Greek Pensions

from: Le Monde Economie 12.06.2015

author: Adéa Gouillot

translation: doxa-louise

Greek Retirees: «Impovrishing us will not resolve the crisis»

The pensions question remains one of the principal difficulties between Athens and its

creditors (the International Monetary Fund, the European Commission, the European Central 

Bank). Sunday night the 14th of June, they were still not able to arrive at a compromise on 

the measures needed to be undertaken by the Greek government so that the latter could receive 

an aid payment of 7.2 billon Euros (10 billion CAN).

Greece must act on reforming pensions within the context of the negotiations, warned, Monday 

the 15th, Gunther Oettinger, the European Commissioner for the Digital Economy. A bit earlier, 

the prime minister from the radical left, Alexis Tsipras, had declared that the insistance of the 

creditors for additional cuts to pensions «served a political end». «We will patienttly wait for the 

creditors to become realistic», he warned.

Mr Tsipras is opposed to all further cuts to pensions, while, starting from the first austerity 

measures, voted in may 2010, these have already gone down by about 15% for the weakest 

(less than 500 Euros (693 CAN) per month and by more than 44% for the more generous 

higher than 3 000 Euros (4 157 CAN).

The Greek prime minister is also opposed, and especially so, to a suppression of the EKAS, a 

solidarity payment for small pensions less than 8 472,09 Euros (12 112.17 CAN) per year.

It is notably on this payment that negotiations between the Greek government and its creditors 

have once again come to a standstill in the past few weeks. The last position

out of Brussels, dating from June 2, calls for a gradual elimination of the EKAS by 2016.

«651 Euros (902 CAN) net per month»

In 2014, 195 000 people benefited from this payment, which cost the State a bit under 630 

million Euros (873million CAN). Thanassis Tzouras is one such recipient. He has the 

weathered face and marked hands of a man who has worked hard. «Outside in all weather, 

on all kinds of worksites and for all kinds of bosses», explains this construction worker aged 

78 from a small village in Central Greece.

The demanding nature of his work put him in a special category allowing him to retire 

aged less than 50, after thirty-three years of contributions. «I receive in total 651 Euros 

net per month», states the old man. As with all the pensions in Greece, that of Thanassis 

is made up of a principal amount (481 Euros (666 CAN) in this case) and a complementary 

amount (here 113 Euros (157 CAN)), often financed by payments to an account related to 

work sector. But because he receives less than 700 Euros (970 CAN) per month, he is 

entitled to an additional monthly 57,50 Euros (80 CAN), the EKAS.

In his charming little house in the residential neighborhood of Cholargos, east of Athens, 

Nikos Tassios, aged 72, remembers his 37,5 years of work. Geological engineer with a 

diploma from the Polytechnical School of Hanover, in Germany, he directed a team at the 

Greek Geological Institute before retiring aged 66 in 2006.

Retirement age 67, since 2013 

Since then, the legal age of retirement has been set at 65 in 2010, then at 67 in 2013. Greece 

is thus among the high average for Europe. But the actual average is around 61, and the 

creditors would like to see this rise, and shortly.

Up until 2010, Nikos’ retirement came to 2 450 Euros (3 394 CAN) per month. «Today, I am in 

receipt of  1 425 Euros (1 974 CAN) per month, thus a reduction of close to 42%.»  Nikos and 

his wife had to completely rethink their lifestyle. «Clearly, when compared to my fellow citizens 

who survive on less than 700 Euros (970 CAN), I am still quite priviledged», he claims, almost 

excusing himself. «But after a lifetime of work, I had made calculations to live my retirement in 

a certain way. Our entire life became restricted at the moment when we expected to enjoy it.»

According to official numbers given by the Greek finance ministry in its database Helios, in

March 2015, Greek had some 2,6 million retirees. The average gross pension - before taxes 

and health contributions - came to 960,66 Euros (1 330.99 CAN). «Whatever cuts done and 

those demanded by creditors, the system will continue in the red so long as contributions are 

not sufficient» opines the economist specialist in pensions Plato Tinios. «We must before all 

stimulate the economy to create wealth and a unified system.»

At the price of an enormous effort to consolidate, the number of pension funds has gone from 

many hundreds before 2010 to 13. « The other priority, is to stop the hemorrhaging from early 

retirement, which greatly influences the levels of contributions intake», argues Mr Tinios. Since

the beginning of the recession, in 2009, these have progressed by 14 % in the private sector 

and 48% in the public sector, where the number of annual departures has gone up by 178% 

between 2009-2013 with respect to the period 2000-2008.

«Stability is jeopardized»

In a society where unemployment has exploded to reach 26% of the active population and 

where there is no guaranteed minimum income (like the French RSA), pensions have become 

the income net for many families, where intergenerational solidarity plays fully.

«I chose to go on early retirement in 2010 at 59 after the first announcements of cut in salary and 

pensions imposed by creditors. I told myself it was better to leave now. There is so much 

uncertainty surronding these questions that I do not regret my decision» tells us Dimitria Benatatou. 

This ex administrative assistant receives today a bit less than 1 000 Euros (1 331 CAN) per 

month. She has her 35 year old son living with her and her daughter-in-law, both unemployed.

«The possibility for early retirement was used during the recession as a substitute for social 

policy, and the cost of this is now falling on the retirees themselves, because the

stability of the social security system is compromised», observes with severity a report from the 

German foundation Bockler, published in March 2015.

Two billion Euros in the red

Pension funds are for the most part in the red with a deficit reaching for 2105 more than 

2 billion Euros (2.77 billion CAN). It is in this context that the creditors are insisting that 

Greece accept, in this aid plan, reforms that aim for ‘zero deficit’.

According to a Greek governmental source, «No European country has succeeded in imposing 

a reform in pensions this drastic with zero deficit in such a short time span. This will not go through 

here». The Greek State Council has just, in this vein, Thursday June 11, declared unconstitutional 

the salary cuts imposed by the previous government in 2012.

The unions representing the retired have, for their part, called for a massive demonstration 

June 23. «The government must not give in, warns the president of the Association of retired 

postal employees, Anastassios Georgiads, and Europe must understand that it is not by 

impovrishing us all the more that we can hope to get out of this recession.»

http://www.reuters.com/article/2015/06/10/eurozone-greece-pensions-idUSL5N0YW4AD20150610