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Mitsotakis & Stournaras agree: Greeks need neo-liberal policies in pensions, health care

Neo-liberal policies will be implemented in the social security and pensions sector, should New Democracy come to power. ND leader Kyriakos Mitsotakis and Bank of Greece governor, Yannis Stournaras, fully agree on that.

New Democracy (ND) leader Kyriakos Mitsotakis pledged to abolish the so-called Katrougalos law that cut pensions once he is in power> He will replace it with a sustainable social insurance system – one which is based on three pillars and includes the participation of the private sector – he said while addressing a meeting of the Greek Insurance Companies Union on Tuesday.

“The existing system has reached its limits and is unfair,” he said, explaining that his proposal for the insurance system is based on the principle of universal insurance for all but also on the principle of reciprocity, so that everyone enjoys the fruits of his or her labour, while guaranteeing solidarity between generations.

Mitsotakis also referred to the healthcare offered by public and private insurance, noting that Greeks currently spend the most on health in Europe while also paying social insurance contributions. Private and public-sector partnerships could lower the cost and improve the quality of the services on offer, he noted.

Mitsotakis is on the same wave length as the governor of the Bank of Greece, Yannis Stournaras (still PASOK?).

Addressing the same meeting Stournaras said among others that “fiscal pressures limit the state’s financial capacity to secure an adequate level of pensions, while on the other hand, the aging population reduces the ability of the economically active population to finance the pensions of the increasing number of pensioners.”

Stournaras nicely explained the three pillars Mitsotakis had in mind:

  • first pillar: pensions from the public system
  • second pillar: additional pensions form professional funds
  • third pillar: personal pension schemes products from the private insurance sector

I suppose neither Mitsotakis nor Stournaras can explain to Greeks on wages of 650 euros per month gross how to pay to make ends meet when they will have to pay contributions to a third “fund” like the Private Insurance. And that at the end of their working life, they will receive a bag of peanuts for a pension, only that the state’s share will be smaller.

BTW: Mitsotakis also pledged to reduce the targets of the primary surpluses, apparently whether the creditors agree or not.”The reduction of primary surpluses is ND’s main strategic priority,” he said adding  “We disagreed with the high surpluses… Only growth can bring sustainable primary surpluses, whereas now they arise through austerity.”

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