Social Security (Minimum Standards) Convention, 1952 (No. 102) - Greece (Ratification: 1955)

Individual Case (CAS) - Discussion: 2014, Publication: 103rd ILC session (2014)



A Government representative wished to clarify certain issues relating to social security minimum standards raised by the Committee of Experts, which should be seen in the context of the recession and austerity policies adopted in the last four years in order to ensure the sustainability of the economy in general, and of the social security system in particular. Recent policies and legislative reforms sought to achieve the latter goal by granting and securing adequate benefits for the insured population, as well as maintaining the beneficiaries and their families “in health and decency”, as referred to by Article 67 of Convention No. 102 and the European Code of Social Security. While emphasizing the Government’s efforts to shield low-income pensioners from further reductions, it should be noted that the rate of social security benefits was determined according to a scale fixed by the competent public authorities in conformity with the rules prescribed in the Convention. Therefore, while there was no question of a lack of conformity from a legal point of view which would fall within the scope of competence of the Committee of Experts, he wished to share certain information on the social policy measures taken along with the austerity measures since 2010 in order to guarantee an adequate level of benefits in line with the Convention and the Greek Constitution. He recalled that the Greek social security system had been designed to provide social protection to all citizens, and especially to vulnerable groups. Over time, however, undeclared work and contribution evasion had negatively affected the sustainability of the social security system. Thus, having as a main objective the viability of the system, and in accordance with the terms of the economic adjustment programme set by the “Troika” (that is, the European Commission, the European Central Bank and the International Monetary Fund), the Government had decided to elaborate the necessary political measures and apply them aimed at the rationalization and sustainability of the system. It was absolutely necessary in the current economic environment for the system to remain sustainable and for the State to fulfil its obligations towards its citizens and its international obligations.

He observed that the pensions granted to all workers were above the rates provided for in Articles 65–67 of Convention No. 102. Since 1 January 2013, no further reductions had been imposed on pensions up to €1,000. Reductions had been imposed on higher pensions and the reduction was scalable, distributed according to the income of pensioners. Socially vulnerable groups, such as persons with disabilities, were excluded from these reductions. Furthermore, the viability of the system was ensured through actuarial studies conducted by the National Actuarial Authority every three years for the entire social security system. These studies were submitted to the Ageing Working Group of the European Commission of the Directorate General for Economic and Financial Affairs, when so required by national law or memoranda commitments. The National Actuarial Authority applied the models set by an ILO group of experts to conduct actuarial studies, with ILO technical assistance since 2008. Following the same model, the second actuarial study would be conducted in 2014. The Government had successfully cooperated with international organizations and received their assistance with a view to addressing critical situations, taking into account the possible financial implications of such cooperation. Furthermore, in order to preserve the viability and the long-term sustainability of the insurance system, the competent public authorities had developed and applied IT systems to avert abuses against the social protection system, which was extremely important for the financial sustainability of the system without any further reduction of benefits. As a result of the establishment of IT systems such as “Ergani”, “Arianne” and “Helios”, the percentage of uninsured labour had fallen within a year from an estimated 38.50 per cent to 23.61 per cent; valid “snapshots” of demographic and personal changes in the status of beneficiaries were immediately updated; and control and monitoring of payments was secured, so that pensions and welfare benefits were safeguarded, while averting any abuse or fraud. At the same time, efforts were made to further improve the sustainability of the social security system by collecting contributions through a new unified mechanism, the Social Security Contributions Collection Centre (KEAO), as well as by establishing an Insurance Fund for Generations Solidarity (AKAGE).

Regarding the reference to the impoverishment of the population, he observed that, according to the Committee of Experts, the Government had included in its report data from a study by the Small Enterprises Institute of the Hellenic Confederation of Professionals, Craftsmen and Merchants (IME GSEVEE). However, this was not accurate, since the statistical data used by the competent authorities of Greece, and considered valid by the European Union (EU) and internationally, were only those produced by Eurostat, the National Statistics Authority and the National Actuarial Authority. The prevention of poverty was one of the top priorities for the Government, which was aware of the social consequences associated with the increasing rates of poverty in Greece. Special efforts had been made in the design and application of policies within the financial capabilities of the country aimed at the prevention of poverty. Firstly, the Ministry of Finance had taken the decision to dispose of a part of the primary surplus of the general government budget in 2013, equal to €450 million, for the payment of a “social dividend” as a support for families and individuals based on income criteria, which was paid as a lump sum, tax-free and subject to no deduction, or confiscation, or offset by any debts to the State or credit institutions, and would not be included in the income criteria for the payment of the Social Solidarity Allowance (EKAS) or any other social or welfare benefit. Moreover, actions or policies associated with services for providing housing, food and social support for the homeless were funded through the same budget. In an effort to shield low-income pensioners from poverty, an exemption from monthly pension cuts for those receiving low main pensions, as well as certain cases of invalidity pensioners or family members, had also been provided for. In addition, income tax reductions for low incomes and for specific categories of disabled or war victims, as well as tax exemptions for certain categories of salaries, pensions and allowances, had been provided for. Secondly, a guaranteed minimum income had been established in collaboration with the World Bank. The programme was addressed to individuals and families living in conditions of extreme poverty, providing beneficiaries with income support in combination with social reintegration policies and policies to combat poverty and social exclusion when applied when necessary. It was a pilot programme applied in two regions of the country with social and financial criteria in 2014, the results of which would be taken into account so as to expand it throughout the country within the following year. To this end, a working group had been established with the participation of officials from the Ministry of Labour, the Ministry of Finance, the Council of Economic Advisers, the European Commission Task Force for Greece and the World Bank. The pilot implementation of the programme would be launched in the last quarter of 2014. The budget for the programme was set at €20 million. Thirdly, a long-term unemployment benefit had been established for persons aged between 45–66 years who had already exhausted their right to the regular unemployment benefit. In conclusion, he said that the Ministry of Labour, Social Security and Welfare had established three national targets in October 2010 which were incorporated in the National Reform Programme 2011–14: (i) reduction in the number of persons at risk of poverty and/or social exclusion by 450,000 by 2020, which meant a reduction of the relevant rate from 28 per cent in 2008 to 24 per cent in 2020; (ii) reduction in the number of children at risk of poverty by 100,000 by 2020, which meant a reduction of the relevant rate from 23 per cent in 2008 to 18 per cent in 2020; and (iii) development of a “social safety net” against social exclusion, including access to basic services, such as medical care, housing and education, which represented a non-quantified objective highlighting the need and willingness of the State to increase access to basic services in the framework of the third pillar of the active inclusion policy. He emphasized once again that, despite the dire economic crisis and the loan agreements commitments, the Government was taking every necessary action to maintain decent living standards for the entire Greek population.

The Employer members said that the present case resembled the case concerning the Greek Government’s implementation of the Right to Organise and Collective Bargaining Convention, 1949 (No. 98), which had been examined by the Conference Committee in 2013, as both cases focused on the economic and social situation in the country and involved extensive discussions on austerity measures and the influence of the Troika. Although the observations under both Conventions should have addressed compliance with international labour standards, that was overshadowed by a discussion on the general economic and social situation of the country. The policy discussion was overwhelming and did not note the Convention’s provisions with which the Government had not complied. The Committee was not intended to deal with issues of political economy and the Employer members were concerned with the nature of the observation. The opinions of the Committee of Experts had a certain amount of authority as they were written by a neutral and impartial body of labour law experts and were generally very helpful to the Conference Committee. However, the present observation was persuasive rather than objective. Firstly, certain terminology, such as the term “austerity policy”, was not as objective as the term “fiscal consolidation”, which had been used in the ILO’s 2013 tripartite Oslo Declaration “Restoring Confidence in Jobs and Growth”. Secondly, the observation was unnecessarily exaggerative, such as referring to the term “programmed impoverishment of the population”, which was not objective and not related to the Government’s compliance with Convention No. 102. Finally, the observation called on both the Government and the Troika to prevent the collapse of the social security system, but only governments were bound by ILO Conventions, and therefore asking the Troika to deal with the observation seemed to be a fundamental misunderstanding of the process.

The observation analysed three broad areas: (1) protection of the social security system against continuous austerity; (2) stopping the increasing impoverishment of the population; and (3) establishing a national social protection floor. Concerning the first area, the observation implied strongly that matters could have continued unchanged without the Troika’s involvement, which was not accurate. The Government was experiencing a tremendous economic crisis based on structural causes, which was not only an economic cycle. The Government had an enormous budget deficit which was not sustainable and required unprecedented fiscal measures. The observation failed to note that the social security system had been facing pressure even before the crisis, as had been illustrated in the 2007 ILO actuarial study on the prospects for Greece’s main social security and pension funds which had demonstrated significant financial gaps at that time. Nevertheless, the Committee of Experts had not made an observation during the critical years from 2000 to 2010. Concerning the second area, the Committee of Experts had criticized the reduction of monthly pensions. The Employer members understood that this was a temporary measure that affected only one-third of pensions, and the goal of that temporary reduction was to stabilize the system so that it did not collapse. That was not prohibited by Convention No. 102. The observation was also not clear when it called for the Government to prepare “the necessary policy corrections”, as the term was vague in that context. If the term meant that the Government should correct the pension system through structural reform, the Employer members could agree, since the Government seemed to be taking steps in that respect. If, however, it meant that the Government should return to the past, the Employer members did not agree. Concerning the third point, while the establishment of a social protection floor was generally desirable, the ratified parts of the Convention did not require that and the observation did not note any provisions with which the Government was not in compliance. The Government did have forms of social protection, including free health care, so it was unclear how that issue under Convention No. 102 deserved a double footnote. The Employer members were willing to consider discussion on the matter.

The Worker members considered that the case of Greece provided an opportunity for considering the principles and values that had to be respected when a country was in the grip of the economic crisis. That country was a member of the EU and the Eurozone. As a result, it was under the supervision of three institutions, the Troika, of which two, the European Commission and the Central European Bank, were EU institutions. As pointed out by the Committee of Experts, the issues raised did not fall uniquely under the responsibility of Greece, but also concerned the principles and methods of the EU. The observation of the Committee of Experts noted that drastic measures on pensions accounted for half of its budgetary savings in 2013. It also noted that because of the financial difficulties of enterprises, the collection of contributions had almost ceased, further compromising the viability of the system. It was clearly the principle of austerity itself that was at stake. According to the observation, some retirees now only had pensions well below the poverty threshold, and even the subsistence threshold, all in the absence of a minimum safety net to address the shortcomings of social security. The restrictions also affected the health sector, which was a significant item of expenditure for older members of the population. The supervisory bodies of the Council of Europe endorsed the criticisms of the Committee of Experts. In December 2012, the European Committee of Social Rights had noted violations of the European Social Charter following complaints from retirees’ associations. The Committee of Experts endorsed the recommendations of the Committee of Ministers of the Council of Europe on the application by Greece of the European Code of Social Security. The Committee of Ministers considered that those who were better off should bear a larger share of the burden, but that the opposite was happening in Greece. It noted that Greece gave greater importance to its financial responsibility to its creditors than to its social responsibility towards its people. The European Commission, which was a member of the Troika, seemed to have taken into account the calls from the Council of Europe and the ILO for socially responsible measures for structural adjustment. It was to be hoped that this would soon be reflected in practice, with the support of other institutions and the EU Member States.

The Worker members fully agreed with the three recommendations of the Committee of Experts. First, the Committee of Experts called on the Government to adopt instruments allowing it to assess the impact of the measures taken on the application of international standards and on the sustainability of the social security system. Second, it recommended the introduction, in a supplementary capacity, of a basic social security scheme for those who were no longer entitled to social security benefits. In supporting this recommendation, the Worker members were not proposing that social security be replaced by social assistance, which would be an unacceptable backwards step. However, as recalled by the Social Protection Floors Recommendation, 2012 (No. 202), social protection should be universal, with social security being supplemented, if necessary, by a social assistance component. Finally, the Committee of Experts recommended to the Troika and Greece’s partners within the EU to take these social security concerns into account more fully. In that respect, it should be recalled that, under the Oslo Declaration, the tripartite constituents had considered that the measures contained in the Global Jobs Pact were relevant and should be effectively implemented. They had also agreed to promote employment, as well as adequate and sustainable social security systems, and called upon the Office to promote synergies and policy coherence with international and regional organizations and institutions, particularly the IMF, OECD, the World Bank, and the EU, on macroeconomic, labour market, employment and social protection issues. The Oslo Declaration might inspire the conclusions of the Conference Committee.

The Worker member of Greece indicated that the report of the Committee of Experts had exposed the real circumstances of non-compliance of the Convention by the Government of Greece, which was paradoxical. When the crisis had dramatically increased the demand for social protection, the adjustment programme had not only reduced its supply, but also state resources for that purpose. While the Government assured that the social protection system was viable, that monthly pensions up to €1,000 were maintained, and that the pensions of persons with low incomes were shielded, the minimum standards of the Convention were not being observed. The regular and sustainable provision of benefits, the enhancement of confidence by the insured in the national social security administration and a socially responsible system, which were required under the Convention, did not exist in Greece. The country’s universal social protection system was rapidly being transformed into an individualized and privatized system through the identification of the social protection system as one of the targets for structural adjustment under the loan agreement, along with wages. The reduction in social protection expenditure was entrenched in the state budget and the Midterm Fiscal Strategy Framework (MTFS) 2015–18. The reduction included pension, maternity and child benefits. These measures would take effect in 2014. The Bank of Greece had indicated in its monetary policy report of 2013 that, based on an assumption that the State’s financial capacity would be reduced, the main benefits would be significantly reduced after 2020 by up to 50 per cent, leaving as the only certainty the basic pension of €360 a month, which was below subsistence level and contrary to the Convention.

The impact of the adjustment programme on the social protection system and on the economy was extreme. The Labour Institute of the General Confederation of Greek Workers (INE/GSEE) estimated that, after 2015, the social protection system would urgently require new resources due to falling contributions, rising unemployment and the reduction in State funding for the system. It was estimated that it would take two decades for unemployment to revert to the 2009 level and for revenue to be generated for the social security system, provided that the economy grew at 3.5 to 4 per cent annually, which was not very likely. Some 1.1 million workers were suffering wage arrears ranging from three to 12 months. According to the labour inspectorate, one out of two employers was not paying workers on time. Those workers were invisible to the social security system in terms of unemployment benefits and contributions, and were at risk of losing access to health care. Moreover, the so-called “zero deficit clause”, agreed between the Government and the Troika for social security funds, scheduled to take effect as from 1 July 2014, would affect some 4 million people with their auxiliary pensions being reduced by 25 per cent. The abolition of many taxes would deprive the social security system of €1.7 billion. In that connection, she noted that pensions constituted the main source of income for 48.6 per cent of households. One in two households were supported by pensions as retired parents increasingly supported their jobless children and their families, according to a study by the Small and Medium Sized Enterprises’ Institute of the IME GSEVEE. With regard to the governance of the social protection system, the Government had failed to address contribution evasion and the need to increase the resources of the system. The social security system owed the main public health-care provider €421.4 million in contributions which it had collected but had failed to distribute. Alternative anti-crisis measures could have allowed Greece to pursue difficult reforms, while preventing social devastation. There was no inherent contradiction between social and economic efficiency. Social security was not only a basic human right, but also an economic necessity that provided income security and enhanced productivity, employability and growth. It could effectively mitigate the economic and social impact of downturns, and speed up inclusive recovery. In conclusion, she called on the Committee to deliver a strong message that the rights and social objectives enshrined in the Convention were inextricably linked to economic objectives and were a requirement for effective recovery. The Committee should urge the Government to comply with the Convention in order to combat poverty, ensure effective recovery and guarantee the financial viability of the social security system, based on frank and effective social dialogue.

