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Greek Pension Funds Have 2B Euro Deficit

Greek pensioners protests against austerity have been ignored
Greek pensioners protests against austerity have been ignored

Without finding additional financing to fill what could be a reported two billion euro ($2.73 billion) gap, there is a risk the government won’t be able to keep paying pensions after the end of the year, officials said.

The deficit, reported by Kathimerini, does not include possible losses from the new reductions to so-called third-party levies within the year, or the cuts in resources that partly finance the funds.

The third-party charges bring in some 2 billion euros into the pension funds annually – enough to fill the hole. Some funds, including for public works contractors, depend entirely on third-party levies such as collections from the certification of public works, levies imposed on construction projects and the charge imposed on machinery imported for works.

There’s a similar problem with the funds for legal professionals, and with farmers, which collects some one billion euros from so-called social resources.

The Development Ministry’s launch of an online platform for the registering of citizens’ complaints regarding third-party levies has generated major concern among social security funds which can’t afford further revenue losses.

The biggest problems are at the main Social Security Foundation (IKA), the Freelancers’ Fund (OAEE) and the farmers’ fund (OGA), where servicing expired contributions has gotten so bad there’s an essential payment stop in the funds that survive on freelancers’ contributions.

The deficit at IKA amounts to 807.9 million euros, at OAEE it has come to 462.7 million, while at OGA it has reached 181 million euros, the newspaper said.

The cash problems of social security funds that rely on freelance workers is reportedly the first issue that new Deputy Labor and Social Insurance Minister Antonis Bezas has been asked to resolve.

Big pay cuts, tax hikes, slashed pensions and worker firings the government has imposed on orders of international lenders has put 1.4 million people out of work and closed more than 68,000 businesses.

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