The government has bowed to union pressure with regard to its pension reform plan. After a meeting of the Labour Advisory Body, Labour Minister Marinos Mousiouttas said there had been second thoughts by the government which had decided to delay the tabling of the bill in the legislature. Although the original plan was to submit it in July, before the summer recess, the government will now wait until September to allow for more discussions.

Mousiouttas said he wanted to give more time for dialogue to secure convergences with the social partners. He was embarrassed to say that the government was pandering to the unions, which is why he spoke about ‘social partners’ which includes representatives of employers’ organisations that supported the reform bill and did not want more talks. The union objections to the bill received the backing of the Disy leader Annita Demetriou after a meeting she had with the SEK boss.

On Tuesday morning PEO boss Sotiroulla Charalambous was on a radio show repeating the main demand of the unions – a higher minimum pension. This was ruled out by Mousiouttas three weeks ago, saying it was not possible to increase the lowest pension by 125 per cent so it can be the same as the minimum wage. Charalambous insisted that the minimum pension was much lower than what a pensioner needed to make ends meet.

This is how unions think. The state must base the level of pensions on what people need rather than what it can afford to pay them. It is a recipe for an unviable social insurance fund if not for state bankruptcy. Why is the government still talking to people who seem not to care about the viability of the fund, and are oblivious to the fact that we have an ageing population that will be drawing pensions for much longer?

Pension reform is not an issue on which there could be consensus or even convergences. It is the exclusive responsibility of the government, which must base its decisions on actuarial studies, based on a range of factors and with the ultimate objective being the long-term viability of the fund. These are not the objectives of unions, which always seek short-term solutions, primarily aimed at keeping their membership happy. In this respect, union bosses are not good advisors and should not even have been consulted about the proposed pension reform.

Mousiouttas made it clear on Monday that he would not wait for a consensus to be achieved before proceeding. And if there were any change there would be a corresponding reduction in another sector. This is reassuring, even though it makes it even more difficult to understand why the government postponed the tabling of the bill.