The Employer member of Greece recalled that the Federation of Greek Industries had stated, well before the crisis, that the Greek pension system was not viable, mainly owing to high levels of benefits and generous conditions for granting them, the ageing population and tax evasion fostered by the absence of computerized systems and an inefficient administration. Unfortunately, it had not been heeded and the crisis had taken the country by surprise. The measures taken, which were necessarily brutal, were aimed primarily at the organization of a viable system: computerization, elimination of fraud and undeclared work, adjustment of the age of retirement to life expectancy and strict actuarial oversight. Deferred for too long, those measures were not temporary, but aimed to guarantee the viability of the system and the Government should be congratulated for them. Furthermore, temporary measures responded to immediate budgetary priorities, such as the reduction in pensions above €1,000 which, as it did not affect the 67.5 per cent of pensions below that level, should not entail “impoverishment”. That amount was higher than the commitments made by the Government under both Convention No. 102 and Article 12, paragraph 2, of the European Social Charter. In that regard, the European Committee of Social Rights had rejected the appeal of the Federation of Employed Pensioners of Greece (IKA–ETAM) and had found that the reduction measures did not contravene the applicable provision in the Charter, while the European Court of Human Rights had ruled, in its decisions of 7 May 2013, that the reduction of pensions was not disproportional to the general interest objective. Those measures had not entailed “impoverishment” since, through the reductions or exemptions of tax on the lowest incomes, it was principally high or medium-level pensions which had been reduced. With regard to the consequences of austerity on the capacity of social assistance to protect the population from poverty (an issue which did not fall directly under Convention No. 102), it should be noted that, already before the crisis, the Greek social protection system was not efficient. With the prolonged recession and increasing unemployment, the demand for social benefits had risen as part of the population approached the poverty threshold. Although the level of spending appeared comparatively weak, the following facts should be taken into account: the guarantee by the national health system of access to hospital and outpatient care; the high proportion of home owners; a guaranteed pension of €360; unemployment insurance of 12 months combined with specific benefits for young people and long-term unemployed persons; the allocation of a large part of the 2013 primary surplus to social measures; and the replacement of various family allowances with a one-off allowance subject to family income. The above non-exhaustive list illustrated that, despite the absence of a guaranteed minimum income, poverty reduction measures had been strengthened, particularly through income-related benefits. Social protection was, nevertheless, related to economic development and prospects for recovery from the crisis, through support measures for enterprises and productivity. The solution to the issue of poverty could not be based solely on benefits. It also implied a development policy, reasonable taxation and a capacity to pay tax. Greece was depending on the technical assistance of the EU and the ILO to that end.

The Worker member of Spain said that the adjustment policies of Greece constituted a major attack on the country’s citizens and on Convention No. 102. The unfair and disproportionate reduction (30 per cent from 2009 to 2013) in the amounts of pensions had driven thousands of pensioners into poverty. The State had shirked its responsibility for the social security of its citizens and had confiscated resources designed for pensioners to reduce the public debt. Moreover, owing to the conditions of the Troika, which had imposed drastic cuts in pensions, the future viability of the Greek public pension system had been seriously compromised. The cuts affected people who, because of their age or disability, were not in a position to remake their lives or return to the labour market. Nevertheless, the Government was unwilling to restore the standard of living which retirees had lost. On the contrary, from 2015, it would not even be guaranteeing an acceptable minimum level, and everything suggested that it was seeking to turn the system based on contributions into one increasingly dependent on assistance. The conditions imposed by the Troika in the areas of labour and pensions had increased unemployment, reduced wages and pensions and made precarious and undeclared employment more widespread. Together with the ageing population, such deplorable conditions were the real problem for the Greek pension system. In addition, the raising of the retirement age, when living and working conditions were worse for older workers, was reducing expectations in relation to pensions even more. In 2012, the financial situation of the public pension system had worsened even further, since it had been decided that the cost of eliminating the Greek debt would basically be borne by the Greek pension funds. As a result, it was necessary, firstly, to guarantee a minimum pension to provide a decent standard of living. Secondly, the amounts of pensions that had been excessively reduced should be restored to the pensioners concerned. Thirdly, for pensions to be adequate, secure and predictable, they should not be subject to constant revision, and the pension system should not be used in connection with issues unrelated to its purpose.

The Government member of the Russian Federation recalled that the Declaration of Philadelphia provided that “Poverty anywhere constitutes a danger to prosperity everywhere”. In that respect, the situation in Greece could not be ignored. It was characterized by a contraction of GDP by 25 per cent, an unemployment rate of 27 per cent, more than 1 million people without jobs or income, lower pension levels, an increase in the retirement age, and the curtailment of social protection to meet the demands of international creditors. Similar circumstances in Spain and Portugal in recent years had led to a surge in the number of representations under article 24 of the ILO Constitution. The ILO paid great attention to the fate of the Eurozone because, as pointed out by the Director-General, massive youth unemployment created the risk of a lost generation who would never know decent work. The Government should be guided by the Oslo Declaration and Recommendation No. 202. It should take the concrete step of seeking technical assistance from the Office.

The Worker member of France wished to draw attention to the dramatic consequences of the structural adjustment policies in Greece. Poverty affected the middle class, homelessness was growing and crime was increasing. The suicide rate was following the level of long-term unemployment. Children were particularly affected by the withdrawal of the State from its social responsibilities. Infant and perinatal mortality was increasing. A recent UNICEF report indicated that one in three children in Greece was at risk of poverty and social exclusion. Malnutrition was now affecting school children. There was a resurgence of the abandonment of children by families who had fallen into extreme poverty. The abandonment of the fundamental right to social security was a result of the choice to give priority to economic freedoms over human rights. That choice was unacceptable.

The Worker member of the Netherlands considered, referring to the Declaration of Philadelphia, which set out the fundamental objective of the ILO and its responsibility to examine international policies in light of that objective, that it was appropriate for the Committee of Experts to assess the social impact of the economic and fiscal austerity policies in light of Convention No. 102, without expressing its view on the austerity measures as such. The result of this assessment revealed that the country was no longer in compliance with the Convention. For example, while the unemployment rate was very high, particularly among youth, the number and percentage of those receiving unemployment benefits had decreased to only 10 per cent of the registered unemployed due to the stricter eligibility criteria and to the short duration of protection. This situation amounted to non-conformity with Article 21 of the Convention concerning the composition of the persons who must be protected. Even persons who were seriously ill and pregnant women could no longer count on the health-care benefits provided for under Articles 8 and 10 of the Convention. For those reasons, the austerity measures had been implemented without sufficient consideration to their impact on the country’s social security system, which had been reduced to a level far below the protection required under the Convention. She therefore urged the Government and the Troika to assess the policies and to take measures with a view to preventing the collapse of the social security system and to bring it in line with the Convention.

The Worker member of the United Kingdom agreed with the concern of the Committee of Experts that the Greek social security system had been undermined and could not achieve the objectives set out in Convention No. 102. Social protection was at the heart of the ILO’s mission, was set out in the Preamble to the ILO Constitution, and was required under the international minimum standards set out in the Convention. In recent years, Greece had reduced and withdrawn its social security provision. Under the conditions imposed by the Economic Adjustment Programme of the Troika and the MTFS since 2010, the health service had suffered crippling cuts, benefits and pensions had been slashed, and many benefits had fallen below the poverty threshold. The statement by the Government representative seemed to indicate that the Troika’s requirements were given higher priority than the obligation to meet the social security needs of citizens. Further cuts under the MTFS were having the cumulative effect of increasing unemployment and a deepening recession. The number of people who had access to social security was falling as changes either removed protections wholesale, or made the conditions so stringent that few remained eligible to qualify for assistance. Citing the statistics concerning Greek small and medium-sized enterprises, as well as reports concerning the number of entrepreneurs and self-employed workers who claimed to have no hope of recovery, she indicated that a majority of small businesses expected that they would not be able to meet social security and tax obligations, and expected to dismiss staff and close down. Contrary to what some had indicated in the Conference Committee, the matter extended far beyond economic policy and was both properly and essentially before the Committee, because the requirements of the Convention were not being met. The social protection envisaged under Convention No. 102 was being transformed into a financial transaction of limited benefit to a narrowing range of individuals. There was an urgent necessity for provision for old age, protection of the young, protection against sickness and prevention of hardship. The Government was in breach of its obligations under Convention No. 102 and further urgent action was required.

An observer representing Public Services International indicated that so-called “rescue” packages were presented as an extreme remedy to save the Government from bankruptcy without taking into account critical issues of social cohesion and protection. Pensions were severely affected by those measures. Both the Committee of Experts and the European Committee of Social Rights had pointed to the Government’s repeated and continuous violations of core principles and binding obligations enshrined in the European Social Charter, the European Code of Social Security and Convention No. 102. As a result, the responsibility of the State, namely universal access to health-care services, was no longer met, social insertion or re-insertion was no longer provided and the principles of equality of treatment and solidarity were not being complied with. The Government was also in full violation of the right to social security enshrined in Article 22 of the Universal Declaration of Human Rights. Any changes to a social security system should maintain in place the pre-existing level and ensure growth towards a sufficiently extensive system of compulsory social security. Any such change should not exclude entire categories of workers from the social protection provided by this system, especially if those categories had been covered previously. Yet, the public health system had become increasingly inaccessible, in particular for poor citizens and marginalized groups, due to increased fees, co-payment and the closure of hospitals and health-care centres. An increasing number of people were losing public health insurance coverage, mainly due to unemployment. The Troika had pressured the Government since February 2012 to cut 150,000 public sector jobs by 2015. Cuts in wages and pensions were pushing young medical staff out of Greece, which was likely to have an impact on the Greek health-care system for decades to come. In conclusion, in view of the upcoming measures and cuts stipulated in the MTFS 2015–18, measures should be adopted to: (a) effectively prevent and reverse the collapse of the social security system in Greece; (b) maintain the social functioning of the State to at least the level to ensure the population was “in health and decency”, in line with Article 67(c) of the Convention; and (c) establish a basic social income security scheme, in line with the Convention and Recommendation No. 202.

The Government representative expressed appreciation of the comments made and said that the Government would take serious note of all the remarks. There was no question of lack of conformity from a legal point of view, that would fall within the scope of competence of the Committee of Experts with regard to Convention No. 102 or the non-binding guidelines set out in Recommendation No. 202. Concerning the points that had been raised, times were extremely difficult and the Government had been repeatedly called upon to ensure the necessary balance between meeting the commitments assumed within the framework of loan agreements and taking measures that would drastically restructure the institutional framework of the national social security system, while at the same time ensuring social protection standards. The effectiveness and scope of the Government’s efforts had been limited due to the impact of the crisis and social budget limitations. Well-designed adequate income support schemes could be powerful tools to reduce poverty and increase labour market participation and, therefore contributed to achieving the European objective of reducing the number of people in poverty and social exclusion by at least 20 per cent by 2020. The Government, within the limits set by the implementation of the economic adjustment programme, was taking serious measures to relieve vulnerable population groups so that they were exempted from, or burdened as little as possible, by the current austerity measures. In addition, he placed emphasis on the following measures: (1) the granting of the EKAS to pensioners provided that they received a low pension and they fulfilled specific income criteria. The same applied to persons suffering 80 per cent invalidity regardless of their age and orphan children who were eligible to the pension of their deceased parents; (2) the granting of old-age pension of €360 to uninsured persons (at the age of 67) who fulfilled certain criteria. That was a purely non-contributory benefit, granted to persons who did not receive any other pension, and was financed from the State budget. Beneficiaries were granted free medical coverage, and that was not related to the minimum pensions provided for in section 3(3), of Act No. 3863/2010; (3) the payment of family allowance; (4) the granting to families residing in mountainous or disadvantaged areas, including single-parent families, of an annual payment of up to €600 per family, depending on their annual income; (5) the granting to families with children in compulsory education, with an annual income of €3,000, including single-parent families, of an annual payment of €300 for each child; (6) favourable adjustments for the payment of the special property tax (reduction or exemption) for vulnerable groups, including people living in poverty or threatened by poverty, families with many children, disabled persons, the long-term unemployed and unemployed persons receiving regular subsidies; (7) reductions in income tax for persons with low incomes and a decrease of €200 of the amount of tax for specific categories of persons with disabilities or war victims; and (8) tax exemptions in specific cases for wages, pensions and benefits, such as pensions of persons with disabilities and war victims, salaries and pensions of totally blind persons, non-institutional allowances and the EKAS solidarity benefits, etc. Finally, concerning IKA, the main social security fund, he said that out of 1.2 million IKA pensioners, some 200,000 received pensions under €400, but the majority of the low pensions concerned persons receiving two pensions, or who were co-beneficiaries of the same survivors’ pension. That was in line with the European Code and Convention No. 102, as well as national law. The Government had reviewed, particularly since 2010, specific social assistance schemes to ensure that the established minimum amounts remained in all cases above the physical subsistence level for different age groups of the population.

The Worker members thanked the Government for its explanations. They recalled that governments had a duty to maintain their social security systems, including by adjusting it in the event of economic and financial crisis, provided that the measures taken for that purpose were proportionate and conformed to international standards. As had already been emphasized, those standards were not only the cornerstone of social justice, but also encouraged economic recovery. Unfortunately, the explanations provided had not refuted the conclusions of the Committee of Experts and other authorities regarding the Government’s disregard for its international commitments, particularly with respect to Convention No. 102. In her statement, which was rather ambiguous, the Employer member of Greece had stated that the Council of Europe had exonerated Greece from any shortcomings, which was not exactly true. The European Committee of Social Rights had made a similar statement to that of the Committee of Experts which, in turn, the Conference Committee should endorse. It should also support the call by the Committee of Experts for a statistical tool to measure the impact of policies in relation to the aims of the Convention. For the rest, effect should be given to the Oslo Declaration and the missions it had assigned to the Office. In particular, the Conference Committee should request the Government to make use of technical assistance from the Office to ensure the implementation of a social policy, taking into account the Convention and the observations of the Committee of Experts. It was also the responsibility of the Office to enter into contact with the IMF, the European Commission and the European Central Bank, as called for by the Oslo Declaration, on the issues of social policy and, more generally, employment policies. It was hoped that these initiatives would encourage the discussion of alternative measures, this time in line with Convention No. 102 and defined, as advocated in Recommendation No. 202, with “tripartite participation with representative organizations of employers and workers, as well as consultation with other relevant and representative organizations of persons concerned”. Due to the urgency and significance of the case, it should be placed in a special paragraph of the Committee’s report.

