In its proposal to the Troika on a special social security system for the self-employed in today’s context in which contributions are fixed per class across the board, the Greek government is proposing that earnings-based social security contributions be levied at 35%.
This increase, if added to tax, which amounts to at least 26% and to the amount of tax payable in advance for the following year, which currently stands at 100%, will cumulatively mean that the self-employed will have to pay at least 87% of their earnings, leaving aside other types of professional tax. Normally, this would inevitably lead to a rapid price hike, but this is not feasible because of the crisis. All sectors of the self-employed are taking strike action over social security.
In view of the above, will the Commission say:
1. Is it aware of the government’s plan for social security reform in Greece?
2. Does it not agree that imposing this hike in earnings-based social security contributions, which is tantamount to imposing an onerous new tax, will undermine the principle of free competition, based on the idea of a level playing field, to the detriment of Greek professionals within the EEA?
3. Does it agree with this political option, especially given that in Greece only about 1/5 of the population is in work?
Answer given by Mr Moscovici on behalf of the Commission
The Greek Government has committed in the memorandum of understanding (MoU) attached to the financial assistance provided by the European Stability Mechanism (ESM) to take measures by October 2015 to broaden and modernise the contribution and pension base for all self-employed, including by switching from notional to actual income, subject to minimum required contribution rules. The action is part of the broader reform of the pension system which was voted by the Greek Parliament on 8 May 2016. Harmonising contribution rates and basing them on actual income are important steps to eliminate existing disparities and inefficiencies in the system.