How did German Finance Minister Wolfgang Schaeuble say it exactly? “The deal is a good thing and a chance for Greece.” While everybody can assume what Schaueble considered as “good” with Greece’s creditors in his mind, the same “everybody” can assume that if it is good for Greece the country, it be must certainly the hell for Greeks, the debt-ridden country’s people.
The 3. bailout program approved by the majority of SYRIZA’s MPs, its junior coalition government partner ANEL, three opposition parties and the Eurogroup Finance Ministers will bring dramatic cuts on pensions and welfare benefits – next to tax increases and health care contributions.
Cuts on welfare benefits, main and supplementary pensions will reach even 60% of the state spending.
More than 3.3 million citizens like pensioners and low-income households will see their income being reduced as the bailout imposed cuts in welfare benefits will reach 60%, cuts in main pensions 6% and cuts in supplementary pensions 28%.
In technocrats sheets, the spending cuts will reach 2% of GDP and in real numbers 3.6 billion for the years 2015 and 2016. Cuts in pensions should be 0.25% – 0.5% of GDP in 2015 and 1% of GDP in 2016.
It is worth noting that after the Eurogroup meeting last Friday, Managing Director of International Monetary Fund, Christine Lagarde linked the IMF’s participation to 3. bailout and a potential debt relief to a “comprehensive package of measures for the pensions.”
The biggest cuts will affect the welfare benefits for citizens with disabilities, low-pensioners, children allowances etc. The total cut will have to be 900 million euro. The current spending of state budget is 1.5 million euro per year. As of March 2016, welfare benefits (EKAS) for low-pensioners will have to be scrapped for 20% of the eligible citizens and have the state save 140-1450 million euro.
Next will be the cuts in main and supplementary pensions as wells as lump sums. Greece is obliged to save 1.5% of GDP or 2.5 billion euro in real numbers. Main pensions are expe3cted to suffer a decrease of 6% and supplementary pensions a cut of 28%.
The thorough package referring these cuts will have to pass the Greek parliament in October.
Minimum Pension down to €392 gross per month
Over the weekend, Alternate Labor Minister Pavlos Chaikalis issued a circular that decreases to below 400 euro per month, the minimum pensions – that is pensions after 15 years of work, due to disability of 80% or due to accident.
The minimum pensions are currently €486 gross or 460 euro net for IKA pensioners and €417 gross for self-employed. With Labor Ministry’s circular, the minimum pension falls to €392.7 gross and will affect those who went into retirement as of 1.1.2015 – however only for IKA pensioners, depsite the fact that creditors had demanded minimum guaranteed pension for all funds. (see Table I).
Table I.
Table I & II are from a document sent by creditors to Greece before the deal.
Table II.
As creditors demand further cuts in pensions (see above) the minimum pension is expected to drop further down to €332 gross. According to some media,those going to early retirement before the age of 67, will receive some €200 per month – a kind of ‘allowance’ and their pension (minimum or not) after the age of 67 which will apply to all as of 1.1.2022.
Anyway the Ministry’s circular refers to minimum pensions distributed by Greece’s largest insurance fund IKA, where the majority of private sector employees and some self-employed are insured.
It is not clear what other insurance funds will do as their minimum pension is €732 gross. Unclear is also what will happen with the maximum pensions cap which is €2,700 gross per month and affects several thousands beneficiaries.
The idea of lowering the lowest pensions in not new. According to old dogmas by Greek previous governments: lowest pensions are been received by a lot of people, while higher pensions are been received only by a few. Therefore, we cut the lowest pensions for the weak, because the highest pensions are being received by our friends and supporters.
One should not forget that the bailout programs are been voted by three opposition old regime parties (New Democracy, PASOK and To Potami), while SYRIZA has a lot of disappointed PASOK members. And government “clients” have to be satisfied….
Nevertheless before one comes to quick conclusions about the minimum pensions and whether a pensioner with 15 years of work or disability etc is eligible to receive 490 or 390 euro or even less or more, one should take into consideration that Greek labor craft often is obliged to change the pension and insurance fund depending on the art of work he/she is doing. At the end, Greek workers may find themselves to receive proportionally pensions from 2-3 funds and await for 2-3 years to receive the full amount of their monthly pensions.
A colleague was telling me the other day that on long term Farmers’ Fund pensions (OGA) will go from €320 currently down to €120.
The pension reform as demanded by creditors is a little ‘much too complicated’ to be featured in full here in this blog, as there are exceptions to the rule, age groups, kind of work and other factors that are of direct interest if one is affected by the reform. Furthermore, the final reform will be tabled to the Parliament in 2 months from now.
However, fact is
1. that retirement age should be 67 – as already stipulated in the first bailout MOU I. in 2010 and was implemented only to specific groups of workers.
2. the retirement age 67 will be reviewed every 10 years depending on the life expectancy. (see Table II).