The Employer members expressed appreciation of the comments, which they had considered carefully, but noted, firstly, that aside from one additional intervention by a Government representative of the Russian Federation, the Government members had remained silent. Secondly, while the Declaration of Philadelphia should always be borne in mind, research had shown that this was the first case which had been based on its principles, and not on a Convention. The present case should be supervised under the provisions of Convention No. 102, which had still not been discussed and, because the case had been double footnoted, it had not been subject to negotiation between the social partners.

Conclusions

The Committee noted the statement by the Government representative and the discussion that followed.

The Committee noted that the Government representative stressed that times were indeed extremely difficult and the Government had repeatedly been called upon to maintain the necessary balance between providing for social protection standards under Convention No. 102 and meeting the commitments assumed within the framework of the Memorandum of Understanding agreed with the “Troika” (i.e. the European Commission, European Central Bank and the International Monetary Fund) and drastically restructuring the institutional framework of the Greek social security system. The viability of the system was ensured through actuarial studies elaborated by the National Actuarial Authority every three years for the entire social security system based on the ILO model, the development and application of the necessary IT systems, improved collection of contributions through a new unified Social Security Contributions Collection Centre (KEAO), and establishment of an Insurance Fund for Generations Solidarity (AKAGE). The Committee noted the Government’s statement that the effectiveness and scope of those efforts were limited due to the impact of the crisis and social budget limitations incurred by the implementation of the economic adjustment programme. Nevertheless, pensions granted to the entire working population were above the rates provided for in Articles 65–67 of the Convention, while specific social assistance schemes were reviewed in order to ensure that the established minimum amounts remained in all cases above the physical subsistence level for different age groups of the population. Special effort had been made for the design and application of anti-poverty policies for the most vulnerable, which included payment of a “social dividend”, the establishment of the benefit for the long-term unemployed, setting of the minimum guaranteed income in collaboration with the World Bank, and the inclusion of precise targets for poverty reduction until 2020 into the National Reform Programme 2011–14.

With respect to the impact of the economic crisis on the social security system in Greece, the Committee recalled that the principle of the general responsibility of the State for the sustainable financing and management of its social security system expressed in Articles 71 and 72 of the Convention required the Government to establish a sound financial and institutional architecture of the social security system and “take all measures required for this purpose”, including in particular the following: maintain the system in financial equilibrium, ensure proper collection of contributions and taxes taking into account the economic situation in the country and of the classes of persons protected, carry out the necessary actuarial and financial studies to assess impact of any change in benefits, taxes or contributions, ensure the due provision of the benefits guaranteed by the Convention, and prevent hardship to persons of small means. The Committee further recalled that the Oslo Declaration of the Ninth European Regional Meeting called upon the ILO to promote adequate and sustainable social protection systems as well as “synergies and policy coherence with the international and regional organizations and institutions … on macroeconomic, labour market, employment, and social protection issues”. Acknowledging the unprecedented financial and management challenges of steering the Greek social security system through the crisis, the Committee requested the Office to give guidance to the Government on reforming its social security system in accord with the guidance in the Oslo Declaration.

The Committee observed that the continuous contraction of the social security system in terms of coverage and benefits had affected all branches of social security and in some instances resulted in reducing the overall level of protection below the levels laid down in Articles 65–67 of the Convention. In this context, the Committee invited the Government to continue to keep the functioning of the social security system under review and to adjust it, as necessary, making full use of ILO technical assistance to support the quantitative analysis of those options. The Committee recalled in that respect that the Oslo Declaration pointed out that “due to its tripartite structure and its mandate, the ILO is ideally placed to assist constituents to address social and economic crises and to help design sound and equitable reform policies”. In view of the gravity of the social crisis in Greece, the Committee urged the Government to give effect to the above recommendations and to provide full information to the Committee of Experts to ensure the appropriate follow-up to that case.

Direct Request (CEACR) - adopted 2019, published 109th ILC session (2021)

In order to provide a comprehensive view of the issues relating to the application of ratified Conventions on social security, the Committee considers it appropriate to examine Conventions Nos 19 (equality of treatment) and 102 (minimum standards) together.

The Committee notes the observations of the Greek General Confederation of Labour (GSEE) received on 1 September 2017.

Articles 71(3) and 72(2) of Convention No. 102. Preserving the viability of the social security system. With respect to its previous comments on preserving the viability of the social security system, the Committee notes the information provided by the Government in its report concerning the adoption of Law No. 4387/2016, on the basis of which the Greek social security system was redesigned as a unified system based on the general principles of ensuring decent living and social protection in terms of equality, social justice, redistribution and intergenerational solidarity. The Government indicates that the said Law establishes uniform rules for all, old and new insured persons (before and after 1 January 1993) including employees in the private and public sectors and self-employed, and strengthens social justice for precarious social groups by means of establishing a non-contributory national pension and ensuring high benefit replacement rates. The Committee further takes note of the Government’s indication that a basic innovation of the new social security system is the establishment of the Single Unified Social Security Fund (EFKA), which consolidated the main social insurance institutions and started operating from 1 January 2017. The Committee notes, as indicated by the Government, that, in accordance with Articles 7 and 8 of Law No. 4387/2016 since 13 May 2016, the main old-age, invalidity and survivors’ pensions consist of a national part and a contributory part. The Government further specifies that the national part of the pension is not funded by insurance contributions but directly from the state budget. Its full amount is set at €384 per month and it is paid in full if the person concerned has at least 20 years of contributions and 40 years of residence in Greece. The amount of the national pension is reduced by 2 per cent for each year needed to complete the 20-year contribution condition, provided however that at least 15 years of contributions have been completed. If the insured has not completed 40 years of residence in Greece, the final amount of the national pension is decreased proportionally. The contributory part of the pension is calculated on the basis of the average pensionable earnings over the entire working life before retirement. The Committee notes the GSEE’s observations indicating that the reform of the social security system pursuant to Law No. 4387/2016 has not affected the level of the minimum protection and that the impact of continuing austerity measures on social security rights remain topical. The GSEE refers to the Decisions and Recommendations of the Greek National Commission for Human Rights (GNCHR) which indicate that the 2016 reform is characterized by fiscal and collection oriented measures rather than insurance based and operational effectiveness measures. The GSEE further points out that the GNCHR consider that the 2016 reform focuses on spending cuts and revenue increases without a theoretically or empirically grounded vision for a new and efficient social protection system. In addition, the GNCHR indicates that in the face of the risks posed by negative demographic changes and the severity of the economic crisis, the 2016 reform does not effectively address the historical structural pathogeny and inefficiency of the Greek social protection system including the dependence of the social system on the state budget, the mismanagement, financial in particular of social security system funds and resources. Recalling that in accordance with Articles 71(3) and 72(2) of the Convention, the Government shall accept general responsibility for the due provision of the benefits provided in compliance with the Convention and the proper administration of social security institutions and services, the Committee requests the Government to indicate the measures taken or envisaged to ensure the sustainability of the social security system established by Law No. 4387/2016 and its ability to pay benefits.

Social security and reduction of poverty. With respect to its previous comments on the measures necessary to reduce poverty, the Committee notes the Government’s indication that in accordance with the Law No. 4335/2015, the “Social Solidarity Income” scheme which provides income support, access to social services and goods and actions for (re)integration into the labour market is being implemented throughout the country since 2017. The Committee also takes note of the data provided by the Government on the poverty level among various categories of population and household. The Committee also notes the GSEE’s observations indicating that according to the 2016 report of the UN Independent Expert on the effects of foreign debt, in 2014, a substantial number of retirees had pensions well below the poverty threshold, and even the subsistence threshold, all in the absence of a minimum safety net to address the shortcomings of social security. It further indicates that over 3.8 million people in Greece (36 per cent of the population) are at risk of poverty or social exclusion and over 1 million people can be considered as extremely poor, meaning that they have less than 40 per cent of the median average income at their disposal. The Committee further notes the GSEE’s reference to the 2015 concluding observations of the UN Committee on Economic, Social and Cultural Rights on Greece indicating the insufficient assistance provided to persons whose benefits have been reduced or discontinued and the cuts and stringent terms and conditions imposed on non-contributory old-age benefits, which have a negative impact on the living conditions of older persons and their families. Recalling that the level of social security benefits shall be not less than the requirements set out in Part XI of the Convention, and in particular, shall be sufficient to maintain the family of the beneficiary in health and decency (Article 67), the Committee hopes that the Government will take the necessary measures to ensure the level of social security benefits guaranteed by the Convention and requests the Government to keep it informed in this respect.

Part II (Medical care). The Committee notes the information provided by the Government in reply to its previous request concerning the number of persons insured under Part II of the Convention.

Part III (Sickness benefit). Article 16. Rate of benefit for the first 15 days of incapacity for work. The Committee notes from the 35th (2017) Government’s report on the application of the European Code of Social Security (Code) which contains the same provision, that the amount of sickness benefit is equal to 50 per cent of the presumed wage of the insurance class to which the insured person belongs, which is determined based on the average salary of the last 30 working days of the calendar year prior to notification of the incapacity for work. The Committee further notes that the amount of sickness benefit is increased by 10 per cent for each family member protected and cannot be higher than the presumed wage of the eighth insurance class, or 70 per cent of the wage of the insurance class based on which the allowance is calculated. In addition, every year, for the first 15 days of absence from work due to illness, however, the benefit is only equal to 50 per cent of the daily sickness allowance, increased by 10 per cent for each protected family member. In any case, it cannot exceed the presumed wage of the third insurance class, or 35 per cent of the wage of the insurance class under which the allowance is calculated. The Committee observes that the reduced amount of the sickness benefit payable for the first 15 days is unlikely to attain the level prescribed by the Convention in its Article 16 in conjunction with Article 65 and the Schedule appended to it, which is 45 per cent of the wage of a standard beneficiary defined as a person with a dependent spouse and two children. The Committee therefore requests the Government to calculate the replacement rate of the sickness benefit provided to the standard beneficiary in the first 15 days of absence from work as indicated in the report form for the Convention.

Articles 17 and 18. Duration of benefit for public sector employees. The Committee notes from the 35th (2017) Government’s report on the application of the Code which contains the same provisions that a public sector employee who has completed a service period of at least six months is entitled to paid sick leave for as many months as the number of his or her years of service. The Committee further notes that from the total possible duration of sick leave, the days of sick leave that the employee has received during the previous five years are deducted. The Committee observes that, in order to acquire the right to receive sickness benefit in the form of paid sick leave for at least 26 weeks (six months) guaranteed by the Convention, a public sector employee has to complete six years of service without taking any sick leave during the last five of them. The Committee recalls that Articles 17 and 18 of the Convention guarantee a minimum duration of sickness benefit of 26 weeks and allows a qualifying period only insofar as it is deemed necessary to preclude abuse. The Committee considers that a six-month qualifying period can usually be considered sufficient to this end. The Committee thus requests the Government to indicate whether public sector employees are entitled to any benefit during periods of sick leave exceeding the period laid down in Article 54 of the Code of Public Civil Administrative Employees (Law No. 3528/2007).

Part VI (Employment injury benefit). Article 36(2) and 38. Benefits for incapacity of less than 50 per cent. The Committee recalls its previous comments in which it noted that, in order to receive an employment injury invalidity pension, insured persons employed in the private sector must have a disability corresponding to at least 50 per cent of incapacity for work. The Committee observed that this limitation was not compatible with Articles 36(2) and 38 of the Convention, which require the payment of a partial pension in case of employment injury also to victims of employment injury with incapacity of less than 50 per cent throughout the contingency. The Committee therefore requests the Government to take appropriate measures, without further delay, in order to bring the national legislation in this respect in compliance with Articles 36(2) and 38 of the Convention.

Part XI (Standards to be complied with by periodical payments). Article 65. Replacement rate of old-age, invalidity and survivors’ benefits. The Committee notes from the 35th (2017) report on the application of the Code, which contains the same provision, that due to changes in the economy, the Government decided to use a new reference wage, calculated in accordance with Article 65(6)(b), which is the wage of a skilled male employee from the industry or economic activity with the highest number of male employees. The Committee further notes the Government’s explanation that, as the economic activities with the highest number of male employees (wholesale, accommodation) do not have any manual workers, it was necessary to move to the third economic activity with the highest number of employees, which is manufacturing (D), where the group of skilled male employees constitutes around 60 per cent of all employees. In this economic activity, the Unified Social Security Fund identifies the wages of skilled male manual workers (ISCO groups 7 and 8) and calculates the average wage for this group. The Committee takes note of this information and requests the Government to provide calculations on the replacement rate of old-age, invalidity and survivors’ benefits based on the new reference wage determined in accordance with Article 65(6)(b) of the Convention.

Article 65(10). Adjustment of benefits. Noting the adoption of Law No. 4387/2016, the Committee requests the Government to provide explanations on the mechanisms established for the regular adjustment of benefits in accordance with Article 14(4) of Law No. 4387/2016 and to set out how this adjustment provision has been implemented in practice since 2016 notably by providing the statistical data requested in the report form for the Convention for the period 2016–18.

Application of Convention No. 19 in practice. In its previous comments, the Committee requested the Government to provide information on the manner in which industrial accidents are dealt with when they involve foreigners without the necessary documentation on their legal residence in Greece. The Committee also requested the Government to provide information on the manner in which compensation to persons injured in industrial accidents or their dependants is provided abroad. The Committee notes the Government’s indication in its report that based on the Law No. 3850/2010 ratifying the Code of Laws related to Occupational Safety and Health, the Law No. 3996/2011 reforming the labour inspectorate, regulating social security issues and other provisions, and the Presidential Decree No. 113/2014, all occupational accidents are handled in a single manner, irrespective of whether the workers are foreign or Greek nationals or whether their working relationship is legal or not. The Committee further notes the statistical data on the number of occupational accidents for 2015 showing that workers originating from non-European Union countries were involved in 6.4 per cent of occupational accidents according to Regional Units of the Labour Inspectorate. The Committee takes note of this information and reiterates its request on the manner in which compensation to persons injured in industrial accidents or their dependants is provided abroad in case they reside in the territory of a Member, party to the Convention.

