The triumphal way the government presented its proposals for pension reform on Wednesday should worry everyone. One of the most serious issues facing our society was treated as part of the communication game, just another opportunity for the president to boost his political capital in preparation for his re-election drive. The overriding impression was that the government’s only concern was to increase pension payments, because this is a vote-winner (the reason they want the reform implemented in 2027) without giving much thought to issues such as the ageing population and the low birth-rate that have a big impact on pension funds.

President Nikos Christodoulides had a short film of himself talking about the pension reform prepared and broadcast on the day the government proposal was presented to the Labour Advisory Board. He had to take personal credit for “the largest and most substantial reform of the pension system carried out since 1980.” The reform was “based on two non-negotiable principles: more respectable pensions today and a viable social insurance fund for tomorrow,” he said and added: “Our message to every pensioner, to every worker, to every young person is clear – this reform is being done for you.”

Reform of the pension system was turned into an excuse for election campaign soundbites and slogans. Labour and social insurance minister Marinos Mousiouttas followed the same script as the president. Every one of the 123,000 pensioners would receive an increase in the amount paid to them, he said. “Some 50,000 pensioners will receive an increase in excess of €100 per month, while future pensioners who earned low wages during their working life could receive increases of up to 60 per cent,” Mousiouttas added.

Government generosity, which will cost the social insurance fund an additional €50 million a year, will also cut the penalty for those who take their pension at 63 from 12 per cent to 7.5 per cent, Mousiouttas announced. In other words, the government, as a concession to the unions, which were demanding the abolition of the penalty, has decided to reduce the disincentive for taking early retirement. Some economists have said this would be tantamount to lowering the retirement age, which is unjustifiable when life expectancy is rising and the birth rate is way below the replacement rate. While in the big economies of the EU such as Germany, Italy, the Netherlands, Belgium retirement age is 67, the Christodoulides government is looking to lower it, because this would be a popular move.

This is why it is very difficult to trust the government’s assumptions, calculations and forecasts for the reforms. The only consideration appeared to be the increase of low pensions. Nobody objects to this, but can the social insurance fund afford this? And would the higher pensions be sustainable in 10 years, without increases in monthly contributions? The government gave assurances it would not increase the contributions and described the extra €250 million as ‘subsidised contributions’ that would be needed to fund the higher pensions over the next five years, to eventually be covered by the government repaying the €12 billion it owed the fund. It said this would be repaid over the next 40 years, for which no plausible documentation was provided.

This underlined the dangerous superficiality with which the government has approached the “most substantial reform of the pensions system,” which is being used as an election measure. The government insists on its approval now so it can be introduced in 2027 so it can win the pensioner vote. It would not hear of the idea of union bosses, who said this was too important a reform to be rushed though parliament without in-depth study by experts and debate. We cannot afford to get it wrong because the consequences could be catastrophic for people and the economy a few years down the road.

When the Labour Advisory Body meets on Friday to discuss the reform proposals the suggestion of putting off the approval of the reform package should be raised by unions and employer organisations because such major reform must be thoroughly examined and discussed. The parties must also back this approach, because pension reform, rushed through for electoral reasons could go badly wrong for the country.