in opposition to a primary (Tsipras) government choice to support our uninsured fellow citizens.”

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