PS if you are in your early 30’s now, you may see yourself going into retirement at the age of 70 or more due to life expectancy. Alas! With unemployment, inadequate salaries and wages, bad health care services, low quality food, high level of stress and other ‘bad things” due to bailout agreements and programs, one may exit this earthy world already at the age of 50-something. And creditors will be obliged to lower the retirement age due to ‘shorter life expectancy’ of the troubled Greeks.
PS Minimum pension below 400 euro. Ha! That’s pension to die for. Literally.
We in Slovakia have higher GDP per capita than Greece, don’t have huge debts, neither austerity measures, and our minimal pension is 269,5 EUR … you poor victims.
it doesn’t mean much as long as you don;t add cost of living, basic needs etc
Sure. But why food (not only) is much more expensive in Greece than in Europe? As far as I am concerned, you are more expensive than Austria or Germany. Something must be wrong. Oligarchy? No free competition? Family clans like in case of Varoufakis?
LOL Varoufakis + family clan??? You ignore the big political families…
If you count monsters like Lidl as being normal “cheap” you might ask Aldi-Hofer who closed down 200 shops and left Greece in 2010 or check topographic maps and every transport to islands must be counted into the whole picture; the latter means also the abolished island-discount will lead to even higher prices.
And all the rest (rent, healthcare, etc) gets covered by the welfare-system just like in Germoney, where if it’s getting under 773 Euros you can ask for Hartz4
There is no medical (healthcare) insurance in Greece?
There is but more than 25% can’t afford it and the number keeps growing. It’s not like all these brilliant statistics which let other countries look worse by forgetting about that there is a welfare state who will pay for it. Hopefully the Troika will make the mistake to make it an obligation just like in other states, because then the Greek state has to do the same and then we might come to the point there everybody can see that a state without welfare is not European; this will start the next weeks anyway because the European public will ask why rescued refugees have to die of thirst.
oh there is, but also austerity has drastically decreased the service for the insured and health care costs more and more and has to be paid from the patient’s pockets.
Isn’t it automaticly (allways) payed by emloyer?
health insurance is paid both by employer & employee and only by ’employer’ in case of self-employed & free-lancers
You have to pay it if you are employed (is it MUST)?
I am asking this, because non paying medical insurance for employees is criminal in Slovakia. (Well our judges love money, so it is unusal to go to jail, but majority of employers just do not want to risk criminal procedures and pay)
of course it is a must. also if you’re self-employed or free-lancer.
I am lost. It is must and 25 % just don’t pay. You just don’t respect laws in Greece?
‘25% just don’t pay”?
Do they?
you claimed that
Your main problem is not crisis, but simple fact that you ignore rules/laws. You Greeks don’t pay tax, you don’t pay medical insurance, but expect the state and hospitals working…
you don’t have any idea about Greece and you don’t want to take down your propaganda glasses. never mind.
It was not me b.t.w. who claimed look at Giaourti: “There is but more than 25% can’t afford it”
I am afraid KTG, that I am trying to look at numbers (now – do Greeks pay insurance or 25% don’t) but instead of answers I receive some blabla about being influenced by propaganda.
numbers tell half the truth. I have no idea if 25% pay or not pay – and then you have to ask: why not pay? they don’t want or they can’t afford?
How shall people pay, rob tourists? You want us to believe you’ve missed the input that some 3 million people are not insuranced anymore because they and their families drop out of healthcare after one year of unemployment and that at the moment if more than 100.000 would get allowance that would be because nearly 20.000 unmentioned lost their jobs due to capital controls?
You loose insurance after a year of unemployment? If true – here you should invest instread of reopening radio/tv.
You should invest in brains or tell this Europe. Calling them criminals only fascists hunt against Greeks like this if they “don’t know” that after a year unemployment allowance and health care insurance is no more.
With official 25% unemployed who shall pay the fees if one doesn’t get any allowance?
You can’t have higher GDP than a country where exports are as strong as the German; don’t forget Greece’s fleet.
And if you really have then only because you produce luxury-bullshit like cars or other unsustainable shit that normal humans don’t need.
Just like the corrupt bastardokratia in Germoney, they allow their companies to build cars for the the elite of slavedrivers in China and so are also pimps in child-work.
Yes Germany only has such a high GDP because they produce nothing but luxury bullshit nobody needs, right.
1. Vehicles: $267.8 billion (17.7% of total exports)
2. Machines, engines, pumps: $262.7 billion (17.4%)
3. Electronic equipment: $147.4 billion (9.8%)
4. Pharmaceuticals: $80.2 billion (5.3%)
5. Plastics: $70.9 billion (4.7%)
6. Medical, technical equipment: $68.6 billion (4.5%)
7. Oil: $47.4 billion (3.1%)
8. Aircraft, spacecraft: $47.4 billion (3.1%)
9. Iron or steel products: $34.3 billion (2.3%)
10. Organic chemicals: $33.5 billion (2.2%)
With all that destructive cars and aircraft it’s 10% Germany’s share in the CO-2-fascism against the majority of the humans, all creatures and the whole nature. Interesting enough that useful stuff like cargo-ships run by wind-turbines is forbidden to produce by market-corruption and for sure the reason won’t be why wind-mills are shit: Just like play-stations and smart blabla-toys the propellers need coltan 6 million get slaughtered for but this massmurder is necessary to produce any of this bullshit made by ex-humans.
