The government plans to further reduce insurance premiums by at least 0.6 percentage points. during 2023 Deputy Minister of Labor and Social Affairs Panos Tsakloglu leaves, talking to Kthere is room for even greater reductions if conditions permit.

According to the deputy minister, the government’s commitment to reduce the so-called “tax wedge” could already be fulfilled, with a total reduction in the burden on both employers and employees by a total of 5 percentage points, if the recent crises (health and energy) had not. Regarding the reaction to the decision to increase contributions to professionals by 9.6%, Mr. Tsakloglu explains that in a punitive social security system like ours, if the increase in pensions is not combined with the increase in contributions, then the state’s share of funding and, therefore, the social security deficit collateral will be overpriced.

The deputy labor secretary clarifies that if all the interventions already voted are implemented, then no new structural interventions in the insurance system will be required over the next four years, and also opens his papers for retroactive reimbursement scenarios for memorandum cuts. in additional pensions and gifts – benefits, making clear, on the one hand, that there is no necessary fiscal space, on the other hand, that certain sectors, such as pensions, should not be supported at the expense of others, such as education, health and welfare.

Freelancers

In particular, Mr. Tsakloglu elaborates that, although he is aware of the reaction of the self-employed, the decision to increase contributions by 9.6% was based on three principles. “The system is beneficial. We have raised pensions for the first time in 12 years, but if we do not have a corresponding increase in contributions, the social security gap increases, and in particular the share of state funding in excess of the amount corresponding to the payment of the national pension. If the amounts coming from contributions decrease, public funding should be increased,” he notes. At the same time, he points out that the self-employed should be aware that the compensatory pension is directly related to the contributions they have paid. Therefore, very low contributions will lead them to a very low pension in the future. Finally, it highlights “the fairness issue between freelancers and employees” as “even after the amplification from January 1, 2023, the fees paid by most professionals are lower than those of the unskilled worker.” As for the argument “yes, but the contributions of employees were not adjusted”, the deputy minister answers that according to the “Ergani” system in the last 3 years, when the contributions of the self-employed were “frozen”, salaries, therefore, contributions increased by an average of 12.4%.

Some sectors, such as pensions, should not be supported at the expense of others, such as education, health, and social security.

energy crisis

In response to question “K”, if due to the suffocating situation that has developed in enterprises, mainly due to the energy crisis, is it planned, at the request of the self-employed, to activate the regulation of 120 installments, or even a new regulation with many installments, much more than 24, which are constantly applied, Mr. Tsakloglu is categorical. “I understand that in extraordinary circumstances we can take extraordinary measures. However, most of the energy costs for both households and businesses were covered by the state budget. And if we look at the overall result of the growth of the Greek economy, it was anything but negative. We are much higher than the European Union average, and we had the highest rate in recent years, if we exclude the period of the pandemic. Therefore, I do not consider the new regulation to be either necessary or desirable at this stage,” he replies.

Mercenaries

On the contrary, a competent Deputy Minister leaves open the possibility of further reductions in contributions to paid work during 2023. “Reducing contributions is a policy that, based on research, is especially encouraging for job creation. In other words, whenever we have a reduction in contributions, we have a limitation of the so-called “tax wedge”. Enterprises’ costs per worker are lower, but the amount the worker receives out of pocket is higher. The government has already embarked on a bold reduction of contributions by 4.4 percentage points, with the result that if in the past this tax wedge was one of the highest among the OECD countries, now our country is somewhere in the middle of the distribution”, he points out. Adding that ” the government’s intention is to start cutting premiums whenever there is some fiscal space, given of course that this too has limited scope as pensions, the national health care system, etc. are funded by premiums In fact, it shows that at least 0.6 units remaining to meet the government’s commitment to reduce contributions by 5 percentage points would have already been reduced if all these repeated crises had not repeated, and also that this is something “that in the medium term it is possible and maybe there is room for something more.”

pensioners

Answering the question of whether there is a retroactive return of funds to pensioners who have not applied to the court, the Deputy Minister, meaningfully indicating that in the event of their general return – and not the application of court decisions in the form in which they are determined by the UK – the cost reaches 2.6 billion euros, it is stated that only one sector in our country is higher in terms of public spending compared to other European countries, and that is pensions (excluding the national defense sector) . “Fiscal space is not limitless, and at the same time, we all agree with the government’s core principle that tax rates should not go up anymore,” he says, adding: “So I think that’s also particularly difficult to implement in the current environment.” “.