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Greece’s biggest social security fund (IKA) for private sector seeks 200mn to pay pensions till end of the year

Greece’s biggest Social Security Fund for the private sector IKA is seeking 200 million euros in order to be able to pay pensions for the following months until the end of the year.

“The governing board of the Social Security Foundation (IKA) on Thursday rejected the management’s request for money from the Social Security Capital for the Solidarity of Generations (AKAGE) for pensions for the rest of this year, while the board of the fund of the self-employed (OAEE) approved a similar request to the amount of 150 million euros.

For the last few years the ailments of the social security system have become more pronounced toward the end of each year, when the annual funding from the state budget starts to run out.

This year estimates put the total deficit of the system at around 3 billion euros, not including the 2 billion euros that IKA and OAEE owe to the healthcare service organization (EOPYY) or the 3 billion that IKA owes to the Manpower Organization (OAED).

Kathimerini understands that it was IKA’s debt to EOPYY, and the latter’s pressure for at least a partial repayment, that pushed the IKA administration to request a minimum of 200 million euros from AKAGE’s relatively small coffers, which contain around 400 million. The request was rejected by nine votes to seven, including the no vote from the Finance Ministry’s representative. At the same time, OAEE’s board approved the demand for 150 million from AKAGE, fearing that it would be unable to cover the amount for the payment of pensions. The self-employed professionals’ fund has already received additional financing from the state, amounting to 200 million euros, and is now seeking more.”

PS right now I am not able to tell you how many billions of euros Greece’s social security Funds lost through the famous “Greek Bond Swap” (PSI) in March 2012. And if one adds the black labor market that deprives the social security funds of revenues or the debts employers have to funds… well… it is a surprise that pensions can still be paid.

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  1. Pensions are still paid because the govt is sponsoring the pension funds. Their deficits are huge. They have no chance to be sustainable, there are more pensioners than people working!!!

    • “…there are more pensioners than people working.” And why do you think that is? You don’t have to be Einstein to realize that once you wreck the economy, unemployment goes through the roof. Or perhaps you don’t think that was the plan all along. Destroy the economy and the tax base and then claim that social programs have to go because there isn’t any money to pay for them. Neoliberal reengineering at its best. Soon coming to the rest of Europe.

      • Yes, there is a choice of interpretation about why they did this. It is a simple choice between neoliberal destruction of a weak welfare state (nothing like Scandinavia) and incompetent destruction of the greek economy simply because they prioritised collecting “their money” that had been squandered on useless private banks in France and Germany. I am inclined to the incompetence theory, because politicians are usually innumerate, semi-literate and arrogant. Of course, Schaueble is supposed to have been some sort of tax collection in his dirty past, so he knew well what he was doing to Greece. But the others are just ignorant lackeys, in my view.

      • Giaourti Giaourtaki

        What the rest of Europe desperately needs are hundreds of thousands more refugees, esp Bavaria and Austria, as this will force them to let their brilliant idea come true, just to make their Reich less attractive: Welfare for all Europeans on the same level! – as they believe refugees are coming for their welfare.

    • Yes. This is the direct result of austerity policies, and predicted by varoufakis amongst others. Since it is no more than a simple accounting identity, and 100% predictable, the Troika have the responsibility to pay it in perpetuity.

  2. the country is insolvent.only way to solve it is to reintroduce the drachma,keep state liabilities to pension funds constant and inflate the GDP.the EU would have done this …..only thing was their banks loaned the money…Greece goes belly up…their banks go belly up…we cannot have austerity now can we….that is only for the Greeks to suffer through.pathetic EU.

    • Giaourti Giaourtaki

      Folks that after all 6 years too funking too late come up with that Drachma-shite are future pensioners and hippies from abroad who hope to be god at the beach due too their then strong currency and in fact these selfish frats are faster with making slaves than any capitalistic patrone and I’m sure Greece will not like to host millions of these that will only come to steal beaches and houses and to feel familiar with the former owner as slave to austere toilet paper