Observation (CEACR) - adopted 2014, published 104th ILC session (2015)

Follow-up to the conclusions of the Committee on the Application of Standards (International Labour Conference, 103rd Session, May–June 2014)

The Committee takes note of the information provided by the Government in its report and of the discussion concerning the application of the Convention which took place during the Conference Committee on the Application of Standards (CAS) of the International Labour Conference, at its 103rd Session, in May–June 2014.

In its previous observation, the Committee expressed concern that by maintaining the course of fiscal consolidation foreseen by the Memorandum of Understanding concluded with the “Troika” (that is the European Commission, European Central Bank and International Monetary Fund (IMF)) in conditions of mass-scale unemployment, non-payment of taxes and social security contributions and the huge deficit of the country’s main social security fund, IKA, undermined the financial viability of the national social security system and its capacity to maintain the population “in health and decency” (Article 67(c) of the Convention) above the poverty threshold. The Committee therefore urged the Government to closely assess the overall impact of the economic adjustment policies on the sustainability of the social security system and on the rise of poverty, particularly child poverty, and made a number of concrete recommendations to the Government in this respect. From its side, the CAS recalled that the principle of the general responsibility of the State for the sustainable financing and management of its social security system expressed in Articles 71 and 72 of the Convention required the Government to establish a sound financial and institutional architecture of the social security system and “take all measures required for this purpose”, including in particular the following: maintain the system in financial equilibrium; ensure proper collection of contributions and taxes, taking into account the economic situation in the country and of the classes of persons protected; carry out the necessary actuarial and financial studies to assess the impact of any change in benefits, taxes or contributions; ensure the due provision of the benefits guaranteed by the Convention; and prevent hardship to persons of small means. The Committee examines below the situation in Greece in the light of these recommendations and principles established by the Convention.

Preserving the viability of the social security system. The CAS noted the Government’s statement that times were extremely difficult and the Government had repeatedly been called upon to maintain the necessary balance between providing for social protection standards under Convention No. 102 and meeting the commitments assumed within the framework of the Memorandum of Understanding agreed with the “Troika” and drastically restructuring the institutional framework of the Greek social security system. In its report on the Convention, the Government states that the main economic policy that is still applied in the field of the adjustment programme of the Greek economy is based on both front-loaded fiscal adjustments to eliminate the primary fiscal deficit and the internal devaluation, in order to recover the loss of competitiveness of the economy. These efforts to correct macroeconomic imbalances brought a significant social impact, resulting in a deep recession and significant increases in unemployment and poverty. The impact of fiscal tightening was worse than expected, a fact recognized by the IMF itself, which acknowledged using “incorrect multipliers” in the projections of the impact of the measures implemented.

The Committee notes that the Government uses unambiguous language in acknowledging the fact that the main economic policy it pursued, on the advice of the IMF, has brought a significant social impact in terms of creating significant increases in unemployment and poverty. The Committee, together with other supervisory bodies of the European Code of Social Security (ECSS), and with the United Nations and European human rights bodies, has identified the pressing need for assessing the social impact of the economic adjustment programmes in Europe. The Committee hopes that the Government will take appropriate measures to correct the “multipliers” of its economic policy so as to significantly reduce unemployment and poverty.

The Committee is pleased to note in this respect that, in the current economic environment, the Government considers it absolutely necessary for the social security system to remain sustainable and for the State to fulfil its obligations towards its citizens and its international obligations. The report informs that the Greek State, whose main objective is the viability of the system, has decided, in accordance with the terms of the Memorandum, to elaborate and apply the necessary political measures aimed at the rationalization and sustainability of the system, of which the report specifically mentions the measures aimed at reducing high pensions and at averting abuses of social benefits through the use of information technology (IT) systems. Progressive reductions are imposed on pensions over €1,000 in order for the burdens to be distributed proportionately to the income of pensioners, and the amounts resulting from these reductions to constitute revenues of the social security bodies. IT systems (Ergani, Ariadne, Ilios and Atlas) preserve the viability and the long-term sustainability of the insurance system by establishing the National Insurance Register and cross-checking electronic data, reducing undeclared and uninsured labour, monitoring payments and averting abuses of benefits. The Social Security Contributions’ Collection Centre (KEAO) established a unified mechanism that deals with the collection of debts and arrears in contributions and marks the first step towards a wider reform aiming at the full integration of social security bodies in the tax administration. The purpose of Insurance Capital for the Generations’ Solidarity (AKAGE) is the creation of reserves to finance pension branches of the social security institutions that will remain “locked” until 2019. Its resources will come from the future privatization of public enterprises and organizations (10 per cent) and from the annual revenues of value added tax (VAT) (4 per cent).

The Committee wishes to acknowledge the significant efforts made by the Government to foster the organization of a viable social security system through, inter alia, computerization, elimination of fraud and undeclared work, strict actuarial oversight and efficient administration, and even through cutting higher pensions to sustain lower pensions in the name of solidarity. However, the Committee still doubts that such measures alone would be sufficient to preserve the viability of the social security system in the current economic situation of the country. It notes that, although the macroeconomic indicators show that the Greek economy might be stabilized, the policy of internal devaluation pursued by the Government resulted not only in the fall of real hourly wages in Greece by 25 per cent in four years, as revealed in OECD Employment Outlook 2014, but also in the devaluation of the social security obligations of workers and enterprises sitting on those wages. With regard to workers, some 1.1 million of them are suffering wage arrears ranging from three to 12 months and have become “invisible” to the social security system in terms of contributions and benefits, at risk of losing access to health care. The report of the Labour Institute of the General Confederation of Greek Workers (INE-GSEE), released in September 2014, calculated that incomes of salaried employees and self-employed professionals, which constitute the contributory base of social security, were reduced in 2010–13, in current prices by €41 billion. With regard to enterprises, the debts and arrears in payment of social security contributions and taxes by small enterprises with up to 49 employees, which make up 99.6 per cent of Greek enterprises, continue to grow, with over one third of them declaring their inability to meet social security and tax obligations in 2014. Enterprises’ social security debts and arrears are identified by many economists as the key problem obstructing economic recovery. More generally, the Athens Chamber of Commerce and Industry reported in September 2014 that more than 50 per cent of citizens are unable to meet their obligations to the tax agency and social insurance funds. The abolition of many taxes would additionally deprive the social security system of €1.7 billion. Internal devaluation of social security is amplified many times by surging unemployment and contraction of the number of insured persons. Although only one in ten unemployed workers receives the sustainability of the system is undermined, given that the number of unemployed persons in May 2014, as reported by ELSTAT, who had stopped contributing to the social security system amounted to 1,309,213 unemployment benefits. The Government’s report confirms the contraction of the number of insured persons contributing to the system, as well as of the persons receiving various benefits from it. The serious concern over the possible collapse of the social security system in Greece expressed in the previous observation remains fully justified and the recommendations made in it remain valid. With respect to the key requirement of the Convention (Article 71(3)) that the viability of the social security system should be assessed periodically on the basis of the necessary actuarial studies and calculations concerning financial equilibrium, the Committee notes that the second actuarial study of the system by the National Actuarial Authority was due in 2014 and, by the end of October 2014, reports on the viability of social insurance funds in Greece were expected to be concluded. The Committee requests the Government to summarize the findings of this study in its next report on the Convention, together with the plans for wider reforms of the system mentioned in the report, be it the full integration of social security bodies into the tax administration, the unification of all the different pensions funds into one, or the extension of the guaranteed minimum income scheme to the whole country to become the backbone of the new social protection system in Greece. The Committee understands that the future design of the Greek social security system would very much depend on the conclusions drawn from the above actuarial study “in accordance with the terms of the Memorandum”, according to the proviso in the Government’s reports. The Committee hopes that, in reforming its social security system, the Government will give effect to the basic principles of the organization and financing of social security established by the Convention and the European Code of Social Security (ECSS), which international experience has consistently shown to provide the best guarantees for constructing viable systems. The Committee wishes to remind the Government in this respect that, acknowledging the unprecedented financial and management challenges of steering the Greek social security system through the crisis, the CAS requested the Office to provide guidance to the Government on reforming its social security system in accordance with the Oslo Declaration of the ILO’s 9th European Regional Meeting. The Committee hopes that the Government will not lose sight of the possibility of enlisting the services of the Office if need be. The CAS also observed that the continuous contraction of the social security system in terms of coverage and benefits has affected all branches of social security and, in some instances, resulted in reducing the overall level of protection below the levels laid down in Articles 65–67 of the Convention. Recalling that the CAS invited the Government to continue to review the functioning of the social security system, the Committee hopes that the introduction of the IT systems will enable the Government to submit, in its next detailed report, statistical data on the basic performance indicators of the system for the period 2010–14, showing in particular, under each of the accepted Parts of the Convention, the changes in the number of persons insured by the main social security bodies, the total amounts of contributions collected and benefits paid, and the accumulated debts and deficits of the social security funds.

Furthermore, the Committee notes, from the public statements of the Minister of Labour, Social Security and Welfare in October 2014, that the Ministry has made efforts to simplify Greece’s social security legislation, which represents “a mosaic full of special regimes and loopholes” including 5,436 different laws, some 2,600 court decisions and 26 European or international directives, stretching to almost 39,000 pages. According to the Minister, the simplification process would take 11 months but, that ultimately, Greece would have a social security system “built on healthy and strong foundations”. The Committee welcomes the efforts of the Government to make its social security legislation manageable, which is an essential precondition for exercising its general responsibility for the proper administration of the social security system under Article 72(2) of the Convention. The Committee hopes that the international obligations of Greece under the Convention and the ECSS will figure prominently in this exercise, and would like the Government to indicate the progress made in its next report, highlighting the form and structure to be given to the reshaped body of the Greek social security legislation.

Social security and reduction of poverty. With regard to poverty alleviation, the Committee notes that the Government is well aware of the social consequences associated with the increasing rates of poverty in Greece and is trying to design and apply policies “within the limits permitted by the implementation of the economic adjustment programme”, aimed at the prevention and reversal of poverty, targeted to some extent at restoring social balance and providing relief to the most vulnerable population groups. Among these measures the report mentions: the payment of a social dividend to 564,535 beneficiaries; services providing housing, food and social support for homeless people; exemption from monthly pension cuts for those receiving low main pensions; income tax reductions for low-income and specific categories of persons with disabilities; tax exemptions for certain categories of salaries, pensions and allowances; establishment of a minimum guaranteed income for individuals and families living in conditions of extreme poverty; and other measures, which have been noted by the Committee previously. The Committee also noted in its previous comments that the Ministry of Labour, Social Security and Welfare has set up three national targets incorporated in the National Reform Programme 2011–14, concerning the reduction of the number of adults and children living at risk of poverty and the development of a “social safety net” against social exclusion.

The Committee notes that, before the CAS, the Government recognized that the effectiveness and scope of efforts undertaken so far were limited, due to the impact of the crisis and social budget limitations incurred by the implementation of the economic adjustment programme. The Committee notes, however, that, since the beginning of the financial crisis, the present reports under the Convention and the ECSS are the first ones which do not refer to new cuts and reductions in social benefits. The Committee notes that, while the Government appears not to be in favour of the “Troika’s” plans for a second reform of the pension system, implying a further increase of the pension age and reductions in pensions paid by primary insurance funds, it has adopted a new method of calculating the primary pensions of those who retire from 2015 onwards, as well as the so-called clause of “zero deficit” for the supplementary pension funds, which means that, starting from 2015, both lump-sum payments and supplementary pensions will be adjusted (reduced) depending on the financial situation of each insurance fund. The Committee further notes from the information made public by the Ministry that 393 annual reports of 93 social insurance funds will be reviewed by November 2015 and will give a clear picture of the overall state of the funds. The Committee understands therefore that, in introducing the “zero deficit” clause, the Government did not yet have a clear picture of the reductions this clause would bring in supplementary pensions paid by different insurance funds, many of which are known to have serious financial difficulties. The Committee refers in this regard to the criteria laid down in Article 71(3) of the Convention for the exercising by the State of its general responsibility for the due provision of benefits, and hopes that the Ministry has duly carried out the necessary actuarial studies concerning the available means to achieve the financial equilibrium of the funds, and has fully assessed the social impact of the “zero deficit” clause on poverty among their insured population in accordance with the best EU practices. The Committee notes in this connection information provided during the discussion of the case of Greece by the CAS in 2014, that the “zero deficit” clause scheduled to take effect from 1 July 2014 would affect some 4 million people, with their supplementary pensions being cut by 25 per cent. The Committee would therefore ask the Government to specify the magnitude of the new reductions in the amounts of the primary and supplementary pensions which would result from the measures mentioned above, as well as the outcome of its negotiations with the “Troika” on the second pension reform.

The Committee regrets that the new wave of significant pension cuts is likely to make ineffective a large part of the Government’s reported efforts to reduce poverty. In this context, the Committee observes that the situation of poverty in the country has not improved, notwithstanding the fact that the at-risk-of-poverty threshold has fallen in the last three years by more than €2,000. There is a marked increase of indicators of child poverty and severe material deprivation. The Committee regrets that the report contains no data or indicators on monitoring poverty among different categories of the population and households, which would enable the effectiveness of social transfers and other measures detailed by the Government to be assessed and proved. There is also no indication in the report of the importance of establishing the minimum guaranteed income and other safety net benefits relating to the physical subsistence level determined in terms of the basic needs and the minimum consumer basket. The Committee notes, in this respect, that the new long-term unemployment benefit for persons who have already exhausted their right to regular unemployment benefit, as well as maternity benefit to self-employed women insured by the ETAA, have been established in the amount of €200, which is far below the lowest Eurostat at-risk-of-poverty level of 40 per cent of the median equivalized income (€279 in 2013). The Committee requests the Government to explain which criteria were used to calculate the amounts of these new benefits as well as the benefit under the new guaranteed minimum income scheme which, according to the report on the Convention, aims to become the core of the new social welfare strategy for the entire country. Please provide information and data on the evolution of poverty in the country among different categories of the population and households, and explain the progress made in attaining the national anti-poverty targets, specifying the role assigned in this respect to the social security benefits.

Finally, the Committee notes that, although the report demonstrates a positive attitude to the recommendations made by the Committee, no concrete action is mentioned towards their practical realization either at the national or at the EU level, and that no ex ante or ex post assessment of the social impact of austerity measures was made. The report repeats that the fiscal space reserved for the application of the Convention and the ECSS and for the anti-poverty measures in Greece is strictly defined by the limits permitted by the implementation of the economic adjustment programme and the commitments assumed by the Government under the Memorandum with the “Troika”. The Committee nevertheless urges the Government to provide substantive responses in respect of the following statements made in the report: (1) that the Government has and will put the issue of the prevention of poverty on the agenda of its meetings with the parties of the international support mechanism for Greece; (2) that the National Actuarial Authority will be in position to determine the social impact of the cuts in social security benefits; and (3) that the actions taken to prevent poverty analysed the most rapid scenarios for reversing certain austerity measures and disproportionate cuts in benefits.

