The government has said it would introduce a new pension system in 2027. It plans to submit the pension reform bills to the legislature, before the summer recess in mid-July, so there would be consultations with the political parties during the summer months. A formal review of the bills will commence when the legislature reconvenes in September with aim of having the final bills approved before the end of the year.

One possible obstacle is the opposition of the two big unions which voiced their objections to the reform bills, after the meeting of Labour Advisory Body on which employers and government are also represented. The bosses of the union federations Sek and Peo objected to both the content of the proposals, seeking higher pensions, as well as the process, on the grounds that it allowed little time for negotiations. The reform should not be rushed through, was the main argument.

This is because the unions want the minimum pension more than doubled so it is at the same level as the minimum wage (€1,088), which they misleadingly referred to as the poverty line. Labour Minister Marinos Mousiouttas, acknowledged the concerns of the unions on Thursday, but on Friday said there was no way the minimum monthly pension would increase by 125 per cent from the current €450 to reach the amount demanded by the unions.

The viability of the Social Insurance Fund (SIF) had to be preserved, and fiscal stability had to be safeguarded, said the minister. He also made an even more important point – the minimum pension should not become a subject of public debate. Having politicians or union bosses pandering to the public by calling for generous increases in monthly pensions, without any concern about the long-term viability of the SIF.

The video of Disy chief, Annita Demetriou agreeing with the leader of Direct Democracy, Fidias Panayiotou to fight for higher state pensions, in exchange of his party’s support in the president of the House elections, was a case in point. They resolved to increase monthly pensions, even though they do not have the constitutional power to do so, without any concern about the state’s ability to increase pensions.

The Federation of Employers and Industrialists, Oev introduced some rationality to the debate. The public debate for such serious matters “cannot be based on over-simplified approaches nor on the cultivation of the impression that there are ‘magic solutions’” it said, stressing it would not allow the future of the economy to be determined by proposals that “ignored economic and fiscal reality.”  Pensions should increase at the rate determined by economic development and the principle that pensions are determined by the level of contributions made to the SIF.

Anything else is irresponsible populism that will put at risk the economy.