Pension reform is a major sticking point in Greece’s bailout talks. But with 45% of retirees under the poverty line – many wonder how much more they can take.
ive years ago, Sissy Vovou’s pension was €1,330 (£953) and landed in her back account 14 times a year: you used to get, she wistfully recalls, a full extra month at Christmas, plus a half each at Easter and for the summer.
Now it is a monthly €1,050 – and there are only 12 months in the Greek pensioner’s year. “In all,” she said, “I’ve lost 30% of my income. And I’m one of the lucky ones. I’m in the top fifth; 80% of Greek pensioners are worse off than me.”
According to a study last year by an employer’s association pensions are now the main – and often only – source of income for just under 49% of Greek families – compared to 36% who rely mainly on salaries.With a jobless rate of about 26% – youth unemployment is at 50% – and out-of-work benefits of €360 a month generally paid for no longer than a year – pensions have become ‘a vital part of the social security net for many many people’ said Vovou. ‘Retired parents are having to help their adult children everywhere. And now they’re demanding we cut them even more? It’s just so very wrong’.
Pensions have become arguably the biggest hurdle in the tortuous, on-off negotiations between the leftwing government of the prime minister Alexis Tsipras and Greece’s creditors: its eurozone partners – the European Central Bank – and the International Monetary Fund
Before they will release €7.2bn in aid that Greece needs to pay public-sector salaries and pensions and repay €1.6bn in IMF loans – those lenders want further reforms to the pensions system – including penalties to put people off taking early retirement –
– and more cuts to even the lowest pensions.