Part II (Medical care). According to the report, in 2010–11, in one year the number of insured persons for medical care contracted by over 400,000 persons, but since 2012 the competent health services provider (EOPYY), has not made available any data on the evolution of coverage to be included in the report. Recalling that the report informs that the National Register of Beneficiaries of health care is established and updated in real time, the Committee requests the Government to provide updated statistics on the number of persons insured under Part II of the Convention. The Committee remains concerned by the statements during the discussion of the case of Greece at the CAS in 2014 that the drastic reduction in public health expenditure led to longer waiting times, higher admission fees, co-payment and the closure of hospitals and health centres, and an exclusion of poor citizens and marginalized groups from the health system. People who are unemployed for longer than one year are losing their access to health coverage. The social security system owed the main public health-care provider €421.4 million in contributions which it had collected but had failed to distribute. As a consequence, an increasing number of persons living in Greece are without any or adequate access to health care, the quality of which has degenerated. In light of this information, the Committee would like the Government’s next report to include detailed information on the application of all Articles of Part II of the Convention in law and in practice, accompanied by statistical data showing the financial situation of the national health-care system and its performance in terms of maintaining, restoring or improving the health of the persons protected.

Part XI (Standards to be complied with by periodical payments), Articles 65 and 66. Determination of the reference wage. The reference wage used in the 2014 report on the Convention to calculate the replacement level of cash benefits is determined under Article 65(6)(a) as the wage of the “married turner”, according to the Labour Collective Agreement of 2010, after one year of contributions (€1,091.25) for Part VI of the Convention, after 15 years of employment (€1,331.26) for Parts V, IX and X, and after 30 years of employment (€1,462.21) for Parts III, V and VIII. The note in the report states that these calculations concern those who have been insured for the first time up to 31 December 1992. The Committee does not understand the implications of this note on the calculation of the reference wage for 2010 and beyond. It observes, nevertheless, that the method used for determining the reference wage of the skilled manual male employee does not seem to fully correspond to the methodology described in Article 65 of the Convention and appears to be substantially lower than the reference wage calculated for a person deemed typical of skilled labourers on the basis of Eurostat data for the same year (2010). The Committee would like to point out in particular that, according to Article 65(6)(a), a turner should be selected not in the economy at large but in the division of the “manufacture of machinery other than electrical machinery”, normally in the highest skill echelon and among male workers. Furthermore, the Committee asks the Government to confirm that the Labour Collective Agreement of 2010, to which it refers in 2014, is still valid and that the turners continue to receive wages at the level set in 2010. With these considerations in mind, the Committee requests the Government to review the method currently used for determining the reference wage of the standard beneficiary under Article 65 of the Convention, as well as to establish, for the purpose of comparison, the reference wage of an ordinary adult male labourer under Article 66.

Observation (CEACR) - adopted 2013, published 103rd ILC session (2014)

Recalling the conclusions made in its observation of 2012 and having examined the information provided by the Government in 2013 in its report on the Convention and in the 31st annual report on the application of the European Code of Social Security (thereafter the Code), the Committee finds that the continuing contraction of the economy, employment and public finances caused by the policy of continuous austerity threatens the viability of the national social security system and has resulted in the increased impoverishment of the population, which seriously undermines the application of all accepted Parts of the Convention.

Protecting the social security system against continuous austerity. The Committee observes that after six straight years of recession and four years of austerity policies, the country has been led to an economic and humanitarian catastrophe unprecedented in peacetime: a 25 per cent shrinking of GDP – more than at the time of the Great Depression in the United States; over 27 per cent unemployment – the highest level in any western industrialized country during the last 30 years; 40 per cent reduction of household disposable incomes; a third of the population below the poverty line; and over 1 million people or 17.5 per cent of the population living in households with no income at all. These consequences are substantially related to the economic adjustment programme Greece had to accept from the group of international institutions known as “the Troika” (the European Commission, European Central Bank and IMF) to ensure repayment of its sovereign debt. The above statistics show that the policy of continuous austerity has plunged the country into a spiral of continuous recession, lost GDP and employment, higher public deficits and debt. With regard to future economic prospects, the report on the Convention includes the 2013 survey of small enterprises with up to 49 employees, constituting 99.6 per cent of Greek enterprises, conducted by the Small Enterprises’ Institute of the Hellenic Confederation of Professionals, Craftsmen and Merchants (IME GSEVEE). This survey reveals that 76.5 per cent of entrepreneurs and the self-employed believe that the crisis is deepening and have lost all hope for recovery. In absolute terms, 110,000 enterprises are “in the red”, with 40,000 of them estimated to close down over the next 12 months; total job losses in 2013 will reach 85,000–90,000; 63.3 per cent of enterprises estimate that they will not be able to meet their tax obligations in 2013; 57.2 per cent say the same about their social security obligations, while 22.6 per cent already owe contributions to IKA–Social Security Institute (a 30 per cent increase in only six months). The Committee observes that such economic outcomes of the fiscal consolidation programme undermine the viability of the national social security system and negate the very objectives of social protection pursued by the Convention and the Code. The Committee of Ministers of the Council of Europe, in its Resolution CM/ResCSS(2013)21F on the application of the European Code of Social Security by Greece, regretted that “the evolution of the situation in Greece confirms its previous conclusion that applying exclusively financial solutions to the economic and social crisis could eventually lead to the collapse of the internal demand and the social functioning of the State, condemning the country to years of economic recession and social unrest”. The Committee observes that under the present circumstances, by maintaining the course of austerity, the Government is, to a large extent, forfeiting its general responsibility for the proper governance of its social security system, which extends throughout all the provisions of the Convention and the Code. In view of the new austerity measures in Greece scheduled for 2014, the huge deficit of the country’s main social security fund, IKA, in conditions of mass scale non-payment of taxes and social security contributions, and the fact that many benefits have fallen below the poverty threshold, the Committee considers that the Greek Government and the Troika should be called upon to prevent the collapse of the social security system in Greece and to sustain the social functioning of the State at least at a level to maintain the population “in health and decency” (Article 67(c) of the Convention and the Code). The Committee notes in this respect that in June 2012, the Parliamentary Assembly of the Council of Europe called upon the States parties to “closely assess current austerity programmes from the viewpoint of their short- and long-term impact on democratic decision-making processes and social rights standards, social security systems and social services” (Austerity measures – a danger for democracy and social rights, Resolution 1884(2012) of 26 June 2012, paragraphs 10.3 and 10.6). The Committee further notes that, in October 2013, the Committee of Ministers invited the Greek Government to ask the National Actuarial Authority to assess the overall impact of the austerity policies on the sustainability of the social security system. The Committee would therefore like the Government to respond to these recommendations of the Council of Europe by conducting such an assessment of the current austerity programmes, preparing the necessary policy corrections and applying them without delay with a view to preserving the immediate viability and the longer term sustainability of the national social security system. The Committee hopes that the participation of Greece in the European working group on “Efficiency and effectiveness of social spending and financial arrangements”, to which the Government refers in its report on the Convention, will help the Government to assess the effectiveness of its social spending sufficiently in time to arrest the destructive effects of the present financial arrangements.

Stopping the increasing impoverishment of the population. The Committee highlights that the following considerations concern some major developments affecting benefits in 2013 and should be read in continuation of its previous conclusions concerning the impact of austerity measures on poverty levels in Greece in 2012. Referring to austerity measures implementing the Memorandum of Understanding on the Medium-Term Fiscal Strategy 2013–16 (Memorandum III) between the Government of Greece and the IMF, the European Commission and the European Central Bank, the 31st report on the Code states that, as of 1 January 2013, by Law 4093/2012, the amount of monthly pension or the sum of monthly pensions of €1,000 and above were reduced by between 5 and 20 per cent. Also from 1 January 2013, the Christmas, Easter and holiday bonuses were abolished, meaning an additional 6 per cent reduction in annual income from pensions of IKA–ETAM. The report on the Code also states that 910,048 IKA pensions (out of a total of 1,205,513 computerized pensions), which are lower than €1,000, were decreased by 1 per cent after all the deductions, excluding the Christmas, Easter and holiday bonuses. Besides direct cuts in pensions, further financial savings from the pension system were generated by reducing the number of recipients through imposition of stricter qualifying conditions in terms of higher retirement age and income criteria. Thus, the stricter conditions for the entitlement to old-age pension set by Law 3863/2010 that were supposed to come into force on 1 January 2015 were applied from 1 January 2013, increasing from 65 to 67 years the retirement age for pensions provided by the Social Security Funds under the competence of the Ministry of Labour, Social Security and Welfare, as well as the Bank of Greece. According to Law 4093/2012, from 1 January 2014, in order to be entitled to the Social Solidarity Allowance (EKAS) the recipients of old-age, invalidity and survivors’ pensions should reach the age of 65 (instead of 60), with the exception of surviving children. By Law 3996/2011, EKAS is subject to the new income test, which now covers the entire income, including profits and earnings from room renting, truck renting, personal business, sales as travelling salesmen, etc. The non-contributory pension of €360 (€345 net) financed from the state budget and granted by the Agricultural Insurance Organization (OGA) to uninsured persons of old age who do not receive any other pension, provides, since 1 January 2013, for more stringent age, residence and income conditions, which need to be met cumulatively. Nevertheless, according to the report on the Code, there are still 779,661 pensions (with an average monthly amount of around €483.18) that have not been subject to any monthly decrease since 2011. No reductions were made to the minimum pension for old age and disability (€486.84 for persons insured before 31 December 1992, and €495.74 for those insured after 1 January 1993) and for survivors (€438.16 for persons insured before 1992 and €396.58 for those insured subsequently), as well as to EKAS, which constitutes an amount from €30 to €230 (average is around €175.62).

While noting the Government’s efforts to shield low-income pensioners from new reductions, the Committee observes that existing thresholds and safeguards are largely insufficient to prevent poverty in old age: the report on the Convention indicates that the rates of relative poverty and the material deprivation for people over 65 have worsened more than for the population on average, and that this phenomenon requires monitoring. The Committee hopes the Government understands that the aim of monitoring poverty is to reduce it, which cannot be achieved by new pension cuts. The Committee observes that, direct pension cuts in 2013 resulted in a reduction of pensions ranging from 12 to 27 per cent in total. The impact on the population would be greater if one considered also the effect of the introduction of much stricter legal conditions for entitlement to various pensions. The European Committee of Social Rights stated in this respect that “the cumulative effect of the restrictions … is bound to bring about a significant degradation of the standard of living and the living conditions of many of the pensioners concerned” (Complaint No. 76/2012, Federation of employed pensioners of Greece (IKA–ETAM) v. Greece, Decision on the Merits, 7 December 2012, paragraph 78). One might add to this that pension reductions now constitute one of the main remaining sources of budgetary savings that Greece promised to its international creditors in 2013: about half of the €9.37 billion budgetary savings affects pensions. The Committee is saddened to observe that the aggravation of poverty in Greece is not a natural but an artificially created phenomenon perceived as inevitable “collateral damage” to fulfilling the country’s financial obligations before its international lenders. This Committee fully shares the conclusion of the Committee of Ministers of the Council of Europe that a State ceases to fulfil its general responsibilities for the proper management of the social security system and the due provisions of benefits if its social security benefits slide below the poverty line, and would be seen as socially irresponsible if its social security benefits fall below the subsistence level. In the light of these conclusions of the Committee of Ministers, the Council of Europe, as a human rights institution, has the legal and moral grounds to hold the Greek Government and its international lenders responsible for the “programmed” impoverishment of the population and the human costs it involves. With respect to the position of the Greek Government, the Committee considers that the adoption by the Government of the socially responsible policy would imply, inter alia, the fulfilment of the following requests made by the Committee in its previous observation and restated by the Committee of Ministers in its 2013 Resolution on the application of the European Code of Social Security by Greece: (1) to urgently assess past and future social austerity measures in relation to one of the main objectives of the Convention and the Code, which is the prevention of poverty; (2) to put this question on the agenda of its future meetings with the parties of the international support mechanism for Greece; (3) to enable the National Actuarial Authority, in terms of additional financial and human resources, to analyse the redistributive effects of benefit cuts; (4) to determine the most rapid scenarios for undoing certain austerity measures and returning disproportionately cut benefits to the socially acceptable level; and (5) to make full use of ILO technical assistance to support the quantitative analysis of these options and of the subsequent revision of the 2012 actuarial projections for the national pension system. According to the report on the Code, the General Secretariat for Social Security of the Ministry of Labour, Social Security and Welfare has forwarded these requests of the Council of Europe and the ILO to the Government and expects the political leadership of the country to take relevant decisions.

The Committee, for its part, hopes that these decisions will be socially responsible and will be forthcoming sooner rather than later, if only considering that since the beginning of austerity the country has been shaken by no less than 39 general strikes. With respect to the proposal to assess the impact of austerity measures on poverty, the Committee finds it encouraging that, in its report on the Convention, the Government refers to the analogous conclusion coming out of the Social Protection Committee of the European Union, namely that member States implementing economic adjustment programmes should assess the social impact of measures prior to implementing those programmes. The Government cites point 7 of the policy conclusions of the report of the above Committee addressed to the European Commission and the European Council for the preparation of the Annual Development Report, which states “Member States implementing economic adjustment programmes (EAPs) have shown an extraordinary commitment to reforms which are painful for their population. Their experience offers a unique source of lessons to be learned. Many of the implemented measures strengthened their social protection systems, while others failed to halt the rise of poverty and in particular child poverty. Social impact assessment must therefore precede the economic adjustment programmes in order to choose the most appropriate path of reforms and adjust the resulting distribution impact across income and age groups.” As a first step towards binding measures decided upon at European level to that effect, the Government refers to the pilot ex ante examination of sectoral economic reforms in the Member States based on the proposal submitted by the European Commission for “ex ante coordination of plans for major economic policy reforms” (Communication, 2013) following its authorization by the EU Summit. The Committee is pleased that the repeated calls of the Council of Europe and the ILO to conduct structural adjustment programmes in a socially responsible manner avoiding large-scale pauperization of significant segments of the affected populations have been heard and acted upon by the European Commission. Considering that the European Commission forms part of the Troika, the Committee trusts that the Greek Government will not fail to seize the opportunity of using the above ex ante examination of its economic reforms to conduct the post factum examination of the impact of those reforms and the policies of continuous austerity on the rise of poverty and in particular child poverty. The Committee wishes to underscore that such an assessment will no doubt offer “a unique source of lessons to be learned” not only by the European Commission and other members of the Troika, but by all European countries and the international community at large in order to prevent, in future, the creation of widespread poverty.

