Time to find a different banker?

on . Posted in English texts


Workers are protesting - many of them justifiably - about the way in which the government has managed the reserves of their social security funds. They are complaining that their money was used to bankroll development (when they were forced to deposit it in banks without earning interest), that their money was used for speculative purposes on the Athens Exchange, that it was plundered via structured bonds, that it was turned into cables for the Public Power Corporation etc.

What these grievances tell us is that workers have for half a century been entrusting their savings to a welcher state. A state that will not hesitate to rob the elderly (by giving them pitifully low pensions) so that it can give money to high-rolling businessmen (in the form of low-interest loans) or to party fraudsters via structured bonds. The question, therefore, is why they let their money be managed by a welcher? Why don't they ask for some form of divorce that will allow them to have clean accounts and a healthy friendship?

Some argue that the hullabaloo created by state management ensures the system's redistributive nature. Redistribution does take place, but (as the workers argue) it does so to the detriment of the lower classes.

Within this dizzying system of redistribution of wealth, however, there are a number of people who gain numerous small advantages and there are those who gain the power to exert pressure on an already indifferent political class. What you end up with is a social security system working at many different speeds, a complex system where no one really knows what they're paying into and what they're getting out of. By its nature, a redistributive system creates bureaucracy, waste and smaller or greater favors.

Redistribution must, however, take place. A society cannot leave some of its members destitute, even if they did not have the foresight to save when they were younger. This is the social contract we have with the state. We must all pay taxes (and rightly so) to help the weaker members of society. The real issue, though, lies in the secondary and tertiary mechanisms that are supposed to get the job done and these are doing nothing to improve the efficacy of the welfare state. They are simply multiplying the amount of bureaucracy, waste and favors.

And ultimately, any reforms decided today will be made redundant in the future by the demographic time bomb. The only way out of a permanent social security crisis is to separate the system into one welfare pillar that belongs to the state and another investment scheme that everyone would be free to choose.

KATHIMERINI English Edition, 21/03/2008