Identifier
Created
Classification
Origin
07ATHENS2367
2007-12-17 14:26:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Athens
Cable title:  

GREECE: VETERAN PETRALIA NAMED EMPLOYMENT MINISTER

Tags:  PGOV PREL GR 
pdf how-to read a cable
VZCZCXRO3609
OO RUEHIK RUEHPOD RUEHYG
DE RUEHTH #2367 3511426
ZNR UUUUU ZZH
O 171426Z DEC 07
FM AMEMBASSY ATHENS
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0915
INFO RUEHZG/NATO EU COLLECTIVE PRIORITY
UNCLAS ATHENS 002367 

SIPDIS

SIPDIS
SENSITIVE

E.O. 12958: N/A
TAGS: PGOV PREL GR
SUBJECT: GREECE: VETERAN PETRALIA NAMED EMPLOYMENT MINISTER
AS BATTLE LINES DRAWN OVER PENSION REFORM

UNCLAS ATHENS 002367

SIPDIS

SIPDIS
SENSITIVE

E.O. 12958: N/A
TAGS: PGOV PREL GR
SUBJECT: GREECE: VETERAN PETRALIA NAMED EMPLOYMENT MINISTER
AS BATTLE LINES DRAWN OVER PENSION REFORM


1. (SBU) On December 14, veteran Greek ruling New Democracy
party member and former minister Fani Palli-Petralia was
named Minister for Employment and Social Protection as the
government faces a tough, uphill fight to reform the ailing
state-run pension system. Petralia ) a former Tourism
Minister -- replaces Vasilis Magginas, who resigned abruptly
amid allegations of nepotism and corruption (illegally
employing Indian domestics he claimed were "personal friends"
and building a country villa with a food-stand permit). In
accepting Magginas' resignation, PM Karamanlis was making
good on his promise to fight government corruption wherever
it might be found. In naming Petralia, he tapped a loyal
veteran, though most observers expect critical pension
negotiations will be conducted by Economy Minister
Alogoskoufis and Public Works Minister Souflias, with
Petralia handling PR.


2. (SBU) Magginas was the second Employment minister to be
jettisoned in less than a year. His predecessor, Savvas
Tsidouridis, was forced out in April over allegations that

SIPDIS
his senior staffer was involved in stock exchange scandals.
Petralia, meanwhile, faces a tough fight on pension reform as
Greece's convoluted pension system is expected to cost the
equivalent of one-quarter of Greek GDP within fifteen years
as a result of an aging population, chronic fund
mismanagement, and government wariness of touching this
third-rail issue. A nationwide strike over pension reform
paralyzed much of Greece last week, and labor unions are
accusing Karamanlis of breaking his pre-election pledges of
not raising retirement age and contributions and not cutting
current pensions. This is in spite of the GOG's reiteration
of "The Three No's" -- no change in the pensionable age, no
reduction in the level of pensions, and no increase in
contributions.

SPECKHARD