Establishing a national social protection floor. With respect to the role of the social security system in poverty reduction, the Committee recalls that Greece continues to be the only Eurozone country with no basic social assistance scheme that provides a safety net at the subsistence level determined in terms of the basic needs and the minimum consumer basket. The report on the Convention explains in this respect that the question of indicators based on categories of goods and services is being discussed at the European Union level, where there is no agreement among Members States on the methodology for the elaboration of such indicators that is subject to the Peer Review on “Using reference budgets for drawing up the requirements of a minimum income scheme and assessing adequacy”. However, in the framework of the European Strategy “Europe 2020”, Greece has committed itself to building a social safety net guaranteeing access to basic services and fixed specific quantitative targets for the reduction of poverty and social exclusion in the National Reform Programme: by 2020 the number of people at-risk-of-poverty or material deprivation or living in households with no working member should have been reduced by 450,000 (from 28 per cent in 2008 to 24 per cent in 2020); and the number of children at-risk-of-poverty by 100,000 (from 23 per cent in 2008 to 18 per cent in 2020). In monitoring trends in poverty, the Government is focusing on persons who experience extreme poverty and the unemployed. For the first group, Law 4093/2012 established a pilot programme to set up a minimum guaranteed income scheme, which is being prepared in cooperation with the World Bank and, in the first phase, will be applied in two Greek regions with different socio-economic characteristics. With regard to the unemployed, the Government started discussions with the Troika and intends to revise the benefit for the long-term unemployed. The Committee welcomes these initiatives which commit the World Bank and the Troika to taking into account the urgent needs of the people concerned. The Committee considers that in the present situation the establishment of the basic social assistance scheme, in line with the Convention, becomes an urgent necessity and would like the Government to refer in this respect to the ILO Social Protection Floors Recommendation, 2012 (No. 202). It hopes that in establishing such a scheme and determining the guaranteed minimum income, as well as the amount of the benefit for the long-term unemployed, the Government will rely not only on the poverty indicators, but will ensure that the established minimum amounts remain in all cases above the physical subsistence level for different age groups of the population.

[The Government is asked to supply full particulars to the Conference at its 103rd Session and to reply in detail to the present comments in 2014.]

Observation (CEACR) - adopted 2012, published 102nd ILC session (2013)

The Committee notes the Government report for the period ending 31 May 2011 received in February 2012 and its reply to the Committee’s previous comments received in September 2012, as well as the 30th annual report on the application by Greece of the European Code of Social Security for the period from 1 July 2011 to 30 June 2012.

Actuarial evaluation of the 2010 pension reform

In its 29th report on the European Code of Social Security, the Government explained the profound reform of the pension system, carried out by Act No. 3863/2010 on the “New social security system and relevant provisions”, by the need to safeguard its long-term viability and referred to an actuarial evaluation to be carried out in 2011 to assess the sustainability of reforms. In the 30th report on the Code, the Government indicates that such an evaluation was successfully carried out by the National Actuarial Authority in 2011 and supplied a copy of it (Ageing Projections Exercise 2012. Greek Pension System Fiche. European Commission, Economic Policy Committee, Ageing Working Group). The 2012 Projection Exercise evaluated changes to the main and auxiliary pension provisions in Greece brought about by the reform of 2010; new social security legislation implemented after September 2011 has not been incorporated. The main pension provision includes ten mandatory social insurance schemes, which cover salaried employees and self-employed persons grouped in certain occupations; the auxiliary pension provision includes supplementary social insurance schemes, each of which corresponds to a main social security scheme and runs in parallel with it. Together with the social solidarity grant provision (EKAS) to residents with no or low income, the main and auxiliary pension provisions account for almost 99 per cent of the total public pension expenditure in Greece. The 2012 projections were based on the present version of the ILO Pension Model developed to support actuarial reviews of statutory social security pension schemes and provide the quantitative basis for policy decisions. The projections concerning the main pension provision were peer reviewed by ILO experts.

The Committee has examined the main findings and conclusions of the 2012 projections and wishes to compliment the National Actuarial Authority for having accomplished such a complex undertaking of aggregating disparate data from multiple pension schemes into a common scenario. The reform of 2010 introduced a consolidated architecture of the pension system and new universally binding rules on entitlements, contributions, accumulation and indexation of pension rights. This permitted the previously highly fragmented Greek pension system to be financially monitored and allowed for meaningful actuarial projections which showed that, over the next 50 years, the application of stricter eligibility criteria and the reduction of the benefit replacement rate due to the decrease of the accrual rates substantially restrain benefit expenditure. Thus, the total public pension expenditure, including the EKAS, for 2060 reaches 14.6 per cent of GDP, which represents an increase of only 1.1 per cent of GDP over the period of 50 years and not the 10 per cent initially feared by the Government. This result however was achieved at the price of significantly curtailing pension rights by increasing pension age from 60 to 65, extending the full contributory period from 35 to 40 years, lowering the accrual rates and calculating pensions on the basis of the whole career earnings, instead of the five best years in the last ten before retirement. The Committee wishes to underline in this respect that, however tough the new pension rules happened to be, they stayed within the minimum standards of protection prescribed by the Convention and applied equally to all insured persons so that all current and future workers shared the burden on a pro rata basis. In particular, the combined replacement rate of the main and auxiliary pensions was maintained well above the 40 per cent level required by the Convention for the whole projected period. The 2012 projections confirmed therefore that the reforms introduced by Act No. 3863/2010 were sufficient to ensure the long-term viability of the pension system while maintaining it in line, conceptually and technically, with the minimum standards guaranteed by the Convention. According to the Government, the assessment of the 2012 projections by the Ageing Working Group of the European Commission in terms of the sustainability of pension reform in November–December 2011 was highly positive, notwithstanding the fact that the contribution of subsequent pension reduction measures adopted since September 2011 has not yet been included in this actuarial evaluation. The Committee wishes to emphasize this conclusion, which permits to distinguish the 2010 reform measures strengthening the long-term viability of the social security system from the subsequent austerity measures, which put into question the ability of the system to withstand the continuing contraction of the economy, employment and public finances.

Subsequent policies of social austerity

With regard to the pension reduction measures subsequent to the 2010 reform, which were taken in November 2011 and three times in 2012, in February, May and November, the Government states in its reply to the comments on the Convention that they were adopted within the application framework of the new Memorandum of Understanding between the Government of Greece and the IMF, the European Commission and the European Central Bank (referred to as troika). The Committee notes that these measures formed part of the austerity package and reform strategy imposed on Greece by its international creditors as a condition to unlock successive tranches of bailout funds necessary to prevent the bankruptcy of the country threatening to provoke a chain reaction throughout the European financial system. Being a member of the Eurozone, Greece did not have the option of devaluation to adjust its relative prices and wages and, to service its debts, it was therefore compelled to devalue the standards of living of its people. New cuts in pensions were introduced since 1 November 2011 by Act No. 4024/2011, including 40 per cent reduction of the part of the monthly main pension exceeding €1,000 for pensioners who have not attained the age of 55; 20 per cent reduction of the pension part exceeding €1,200 for pensioners aged 55; and 15–30 per cent reductions of various auxiliary pensions. From May 2012, main pensions, which after previous reductions still exceeded €1,300, were additionally reduced by 12 per cent with retroactive effect for the period January–April 2012 (section 6(1) of Act No. 4051/2012). A new package of austerity measures under the Memorandum of Understanding on the Medium-Term Fiscal Strategy 2013–16 (Memorandum III) was approved by the Greek Parliament in November 2012. With respect to pensions, the legal retirement age was set to rise from 64 to 67 on 1 January 2013, including for social benefits of the EKAS; all pension payments of over €1,000 were cut by between 5 and 15 per cent; Christmas, Easter and summer bonuses for pensioners were abolished, among other measures.

Impact of austerity measures on poverty levels

In August 2012, in the information supplied on Convention No. 102, the Government stated that, despite the specific measures to reduce pensions, the minimum levels set by Convention No. 102 were not affected. Minimum pensions granted by the Social Insurance Institute (IKA–ETAM) as well as other benefits granted to vulnerable social groups, such as the EKAS, the benefit for para/quadriplegia and the total disability benefit, have not been affected. Medium-income pensioners with pensions up to €1,000 per month have either not been affected by the cuts in main pensions or their income has undergone only a slight reduction not exceeding 5 per cent. The number of pensioners who have not been affected by any reduction amounted to around 1 million persons. The Committee observes however that, after the new round of pension cuts in November 2012, this information has become outdated and would have to be reviewed by the Government in its next report. In particular, the Government should be requested to indicate the exact minimum amounts of the benefits still guaranteed by the national legislation under all accepted Parts of the Convention.

The Committee further observes that pension cuts across the board have put a large percentage of the Greek population into instant poverty with no indication of how and when this population would recover. According to Eurostat data, in one year, from 2010 to 2011, the percentage of population suffering material deprivation (lack of at least three out of nine deprivation items) increased by 4.3 per cent and an additional 2.2 per cent of older persons over 60 fell below the risk of poverty threshold; the overall share of persons with an income below the risk of poverty threshold reached the highest point in the last decade. In total, in 2010, 27.7 per cent of Greek citizens or more than 3 million persons were at risk of poverty or social exclusion. The Committee notes that the information supplied by the Government included no such data and did not respond to the Committee’s previous demand to assess the spread of poverty in the country and to consider social security policies in coordination with its tax, wage and employment policies under the Memorandum of Understanding. The Committee recalls that, in September 2011, the Government informed the High-level ILO Mission that “questions such as the impact of the pension reform on poverty levels as well as the sustainability of the social security system … have not been addressed in the discussions with the troika”. In view of the serious deterioration of the situation in Greece in 2012, the Committee considers it an urgent duty of the Government to assess past and future social austerity measures in relation to one of the main objectives of the Convention, which is the prevention of poverty. In particular, the Committee would like the Government to be asked to put this question on the agenda of its future meetings with the parties to the international support mechanism for Greece.

Need to link social benefits to subsistence level

While stressing the need to closely monitor the dynamics of poverty in the country, the Committee wishes to underscore that in the present situation the existing poverty indicators linked to the median income would no more reflect the real state of deprivation of the population. In fact, in the economy where wages are in freefall, so is the median income; the related poverty threshold may then fall below the level of physical subsistence of an individual. Where benefits are calculated as percentage of substandard wages, social security system resembles an iceberg where only a small part of benefits is paid above the subsistence level, while the bulk of the system operates below this level, where the application of most provisions of the Convention becomes meaningless. The Committee considers that the State would cease to fulfil its social responsibility if its social security benefits did not ensure the subsistence of the persons protected. With these considerations in mind, the Committee is concerned that, according to the report of the high-level ILO mission, there is no concept of a subsistence wage in Greece, and that the minimum pension is set well below the poverty threshold. In February 2012, the minimum wage was reduced by 22 per cent and by 32 per cent for workers below the age of 25 and has slumped to the level of the second half of the 1970s. The Committee considers that in a country where large segments of the population live below the poverty threshold, wages and benefits should be linked to indicators of the physical subsistence of the population determined in terms of the basic needs and the minimum consumer basket. The Committee would like the Government to explain in its next report whether any subsistence level is established for different age groups of the population and, if so, how it is determined and how it is related to the minimum wage and minimum amounts of social security benefits.

Concern for justice and equity in handling the crisis

The above considerations which successively raise concerns about the impact of austerity policies on the viability of the Greek social security system, its observance of the minimum standards prescribed by the Convention, and its capacity to reduce poverty and ensure subsistence, still do not respond to no less important concern for the principles of social solidarity, justice and equity in handling the crisis. The Committee has also invited the Government to explain to what extent it abides by these principles in the context of the implementation of the international support mechanism for Greece. The Committee notes that while the Government has not replied to this question, the Greek National Commission for Human Rights and the Greek Court of Auditors have expressed strong criticism of its austerity policies. On 8 December 2011 the Greek National Commission for Human Rights – an advisory body to the Government in matters of human rights protection – issued the Recommendation with the self-explanatory title “The imperative need to reverse the sharp decline in civil liberties and social rights”, where it condemned the “ongoing drastic reductions in even the lower salaries and pensions” and “the drastic reduction or withdrawal of vital social benefits”. As this Recommendation has not been followed by the Government, the Court of Auditors, which vets Greek laws before they are submitted to parliament, one year later, in November 2012, ruled that recurrent cuts in pensions were contrary to articles 2, 4, 22 and 25 of the Constitution as they conflict with the constitutional obligation to respect and protect human dignity, the principles of equality, proportionality and the protection of labour. While decisions of the Court of Auditors are not obligatory for the Government and the State, such a ruling opens the legal way to anyone who wants to file a complaint and oppose pension cuts in court. Notwithstanding the fact that the Government did not follow the ruling of the Court of Auditors, the Committee requests it to fully reflect the position of the judiciary power of the Greek State in its next report, indicating in particular the number of cases opposing pension cuts in courts and the nature of the decisions taken by the latter.

With respect to the principles of justice and equality in relation to social austerity measures, one should recall that Article 71(1) of the Convention demands that cuts in benefits, likewise their costs, shall be borne collectively taking into account the economic situation of the classes of persons protected: the fortunate classes should bear a proportionately larger share of the burden, while persons of small means should be preserved from hardship. The Committee understands that the situation in Greece is rather the opposite: the troika stresses the need to improve Greece’s competitiveness by reducing non-wage labour costs and allowing wages to adjust downward without regard to collective agreements or the basic subsistence needs, while the Government transforms these recommendations into direct cuts in wages and pensions, which places a disproportionately large share of the country’s efforts on the ordinary people. In contrast, in its previous observation, the Committee considered it incumbent upon the Government to assess, together with the troika, the resources available to those who evade contributing to the country’s efforts, in order to ensure that they are forced to contribute by all possible legal means. Taking into account the widespread feeling of social injustice in the imposition of austerity measures, the Committee requests the Government to indicate what measures were taken to increase contribution to the country’s efforts by the most fortunate contributors – individuals, banks, companies, industries, civil and religious organizations, and other bodies able to contribute to the social welfare system through taxes or earmarked contributions.

