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Greek pensions cost 27 billion euro per year

30 March 2015 / 15:03:52  GRReporter
2775 reads

The public debate on the Greek crisis is focused mainly on its consequences. Its causes and the domestic ones among them, however, are rarely discussed. It is no coincidence that, recently, some analysts have been trying to emphasise in their speeches that, unlike all other European countries with "memorandums," Greece is the only one in which the cause of the crisis is the failure of the public sector.

An important part of it is the pension system. Five years after the beginning of the crisis, articles with the following headlines still appear in the Greek media, "Last chance for early retirement" for insured under the age of 60. At the same time, the unemployment rate is record high, about 26% and stagnation in the economy after the announcement of early elections in December 2014 threatens the sustainability of the strongest economic enterprises and companies.

In an attempt to present the real situation of the Greek pension system, GRReporter presents an analysis by political commentator Kostis Lympouridis, which was published in the newspaper Real News on 29 March 2015 under the title, "The social security system - our national bankruptcy."

The Greek social security system is totally bankrupt, although the government does not recognize it. I know that all of its members hate figures and they have long proved that. I will present only a few specific data to show that the social security system is the national bankruptcy of Greece.

Every year we pay 27 billion euro for pensions. Employer and employee contributions cover only 15 billion euro of them. The remaining 12 billion euro come from the state budget, that is, from the taxes we pay. If you consider these 12 billion euro a small sum, bear in mind that the total amount of the income tax collected from individuals throughout the year is 7 billion euro whereas the revenue from the burdensome property tax amounts only to 2.5 billion euro.

These figures show that if we could solve the problem of the social security system, we would be able to entirely remove both the property tax and the entire income tax for individuals. In addition, certain funds would remain in order to finally emerge from the crisis.

I wonder how a left government that preaches social justice considers as fair the payment of average pensions in the range of one thousand euro to people aged under 65 (official data) from the taxes of people with salaries of 500 euro. How it considers as fair the fact that it continues to burden this bankrupt system with new rows of 50-year-old pensioners each passing day. This is illogical, unfair and outrageous.

You can read here the interview that Kostis Lympouridis gave GRReporter shortly before the early elections of 25 January 2015.


Tags: SocietyPoliticsEconomySocial security systemPensionsEarly retirementSocial contributionsTaxes
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