Greece’s crisis of epic retirement expectations

We’ve all seen the queues of people photographed outside Greek banks worried their life savings are gone forever. We’ve heard the stories that people in Greece with be rationed to 60 Euros per day from local ATMs as the IMF deadline for Greek debt looms on Tuesday.

But have you heard the other part of the story… That one of the largest underpinnings of the Greek economic crisis is the country’s desire to stand up for its retirees and honour the retirement age of 61 that has stood for so long.

It seems this is one of the biggest sticking points for the Greek economic resolution, and stands as a much larger issue than the imposing of a few more taxes on the everyday people of Greece.

Imagine that… a country that sticks up for its retirees, and stands by its promises of not raising taxes of pensions unless forced. It seems silly to us outsiders who are used to having our budgets horse-traded on by our political parties. But to the Greeks, it seems the needs of the retirees that have been promised a pension should not be compromised.

The EU has spent the last few weeks imposing a list of demands on the Greeks as the terrifying final deadline for the economic bailout. There is a list of tax increases that takes more than a paragraph to share, reform of the labour markets and the setting of a new minimum wage, each of which have been spoken of as possible. And then there is the raising of the retirement age from 61 where it sits today, to 67, in line with Germany’s retirement age.

Greece’s creditors have consistently asked the cash-strapped country to eliminate the early retirement age of 61 and phase out solidarity grants for all pensioners. Finally,in the last week, Greece have offered to go part of the way… offering to raise the retirement age to 67… eventually. That is, there is clearly debate about how long they want to take to raise the age to this level.
Greek pensions are a fairly big deal, so are a significant part of the debate the IMF and Troika are having.

According to reports, the Greek side wants to increase pension contributions now and to phase in cuts over three years, starting Jan. 1, so that vested rights can be safeguarded, according to Greek newspaper To Vima.This would create pension savings worth 0.37% of gross domestic product for this year and 1.05% starting next year, according to the Greek proposal.
But in their initial proposal, the creditors had asked for pension reforms to be implemented on July 1, to save up to 0.5% of GDP this year and 1% next year. The creditors also sought to dismantle a solidarity grant for pensioners by December 2016.

Can you imagine your government fighting this hard to support your retirement pension if they were facing a gun barrel as big as Europe today?