Responsibility of the State for the reverse engineering of austerity

The Committee observes that by continuing social security reforms by means of social austerity policy the Greek State has shifted the balance between its social responsibility towards its people and the fiscal responsibility towards its creditors in favour of the latter. The Committee notes with regret that the evolution of the situation in Greece confirms its previous conclusion that applying exclusively financial solutions to the economic and social crisis could eventually lead to the collapse of the internal demand and the social functioning of the State, condemning the country to years of economic recession and social unrest. It is with great concern that the Committee notes in this respect that the Greek economy is predicted to shrink 6.5 per cent in 2012 and a further 4.5 per cent in 2013. To prevent such outcomes, the principle of the general responsibility of the State for the proper governance of its social security system, which extends throughout all the provisions of the Convention, reminds all the constituent powers of the State of their collective obligation to ensure that the policy of fiscal and financial consolidation does not undermine the fulfilment of the social and human objectives of the Convention at least at the level permitting to maintain the protected population “in health and decency” (Article 67(c) of the Convention). With this idea in mind, the Committee requests the Government to ask the National Actuarial Authority to analyse the redistributive effects of benefit cuts and to assess the overall impact of the austerity policies on the sustainability of the social security system. It should also explore and provide information on the most rapid scenarios of undoing certain austerity measures and returning disproportionately cut benefits to the socially acceptable level, which at least prevents the “programmed” impoverishment of the beneficiaries. The Committee is confident that such reverse engineering of austerity may restore some hope in the future of the Greek social security system and provide valid grounds for resuming national social dialogue for this purpose. The Committee hopes that the Greek Ministry of Labour and Social Security will make full use of the ILO technical assistance to support the quantitative analysis of these options by the National Actuarial Authority, which could then review the 2012 projections accordingly.

[The Government is asked to reply in detail to the present comments in 2013.]

Direct Request (CEACR) - adopted 2011, published 101st ILC session (2012)

Notwithstanding the fact that the detailed report of the Government on the Convention due in 2011 has not been received, the Committee notes that the 29th annual report (2011) of Greece on the application of the European Code of Social Security, being a detailed report, contains all the information requested in the report form on the Convention. Having examined this report, the Committee would like the Government to provide information on the application of the following provisions of the Convention:

Part III (Sickness benefit), Article 17 of the Convention. The length of the qualifying period. According to the report, the insured persons are entitled to sickness benefit in cash granted by IKA–ETAM after the completion of at least 120 days of insurance during the calendar year preceding the sickness notification, or during the 15-months period preceding the notification, without counting the working days realized during the last calendar trimester of the 15-month period. Taking into account that Article 17 of the Convention limits the purpose of the qualifying period to precluding abuse of benefit, the Committee would like the Government to explain the reasons which have led to the establishment of such a lengthy qualifying period, and to indicate whether these reasons still persist at present.

Article 18(1). Duration of benefit. According to the report, upon completion of the qualifying period mentioned above, the sickness benefit is granted for the maximum duration of 182 days for the same disease or for different diseases during the same calendar year. In comparison, Article 18(1) of the Convention permits to limit the duration of benefit to 182 days in each case of sickness. The Committee therefore asks the Government to explain how the continuous payment of sickness benefit is ensured to a person protected who, in the same calendar year, has contracted two or three different diseases, which resulted in the period of incapacity for work longer than 182 days.

Part VI (Employment injury benefit), Article 38. Waiting period. The report states that the subsidy of the insured person begins from the date of notification of the employment injury to IKA–ETAM. The waiting period for notifying the employment injury is five working days following the accident; in special cases the notice period can be extended. The Committee would like the Government to assess to what extent these provisions give effect to Article 38 of the Convention, according to which cash benefit for incapacity for work shall be granted throughout the contingency starting from the first day of incapacity, subject to the waiting period of not more than three days.

[The Government is asked to reply in detail to the present comments in 2012.]

Observation (CEACR) - adopted 2011, published 101st ILC session (2012)

With reference to its previous observation, the Committee takes note of the Government’s reply of 16 May 2011 to the comments made by the Greek General Confederation of Labour (GSEE), dated 29 July 2010, under article 23 of the ILO Constitution on the application by Greece of a number of Conventions, including the present Convention, in relation to the legislative measures taken for the implementation of the support mechanism for the Greek economy. The Committee also takes note of the discussion that took place at the Committee on the Application of Standards during the 100th Session of the International Labour Conference (June 2011) with regard to the application by Greece of the Right to Organise and Collective Bargaining Convention, 1949 (No. 98). It notes that the Conference Committee welcomed the Government’s indication that it was working on arrangements with the ILO for the visit of a high-level mission proposed by the Committee of Experts to facilitate a comprehensive understanding of the issues raised by the GSEE in its comments. The Conference Committee also considered that contact with the International Monetary Fund (IMF) and the European Union (EU) would assist the mission in its understanding of the situation (Provisional Record No. 18, Part II, pages 68–72). The Committee takes note of the report of the high-level mission which visited the country from 19 to 23 September 2011 and held further meetings with the EU and the IMF in Brussels and Washington, DC, in October 2011. Furthermore, notwithstanding the fact that the detailed report of the Government on the Convention due in 2011 has not been received, the Committee notes that the 29th annual report (2011) of Greece on the application of the European Code of Social Security, being a detailed report, contains all the information requested in the report form on the Convention, as well as the Government’s reply to questions raised in the Committee’s previous comments concerning the general responsibility of the Government for the sustainable financing and management of the national social security system in the context of the grave economic and financial crisis. Finally, the Committee takes note of Act No. 3863/2010 on the “New Social Security System and Relevant Provisions” (FEK A’115) of 8 July 2010, the provisions of which are contested by the GSEE.

The Government states that the distortions accumulated in the operation of the social security system have rendered it socially ineffective and economically unsustainable. As the population was rapidly ageing (four workers for one pensioner in 1950 and today, one worker for 1.7 pensioners), the expenses of the system had run out of control and were projected to reach 13.2 per cent of GDP in 2020 and 24 per cent in 2050. This unsustainable situation was amplified by the economic crisis, making it necessary to change the structure of the social security system in order to safeguard its long-term viability and public character. The adoption of the Act No. 3863/2010 introduced a unified and consolidated architecture of the pension system, which was a precondition to raising its functional efficiency and effectiveness. Different funds were merged into three covering workers, farmers and the self-employed. The supplementary pension scheme was reconstructed on consistent insurance principles by withdrawing state subsidies while introducing strict actuarial monitoring of the contributions/benefits ratio. This insurance pillar was complemented by a universal tax-financed scheme, which secured a minimum guaranteed pension for all citizens, including those who were not insured or did not fulfil the qualifying conditions. A transitional period was foreseen (2010–15) for gradually increasing the qualification requirements; pension rights acquired by 31 December 2010 were maintained in full and a number of adjustments were made to avoid hardship to certain categories of persons in the transition phase. Under Act No. 3863 an actuarial evaluation should be carried out one year after the introduction of the reforms, to assess their sustainability.

The Committee notes that in planning substantial changes to the pension system the Government sought advice and technical assistance of the International Labour Office, who insisted on the absolute necessity to adopt parametric and financing reforms to guarantee the overall sustainability of the Greek pension system. In May 2010, following the signature of the Memorandum of Understanding between the Government of Greece and the IMF, the European Commission, the Eurogroup, and the European Central Bank, an ILO mission visited Greece at the request of the National Actuarial Authority and the Ministry of Labour and Social Security to support the quantitative analysis of a set of consolidating reforms of the pension system under the provisions of the draft law No. 3863. The ILO projections delivered on 1 June 2010 showed that the reform would trigger substantial long-term savings for the pension system, to the extent that the deficit, even in view of mounting demographic pressures, would be more or less stabilized during the next five decades, provided that the assumptions of the costing held good. Noting that the new design and parameters of the Greek pension system, which should become fully operational in 2015, are in line, conceptually and technically, with the minimum standards laid down by the Convention, the Committee nevertheless considers that, in the context of the rapidly deteriorating economic situation of the country, the initial costing assumptions in the ILO projections might need to be reviewed, and that the ongoing actuarial evaluation of the Act No. 3863 presents the best opportunity for this. The Committee also considers that, in view of the international obligation of Greece under the Code, it would be prudent for the Government to specifically include among the basic parameters for the projected scenarios for the future development of the national pension system the minimum standards of the Code. The Committee wishes to underscore that an objective actuarial study drawing a red line alerting the Government to conditions which might lead to the possible violation of the minimum international social security standards, will equip the Government with an invaluable tool to exercise effectively its general responsibility for the proper governance of the social security system and seek an enlightened acceptance of the reforms by the social partners in full knowledge of the situation. Bearing this in mind, the Committee asks the Government to explain in detail in its next report the basic assumptions and the resulting conclusions of the current actuarial evaluation of the reforms introduced by Act No. 3863.

Besides the concerns over the long-term viability of the pension system, in the immediate future the country is facing the risk of the social security system being unable to withstand the continuing contraction of the economy, employment and public finances and compelled to reduce the level of protection, which may fall below the minimums guaranteed by the Convention. According to the information collected by the high-level mission of the ILO, which has specifically covered social security among other areas, it was estimated that, in the event that unemployment increases to 1 million people from the current 800,000, social security funds would be losing €5 billion annually and the sustainability of the benefits provided by them would be called into question. Already, in addition to pension cuts operated by Act No. 3863, Act No. 4024/27-10-2011 on “Provisions concerning pensions, the common pay-scale and grading system [in the public sector], the labour reserve and other provisions for the implementation of the mid-term fiscal strategy 2012–15” introduced new cuts in the pensions over €1,000 received by persons below and above 55 years of age of the order of 40 per cent and 20 per cent respectively, as well as reductions in the supplementary pensions. The high-level mission noted that such drastic reductions in the level of benefits undermine the people’s trust in the social security system and raise concerns for social justice in handling the crisis. The Committee observes that the general responsibility of the Government for the proper governance of the social security system obliges it to restore people’s confidence in its ability to be an effective and just regulator and provider of services in the interests of the Greek people. To achieve this, the following principles of social solidarity and justice on which the Convention is based, become particularly important when times are bad:

• -that the cuts in benefits, likewise their costs, shall be borne collectively, spreading fairly among the members of the society in a manner which avoids hardship to persons of small means and takes into account the economic situation of the country and of the classes of persons protected (Article 71(1) of the Convention);
• -that the cuts in benefits shall not result from the unilateral withdrawal of the State or of the employers from the financing of the benefits, thus leaving the employees protected to bear more than 50 per cent of the total of the financial resources allocated to the protection of employees and their families (Article 71(2));
• -that the cuts in benefits and related austerity measures shall be decided and managed in consultation with the representatives of the persons protected as well as of the employers and of the public authorities through the established mechanisms of tripartite social dialogue (Article 72(2)).

In the light of these principles, the Committee considers that it is incumbent upon the Government to assess, with all the parties concerned by the implementation of an international support mechanism for Greece, the resources available to those who evade contributing to the country’s efforts, in order to ensure that they are forced to contribute by legal means. The Committee would like the Government to explain to what extent it abides by the above principles of social solidarity and justice in introducing the social austerity measures in the context of the implementation of the support mechanism for Greece.

Furthermore, the need to strengthen the governance of the social security system would require the Government to plan and assess past and future social austerity measures in relation to one of the main objectives of the Convention, which consists in the prevention of poverty among the categories of the persons protected. The social security system would not fulfil its role if the benefits it provides would be so low as to push the workers below the poverty line; in such cases the State will be seen as failing to fulfil its general responsibilities under Articles 71(3) and 72(2) of the Convention. In this context, the Committee would consider it the duty of the Government to assess, together with all the parties involved in the implementation of the international support mechanism for Greece, the spread of poverty in the country, particularly among persons of small means, and the ability of the available social security benefits to withstand this trend and “maintain the family of the beneficiary in health and decency” (Article 67(c) of the Convention). In doing so, the Government should establish a comprehensive system of statistical monitoring of poverty and consider social security policies in coordination with its tax, wage and employment policies in the context of the obligations undertaken under the international support mechanism. The Committee would like to point out in this respect, as it has done already in its General Report of 2009, that “social security and the overall economy were inseparable, particularly in periods of crisis, and needed to be governed and managed together, at both the national and global levels. It meant that bringing the economy out of the crisis required enhanced measures of social protection and, indeed, making social security part of the solution.” Exploring exclusively fiscal solutions at the expense of cutting non-wage labour costs and basic welfare could eventually lead to the collapse of the internal demand and the social functioning of the State, condemning the country to years of economic depression. Taking into account the gravity of the situation, the Committee calls on the ILO to continue to provide comprehensive technical assistance to Greece in reforming its social security system, and to draw the attention of all the parties implementing the support mechanism for Greece to the need, in order to prevent the drastic impoverishment of the population and mounting social unrest, to maintain social security benefits at least at the minimum levels prescribed by the Convention, as well as to establish the statistical monitoring system of the spread of poverty among different categories of the population and use its indicators to closely coordinate social security, tax and employment policies.

[The Government is asked to reply in detail to the present comments in 2012.]

Observation (CEACR) - adopted 2010, published 100th ILC session (2011)

The Committee refers to its comments under the Right to Organise and Collective Bargaining Convention, 1949 (No. 98), with regard to the observations communicated by the Greek General Confederation of Labour (GSEE) with the support of the International Trade Union Confederation (ITUC) and the European Trade Union Confederation (ETUC) on the impact of the measures introduced in the framework of the mechanism to support the Greek economy, on the application of the Convention.

The GSEE refers to the adoption of Act No. 3845 of 5 May 2010 on “Measures to implement a mechanism to support the Greek economy by the Member States of the Euro area and the International Monetary Fund”. The appendix to this Act contains two Memorandums of Understanding concerning economic and financial policies and specific economic conditionality concluded between the Greek Ministry of Finance and the Governor of the Bank of Greece on one side and the President of the Eurogroup, the European Commission, the European Central Bank and the International Monetary Fund on the other side, which list a series of time-bound commitments to be undertaken by the Government, including efforts to moderate pensions. According to the GSEE these commitments resulted in the adoption on 8 July 2010 of Act No. 3863/2010 on the “New Social Security System and relevant provisions” (FEK A’115) introducing a radical reform of the pension system for all current and future employees, which provides for the withdrawal of the State from the obligation to co-fund the social security system and limits its liability only to the funding of basic pensions as of 2015, as well as for the withdrawal of the State’s guarantee as regards payment of supplementary pensions. The unified statutory retirement age is raised to 65 years by December 2015 and the retirement age of women in the public sector is raised to 65 by 2013. The Act also provides for the calculation of pensions on the basis of the entire working career; the rise of the minimum contribution period from 37 to 40 years by 2015; the restriction of early retirement and the increase of the minimum retirement age of 60 years by 1 January 2011, including for workers in heavy and arduous professions and those with 40 years of contributions; the introduction of reduced pension benefits for people retiring between the ages of 60–65 with less than 40 years of contribution; indexation of pensions on the basis of GNP and the consumer price index; the introduction of a means-tested minimum guaranteed pension for people aged above 65 years of age.

According to the GSEE, these substantial parametric changes established by Act No. 3863/2010 without adequate consultations with the social partners violate workers’ social security rights and negate their entitlements and rightful expectations, as the reform will result in a reduction in the replacement rate of pensions by 20 per cent on average. The GSEE further refers to a decision of the Greek Court of Audit which confirmed the existence of constitutional irregularities and the reversal of acquired rights in this Act. The GSEE considers that by introducing permanent reforms the Government has failed to observe the Convention and disregarded alternative ways to address the long-term viability and efficiency of the social security system, which do not inflict so much hardship on the persons protected.

