(from The Guardian) In the five years that debt-stricken Athens has struggled to remain solvent – surviving on rescue loans issued by the EU, the ECB and the IMF – pensioners have disproportionately endured the austerity meted out in return for the bailouts.
Nearly 45% of Greece’s 2.5 million retirees now live on incomes of less than €665 a month – below the poverty line defined by the EU. Over half that number fell below the threshold at the start of the crisis in late 2009. Only a fraction of the 1.4 million people out of work receive unemployment benefits.
A statement released by the office of Greece’s deputy prime minister, Yannis Dragasakis, recently declared: “After five years of recession and a ‘war-time’ cumulative loss of 25% of GDP, pensions have become the last social safety net preventing Greek society from completely falling apart. (In the absence of a welfare state)the elderly population is literally feeding the rest of the family.”
In the almost four months since it assumed power, prime minister Alexis Tsipras’ leftist-led coalition has doggedly stuck to its guns. Further reform will not, it says, fix the system’s underlying problems of record joblessness and a black market economy that produces a vast pool of undeclared labour.
Demographically, Greece is also on a downward spiral with one of the lowest birth rates in Europe.
Manolois Rollakis is a 75-year-old whose pension has been cut by a third to €1,100 (£780) since Greece’s debt crisis began. But while some may view that as poor remuneration for 37 years of welding carriages in an Athenian factory, Rallakis counts himself lucky.
“We keep saying that our pensions are the lifeblood that is keeping the market alive,” says Rollakis, who has lived in his apartment with his wife, Elizabeth, for the past 40 years. “If you take that away, you kill the market further and that’s before you even begin to ask why it is that a grandfather is not able to afford a Christmas present for his grandchild or the surgery required to remove a cataract from his eye?”
Greece’s creditors beg to differ. Pensions, they say, are not only overly generous, they are part of a system aimed almost exclusively at breeding early retirement schemes – anathema to Germany, the country that has contributed most to Athens’ €240bn bailout programme.
Few areas reflect the dysfunctionality of the Greek state more, or its inability to rein in budgets, than a social security network that for decades has fallen prey to patronage politics.
“It is a political quagmire and a hugely sensitive issue but without being overhauled drastically the system is just not sustainable,” says Kevin Featherstone, who heads the Hellenic Observatory at the London School of Economics.
“Since the 1990s, successive governments have always subsidised the shortfall of pension funds for political reasons. That in turn has removed any kind of financial discipline from the system.”
For far too long, he says, officials had come up with “sticking plaster solutions” to a problem that really required surgery.
With an estimated 60 enterprises closing every day as a result of the economic uncertainty fostered by more than three months of fruitless talks to release aid, the situation has been exacerbated by ever more people drawing on pension funds.
This week, the deputy social security minister, Dimitris Stratoulis, revealed that more than 800,000 had claimed a pension from the country’s biggest social security fund, IKA, since Greece’s debt drama erupted.
Locked out of the job market, the new retirees faced the prospect of being forced to survive for the next 30 years on very small monthly incomes.
Under pressure from lenders, Greece has taken a knife to the system, (instead of carrying out the necessary reforms) raising the retirement age to 67 and cutting (some) pensions above €700 a month. But while privileges granted to vested interest groups have also been pared back and consolidation of funds has taken place, the system remains highly fragmented.
Rollakis, who regularly speaks at television debates, fears the fight is far from over. Under pressure from creditors the government “may well” add pensions to the list of so-called red lines it has already crossed.
All around, Rollakis says, he sees despondency in the faces of friends, relatives, people he doesn’t know. “This was not the life that any of us envisaged. Our funds have been plundered, hospitals have been closed, there aren’t enough doctors. Unless you pay up front, you can’t get proper care and none of us have the money to do that. What more can I say?”
Perhaps Rollakis doesn’t need to. Daubed in huge black scrawl on a wall outside his home are the words: “Depression. Let’s end it. Everyone on the streets. ”
In many ways, that says it all.