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Greek pension fund official paints gloomy picture amid austerity

12-15-2011 19:16 BJT

ATHENS, Dec. 18 (Xinhua) -- The collapse of welfare state in Greece to avert default have deterioted the lives of millions of Greek people, caused unprecedented social crisis and may send shockwaves beyond borders, an official told Xinhua this week.

"The wave of spending cuts that drives the social insurance system to the brink of collapse and Greek society to extreme poverty, is not the way (out of the debt crisis)," said Nikos Hatzopoulos, President of IKA Employees Federation, the largest state-run health and pension fund in Greece.

He called on Greek and European citizens to join forces and demand a change of course towards a more balanced distribution of burdens and development.

Hatzopoulos argues that "bankruptcy is already a reality" for the average low and middle-class household, struggling with a dramatic income reduction since 2009.

"Amidst mounting recession, we face revenues slippage, increasing unemployment rates and poverty.. There are already free charity meals on offer. Shortly people will be knocking on neighbors' doors asking for a kilo of milk to feed their children. The problem is huge," he said.

According to the latest official data recession has reached 5.5 percent in 2011, unemployment stands at 46.6 percent amongst youth under 25 years old, poverty rates stand at above 20 percent amongst elders.

According to non-governmental organizations in Athens, there has been a 20 percent increase in a year in the number of people queuing for a free charity meal and the number of homeless who are no longer just drug addicts.

As he organizes the next anti-austerity protest over the telephone with other unionists, Hatzopoulos warns that an irreversible meltdown of the welfare system could trigger extreme unprecedented social tension within Greece in a first phase and a domino effect across Europe.

As a public servant who has suffered a 40-percent-reduction on his monthly income in two years and father of a young student, he explained how he was obliged to ask his son to return home from the Aegean Sea island university, since the family can no longer afford to pay rent.

As a unionist, he notes down the conversations with desperate collegues who cannot make ends meet and risk losing their homes to banks due to overdue loans.

During his daily contact with retired who are being affected by similar painful cutbacks on pensions and social benefits, he feels their pain when furthermore they have to wait on average two months to be refunded for medicine costs for instance due to delays linked with personnel reduction.

He describes the nightmare of telling white-haired people who have worked hard for decades that if Greece had not secured the sixth EU/IMF aid tranche this December, the paycheques of over one million pensioners were in peril, as IKA faces a billion euro (1.31 billion U.S. dollars) operational deficit by year end.

Hatzopoulos acknowledges that the current crisis is the result of a lot of mistakes made in the past by many people. The welfare system contributed to the crisis in a way due to deficits linked to mismanagement of funds and corruption.

For example, IKA will sue next year thousands of Greeks making false pension statements. According to estimates, some 20,000 people receive for years the pensions of deceased spouses or parents that cost the system over 300 million euros (392.25 million U.S. dollars) annually.

"The labor union movement has also made mistakes. It would be wrong if we did not acknowledge the truth. But we were not the ones who took the major decisions over the past fifteen years," stressed Hatzopoulos.

He supports the call of Greek officials, analysts and foreign experts for change and wide reform in Greece, but disagrees on the way there, denouncing the austerity recipe.

"I believe we can change this policy if people affected will join forces in Greece and across Europe. We saw it happening in Greece, we have seen it spreading in Italy, France, Spain, Portugal.. And when we talk about change, we do not mean change of governments, but change in the structure of the system," said Hatzopoulos.

Editor:Zhang Hao |Source: Xinhua

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