The Committee recalls the importance it attaches to the general responsibility to be assumed by the State for the sustainable financing and management of the national social security system, which is set out in Articles 71(3) and 72(2) of the Convention. The Committee therefore asks the Government to provide detailed information in its next report on the application of each Article of the Convention in accordance with the report form adopted by the Governing Body, including as regards the concrete provisions of the new legislation and precise the basis of the calculation of the replacement level of pensions according to the new rules. The Committee will examine the comments by the GSEE, along with the Government’s observations thereto, as well as the Government’s report due in 2011, at its next session.

Direct Request (CEACR) - adopted 2007, published 97th ILC session (2008)

Part VI (Employment injury benefit) of the Convention, Article 34, paragraph 2(c), of the Convention. The report indicates that nursing care at home is provided by the Social Insurance Institute (IKA) by virtue of articles 10 and 11 of the Sickness Regulation, the English translation of which is attached. The Committee draws attention to the fact that this attachment was not received.

Article 36, paragraph 2. Since 1990, the Committee insisted on the need to re-establish in the Greek legislation the right to long-term benefit at a reduced rate for victims of employment injury with incapacity of less than 50 per cent. In its 35th report on the European Code of Social Security, the Government indicates that the actuarial services of the IKA–ETAM have prepared an economically suitable solution to this question on the basis of the estimated number of potential beneficiaries (160 persons annually), the degree of incapacity to be covered (33.3 per cent to 49.9 per cent), the possible level of the benefit (up to 40 per cent of the full amount of invalidity pension) and the overall cost of the programme (approximately 768,000 euros). In order to ascertain to what extent this solution will give effect to the corresponding provisions of the Convention, the Committee strongly hopes that the Government will take all the necessary measures to organize in 2008 technical consultations between the Actuarial Service of IKA‑ETAM and the experts of the Council of Europe and the ILO. In the meantime, taking into account the fact that cases of employment injuries resulting in invalidity of 33.3 to 49.9 per cent are not registered and monitored by the “councils of invalidity”, the Government is once again invited to consider carrying out a sociological study and statistical survey on the conditions of life and work of victims of employment injuries with incapacity of less than 50 per cent.

Part XI (Standards to be complied with by periodical payments). The Committee notes that the amount of daily sickness benefits is equal to 50 per cent of the amount of the estimated daily income of the insurance class to which the beneficiary belongs, and cannot be higher, with the increments due to family responsibilities, than the amount of the estimated daily rate of the eighth insurance class. The basic amount and the rate of increases of the old-age and disability pensions also vary depending on the insurance class. The Committee would like the Government to explain in its next report the system of insurance classes and its relation to the reference wage of the standard beneficiary selected by the Government under Articles 65 and 66 of the Convention for the calculation of the replacement rate of the benefits. Please make these calculations in such a way as to show that the maximum limit fixed for the rate of the benefits complies with the requirements of Article 65(3), while the minimum amount of the benefits attains the level prescribed in Article 66 of the Convention.

Direct Request (CEACR) - adopted 2006, published 96th ILC session (2007)

The Committee notes that the Government’s report has not been received. It hopes that a report will be supplied for examination by the Committee at its next session and that it will contain full information on the matters raised in its previous direct request, which read as follows:

Part VI (Employment injury benefit), Article 34, paragraph 2(c), of the Convention. In reply to the Committee’s previous comments, the report indicates that nursing care at home is provided by the Social Insurance Institute (IKA) by virtue of articles 10 and 11 of the Sickness Regulation. The Committee notes this information and would like to receive a copy of the said Regulation together, if possible, with an English or French translation of the abovementioned articles.

Articles 36, paragraph 2, and 38. With reference to its previous comments which it has been making for many years, the Committee notes the Government’s statement that the question of re-establishing the right to long-term benefits at a reduced rate for victims of employment injury with incapacity of less than 50 per cent, which was provided for in the previous legislation, shall be examined by the competent services of the Ministry of Labour and Social Security, notwithstanding the large financial costs for the IKA. It hopes that this examination will be carried out in the near future and that the Government will be able to adopt measures necessary to give full effect to the abovementioned provisions of the Convention.

Direct Request (CEACR) - adopted 2002, published 91st ILC session (2003)

Part VI (Employment injury benefit), Article 34, paragraph 2(c), of the Convention. In reply to the Committee’s previous comments, the report indicates that nursing care at home is provided by the Social Insurance Institute (IKA) by virtue of articles 10 and 11 of the Sickness Regulation. The Committee notes this information and would like to receive a copy of the said Regulation together, if possible, with an English or French translation of the abovementioned articles.

Articles 36, paragraph 2, and 38. With reference to its previous comments which it has been making for many years, the Committee notes the Government’s statement that the question of re-establishing the right to long-term benefits at a reduced rate for victims of employment injury with incapacity of less than 50 per cent, which was provided for in the previous legislation, shall be examined by the competent services of the Ministry of Labour and Social Security, notwithstanding the large financial costs for the IKA. It hopes that this examination will be carried out in the near future and that the Government will be able to adopt measures necessary to give full effect to the abovementioned provisions of the Convention.

Direct Request (CEACR) - adopted 1996, published 85th ILC session (1997)

With reference to its previous comments, the Committee notes the detailed information provided by the Government in its report concerning the implementation of Act No. 2084 to reform the social security scheme, and the statistics concerning the level and adjustment of the benefits provided under the new legislation. It also notes the statistics on the number of employees protected by the various branches of the general social security scheme in relation to the total number of employees.

Part VI (Employment injury benefit) of the Convention. (a) With reference to its previous comments, the Committee notes, from the information supplied by the Government in the context of the European Code of Social Security, that victims of an occupational injury with incapacity of less than 50 per cent are awarded sickness benefit for 720 days. However, according to the Convention, in case of partial loss of earning capacity likely to be permanent, or corresponding loss of faculty, the benefit shall be a periodical payment representing a suitable proportion of that specified for total loss of earning capacity (Article 36, paragraph 2) and shall be granted throughout the contingency (Article 38). The Committee therefore hopes that the Government's next report will contain information on the measures which have been taken or are envisaged to re-establish, for victims of an occupational injury resulting in incapacity of less than 50 per cent, the right to long-term benefit at a reduced rate, as was the case under the previous legislation.

(b) Article 34, paragraph 2. The Government states in its report that the medical care provided by the IKA covers all the care envisaged in this provision of the Convention, with the exception of nursing care at home. The Committee recalls in this respect that the medical care provided to victims of employment injuries shall comprise nursing care at home, in accordance with Article 34, paragraph 2(c). The Committee requests the Government to indicate the manner in which and the provisions under which effect is given to this provision of the Convention.

Direct Request (CEACR) - adopted 1993, published 80th ILC session (1993)

1. The Committee notes the Government's reports for the periods 1990-91 and 1991-92, and notes with interest the information supplied on the changes made to the various insurance schemes by Act No. 1902 of 1990. The Committee also notes the information concerning the application of Part IV of the Convention with regard to unemployment insurance, and the statistics on the number of employees protected which were supplied with the above reports.

2. The Committee has also been informed of the adoption, in October 1992, of Act No. 2084 to reform the social security scheme. This Act mainly concerns long-term benefits and covers public servants, self-employed workers and employees insured under the Institute of Social Insurances and other special basic or complementary insurance schemes.

3. The Committee notes that this new Act makes important changes regarding the qualifying periods and conditions with respect to age required for entitlement to a pension, and also with regard to the method of calculating old-age, invalidity and survivors' pensions and employment injury benefits (permanent, total or partial incapacity and death of the family breadwinner).

4. The Committee notes that the above changes affect, in the first place, workers who have been insured since 1 January 1993. In view of the fact that, however, Act No. 2084 also contains provisions relating to workers who were subject to the insurance before that date and that these provisions are designed to make the reforms in question progressively applicable to the above workers, the Committee would be grateful if the Government's next report contained detailed information on the implementation of the new Act, and in particular on its application to employees who were already covered by the scheme before 1 January 1993.

5. A. The Committee requests the Government, in particular, to indicate on the basis of appropriate statistical data, established according to the report form on the Convention adopted by the Governing Body (under Article 65) (or in accordance with the statistical model recommended by the Office in the communication transmitted by the Office on 22 December 1992 to the General Secretariat for Social Security, Ministry of International Affairs), whether the level of long-term benefits provided under the new legislation which has come into force reaches the level prescribed by the Convention in the following cases:

(a) Articles 28 and 29 of the Convention (Old-age benefit). Please state the percentage of the former earnings of an insured person to which the old-age pension corresponds, when the person has completed 30 years of contribution.

(b) Article 36 (Employment injury benefit). Please indicate the percentage of the former earnings of an insured person to which the pension corresponds, in the event of permanent serious invalidity, and of the pension which is paid to the survivors in the event of the death of the insured person.

(c) Articles 56 and 57 (Invalidity benefit). Please indicate the percentage of the former earnings of an insured person to which the pension provided in the event of permanent serious invalidity corresponds, when the insured person has completed either 4,500 days or 15 years of employment subject to contributions.

(d) Articles 62 and 63 (Survivors' benefit). Please indicate the percentage of the former earnings of an insured person to which the pension corresponds which is provided to the survivors in the death of that person, if 4,500 days or 15 years of employment have been completed.

(e) Please also indicate the earnings of a skilled manual male employee (selected in accordance with Article 65, paragraph 6 or 7, of the Convention).

B. Where minimum benefits are also provided by the insurance scheme, the Government may prefer to indicate, on the basis of appropriate statistics compiled in accordance with the report form under Article 66 of the Convention, the percentage of the wage of an ordinary adult male labourer, "unskilled worker" (selected on the basis of Article 66, paragraph 4 or 5), to which the amount of the following minimum pensions corresponds: the old-age pension provided after 30 years of contributions; the pension in the event of permanent serious invalidity and the pension provided to survivors in the event of employment injury; the invalidity pension provided for permanent serious invalidity after 4,500 days or 15 years of employment subject to contributions; and the survivors' pension provided in the event of the death of the family breadwinner who has completed either 4,500 days or 15 years of employment.

Please also indicate the amount of the wage of an ordinary adult male labourer, "unskilled worker" (selected in accordance with Article 66, paragraph 4 or 5).

C. The Committee notes that by virtue of section 66 of Act No. 2084, the readjustment of pensions provided by the various insurance schemes will henceforth take place at the same date and in the same proportion as the readjustment of the pensions of public servants, which shall occur as a result of a ministerial decision. The Committee requests the Government to supply information in its next report on any adjustment of pensions made after the coming into force of the above Act (Article 65, paragraph 10, and Article 66, paragraph 8, of the Convention).

6. The Committee also requests the Government to continue to supply, for each of the Parts of the Convention which have been accepted, statistical data on the number of workers protected by the general scheme and the special insurance schemes and the percentage that this number represents in relation to the total number of employees. The Committee also hopes that the Government will make every effort to supply information on the level of the benefits provided for the contingencies covered by each of the Parts of the Convention which have been accepted and the percentage that they represent of the previous earnings of the beneficiary or of the wage of an ordinary adult male labourer (an "unskilled worker") with the same family responsibilities as the beneficiary.

7. With respect more particularly to Part VI (Employment injury benefit), Article 36, paragraph 2, the Committee would be grateful if the Government would indicate whether, and if so under which provisions, periodical benefits are paid to the victims of employment injury for whom the degree of incapacity is less than 50 per cent.

8. Finally, the Committee would be grateful if the Government would supply the full texts of Act No. 1836 of 1989, Act No. 1874 of 1990 and Act No. 1976 of 1991.

Direct Request (CEACR) - adopted 1991, published 78th ILC session (1991)

I. With reference to its observation, the Committee asks the Government to provide information on the following points.

1. Part IV (Unemployment Benefit). The Committee again notes that the Government's report contains no information on the application of this Part of the Convention. Accordingly, the Committee can only reiterate the hope that the Government will not fail in its next report to provide the detailed information on the application of each Article of Part IV of the Convention, taking due account of the provisions of Act No. 1545 of 1985 respecting protection against unemployment, and that it will provide in particular, the statistical information that is necessary to verify that the scope and level of unemployment benefits attain the level set in the Convention.

The Committee also asks the Government to provide the text of section 5 of Act No. 2112 of 1920 and section 6 of the Royal Decree of 16 November 1920, referred to in section 7, subsection 3 of Act No. 1545 of 1985.

2. The Committee once again requests the Government to supply, in all its future reports, for each of the Parts of the Convention it has accepted, the statistical data, particularly concerning the level of benefits, required by the report form adopted by the Governing Body, in addition to general information on these Parts of the Convention.

II. Furthermore, the Committee takes note of the adoption of Act No. 1902 of 11 October 1990 issuing regulations on pensions and other related matters. It would be grateful if the Government would provide detailed information on the implementation of the above Act as it concerns the relevant Parts of the Convention that have been accepted.

[The Government is asked to report in detail for the period ending 30 June 1991.]

Observation (CEACR) - adopted 1991, published 78th ILC session (1991)

With reference to its previous comments, the Committee notes that the Government's report contains no new information on certain points raised previously. Accordingly, the Committee must address the question again in a new direct request in the hope that the Government will not fail to communicate the information requested.

[The Government is asked to report in detail for the period ending 30 June 1991.]

Direct Request (CEACR) - adopted 1990, published 77th ILC session (1990)

The Committee notes the information supplied by the Government in reply to its previous direct request concerning Part III (Sickness Benefit), Article 16, of the Convention, and Part VI (Employment Injury Benefit), Article 36 (in conjunction with Article 65, paragraphs 1 and 3).

The Committee would also be grateful if the Government would supply information on the following points.

1. Part IV (Unemployment Benefit). The Committee is bound to note once again that the Government's report contains no information on the application of this Part of the Convention. In these circumstances, the Committee can only hope that the Government will not fail to supply detailed information in its next report on the application of each Article of Part IV of the Convention, taking due account of the provisions of new Act No. 1545 of 1985 respecting protection against unemployment and that, in particular, it will supply the statistical information that is necessary to verify that the scope and level of unemployment benefits attains the level set in the Convention.

The Committee would also be grateful if the Government would supply the text of section 5 of Act No. 2112 of 1920 and section 6 of the Royal Decree of 16 November 1920, which are referred to in section 7(3) of Act No. 1545 of 1985.

2. The Committee once again requests the Government to supply, in all its future reports, for each of the Parts of the Convention that it has accepted, the statistical data required by the report form adopted by the Governing Body, in addition to general information on the application of these Parts. [The Government is asked to report in detail for the period ending 30 June 1990.]