Karl Marx had written, based on a note by the German philosopher Hegel, that history repeats itself the first time as tragedy and the second time as farce.Mark Twain had gone even further, saying that history does not repeat itself as people and times change, but it follows the same basic patterns. And this is because human nature, such as the thirst for power and the desire for re-election, remains unchanged.
Why did we refer to K. Marx and M. Twain?
In April 2001, the Minister of Labour Mr. Tasos Giannitsis of the then PASOK government under Kostas Simitis presented the proposals for the reform of the social security system. In May 2001, the government was forced to withdraw the bill under intense reactions from trade union bodies, social groups and PASOK officials.
Tempers calmed after the “struggles” were vindicated and life went on. However, this was entirely superficial. The outcome is known. Public debt swelled dangerously and in 2009-2010, the country showed inability to service it as the markets stopped lending to it, with the result that it went into a memorandum.
Asked about it, Mr. Giannitsis had stressed: “It has been estimated that the deficits of the social security system between 2001-2009 represented around 70%-75% of the total increase in public debt in the same period. They were financed, that is, by external borrowing, which led to bankruptcy. Governments saw the problem -or should have seen it-, but left it untouched, because otherwise they would have had to proceed with the reform that was cancelled -more precisely, they cancelled- in 2001 or with some similar one.”
Let us come to the present day. The country will go to national elections within the next 12 months, the polls show that single-party majority is a very difficult matter, and we observe the repetition of a familiar pattern to recall Mark Twain. The government has yielded to the temptation of announcing or implementing “pro-people” measures for pensions, satisfying certain social units in the short term but laying mines under the stability of the system in the medium to long term.
As in 2001, so today, “pro-people” measures such as the abolition of the cuts in widow's pensions according to the Minister of Labour Ms. Kerameos, the abolition of the personal difference in pensions, the extension of Hazardous and Unhealthy Occupations to new categories e.g. healthcare workers, and the apparent refusal to readjust the age limits despite the increase in life expectancy burden the pension system considerably. The total amount of burden
And all this when Greece is one of the most aged countries in the EU with the result that the ratio of workers to pensioners tends toward 1.3 to 1 when at least a ratio of 3 to 1 is required for the stability of the pay-as-you-go pension system. Of course, we do not expect to see any actuarial study that takes into account the impact of the above measures on the sustainability of the pension system to enlighten us. We will probably have to wait for the next EU report (Aging Report).
Some 25 years after the withdrawal of the Giannitsis reform, which could have prevented the collapse of the funds and mitigated the severity of the debt crisis in 2009-2010, the political system and above all the government that bears the responsibility do not seem to have learned their lesson.
The government, with the tolerance of the voiceless opposition, prioritizes the electoral horizon over the coming decades, paving the road for a new fiscal derailment with the above “pro-people” measures, whatever it may say.