Defending the public pension system from austerity
As workers continue to face threats on their retirement pensions and social security, GUE/NGL gathered experts, trade unionists and civil society activists for a hearing on “Retirement in Times of Austerity: what future for our pension systems?” held in the European Parliament this morning.
The discussion focused on the experience of countries affected by austerity policies and debated solutions for more sustainable public pension systems.
Opening the event Galician MEP Lidia Senra Rodríguez characterised austerity measures as a form of “economic violence” calling for the protection of public pension systems, under attack in the Spanish state by the ruling Popular Party. She added:
“It is clear that the attempt to end the public pension system is part of a plan for privatisation that favours profit for private companies. This is a neoliberal strategy affecting the whole of the EU that further exacerbates the vulnerability of the working class.”
Governments claim that public pensions are at risk because people live longer. This is a fallacy as Ramón Franquesa Artes, professor at the Faculty of Economics of the University of Barcelona, explained in the first panel. Productivity, and in turn national wealth, has also increased during the same period, therefore pensions should not be sacrificed.
But there has been an EU-wide push for private pension schemes that are highly unreliable because of their high-risk investments they take. What is needed, according to Franquesa Artes, is tax reform to increase revenues of the public system so that corporations contribute a fair share.
Galician trade unionist Xabier Pérez Davila agreed about the need for tax reform and highlighted the gender gap in pensions, where women in the Spanish state receive 64 percent of the average pension for men.
The International Labour Organisation (ILO) Convention 102 says that workers should be able to maintain the same standards of living after retirement. This principle is under threat in Greece where pensions have lost a quarter of their average value since the Troika memorandum.
According to Giorgos Romanias, former Secretary General of Social Security of Ministry of Labour, Social Security and Welfare in Greece, there have been 19 pension reform laws in Greece since 2010. This too violates Convention 102, which calls for certainty and security in pensions. The average Greek citizen is being left in the dark with the money allocated for pensions having been used to cover other government expenses.
Greek MEP Sofia Sakorafa denounced the squandering of pensions in Greece:
“Pensioners have already paid for what they are entitled today. Now they see their contributions become the object of exploitation and profiteering, while they are being denied a legitimate refund, even to a minimal percentage.”
In the second panel, participants explored solutions to the crisis and ways to fight-back against neoliberal attacks. Victoria Portas Marino, spokeswoman for the State Coordinator for the Defence of the Public Pension System, proposed an increase to corporate contributions and progressive taxation whereby big earners pay more.
Dimitris Stratoulis, former Deputy Social Security Minister in Greece, favoured an increase of the number of people at work via a reduction of working time, an increase in stable employment and the social and economic integration of migrants as means to undercut undeclared work. These need to be complemented with macro-economic policies. Stratoulis urged unity in the left to defend public pensions and a collective struggle where attempts have been made to isolate individuals.
Henri Lourdelle, Policy Advisor of the European Federation of Retired and Elderly People, charged that the money the EU loses in tax havens – estimated at 1000 billion euros – could well be used to close the gap in social security many times over. But instead the EU continues to promote private pension funds as an alternative, exacerbating societal inequalities.
Greek MEP Nikolaos Chountis summed up the problem and the solution in his concluding remarks:
“In Greece and in the majority of EU countries, neoliberalism and the memoranda have targeted pension funds, the size of pensions, the age of retirement, the reduction of labour cost, resulting in the collapse of pension systems and the impoverishment of pensioners and workers”
“The defence of the right to decent and sufficient pensions is a matter of survival for the large majority of individuals and families, hence it is connected to the overthrow of anti-social, neoliberal national and European policies,” Chountis concluded.