It’s all needed to destroy the earth and drive most people into misery as cars are climate terrorists, for resources like oil and steel Germans suck dictatorships and you truly forgot the reason why Germany must take the most refugees: their murderous weapons industry.
You really do live in your own little world don’t you? Wind turbines are forbidden? Have you seen the north of Germany? Are you aware that in some of the states about 50% of the electricity needs are served by wind turbines?
If you happen to have a schematic that makes a wind powered cargo ship feasible, I am sure you would have your ticket to being a billionaire in hand. I know some schematic but I would never ever produce those ships because there would be nobody to use them over the older ships, which happen to be faster.
Freight ships more than 200 meters long and 25 miles fast were made in Germoney and in Korea but they don’t get produced. As there is nothing important to transport faster it’s a thing of money dictate and corruption by oil-companies but world-trade is a death-machine anyway; most of the shipped shit is only for the decadence of consumerism of rich brats.
In times of climate chaos all the other ships have to be banned, there is no other way to safe the world but this is not in the interest of people whose “civilization” only could develop because of fair weather conditions, they also believe won’t get worse. After the 1st genocide by the terror of the “mobile world” – Hurricane Mitch – the consequence should have been a banning of all cars, ships, air-planes and meat-production but nothing happened, instead they report about tornadoes outside the usual areas only on regional news and every goatshit-town gets an airport.
And now even to reach their egoistic 2 degrees only will work if the First World nations would have total blackouts after every 6 months for the rest of the year. And why? Because they are too old and they hate their kids, their cars rape the planet just like their ancestors raped horses as this is the “human” way to be mobile.
Sure Bro whatever you say. Guess you should start by not using a computer then.
Typical German mentality remains of take it or leave it and jump over the wall: Out, out, out! (So, we can keep on killing silently) The world would be so much better with two Germanies or none of all, even for Germans, just imagine how many more thousands got murdered by cars since the wall came down.
I find it highly problematic (euphemism) to change pension levels for people *already retired* (who presumably made decisions about savings, timing of retirement, etc based on an understanding of the levels of pension/terms to qualify for pension at different levels). It is one thing to “recalibrate” pension levels by pegging it to cost of living (1 euro in 2010 might purchase a different amount of goods in 2015), but the imposed plan says nothing about cost of living. The only issue is the *cost of the program* relative to GDP – in other words (as KTG suggested in the article), it is all about “Greece” (its budget, its place in the EZ) and “creditors” (institutions), not at all about Greeks (individual men and women).
Further note: Cost of living in Bratislava vs Athens:
http://www.expatistan.com/cost-of-living/comparison/athens-greece/bratislava
None of these numbers discuss how much is covered by the State (health care, education, etc). In the US, the answer is: virtually nothing – so salaries and private incomes are inevitably higher (with lower, often highly regressive taxation)
it’s for the top statistics to find out real income – real cost of living. and even those guys do not manage to find it out.
In the US most states offer basic aid such as health care, food stamps, child care assistance, unemployment, cash aid, and housing assistance.
In phone books you can find it under “Human Services, Family Services or Adult and Family Services”
One reason for higher prices in a country than another can be the level of VAT. Ninety percent of the Portuguese economy was based on small and median enterprises (under 500 workers), most of then could rather be called micro or family enterprises). When the Troka demanded the VAT to be increased by 4% to 23%, many – thousands- were closed. This incresed pressure on imports and in Social Security. Another reason I can ser is the “price of money” – or the interest of bank losns available to enterprises. Peripheral countries oay more. So we need super enterpreneurs here go manage companies in a viable way, while average entrepeneurs are good enought in Central Europe. And all this os convincing me than there os no question of rescue whatsovere, the whole plan of our dear “partners” and our dear nacional goverments os destroying the possibility of a functioning economy in the peripheral countries.
of course they want to destroy peripheral national economies and create little “China countries” in Europe.
It is – A fool & his countries money – sorry – It is the keyboard.
The bills have just gone up again, across the board in Australia, & most of our population is unemployed.
Go figure the genious mind set of the political arena that is running the country.
It all boils down to insatiable greed.
The CIA World Factbook (BTW very useful and always up-to-date) puts the figure of the Greek population living under the poverty line at 44 pc, one of the highest not only in Europe, but in the world. This even before the cuts of the pensions. So we can presume that all the intelligent people in Europe etc. are well aware of the humanitarian crisis in Greece and will act accordingly. Alas, the reality is different when you speak to your friends and other people you know and who’s opinions are usually formed without a sufficient knowledge of the facts or without examination. Very quickly you have the feeling that you are speaking towards a wall (like Tsipras with the EMP). Always the same stereotyped ideas and phrases. ” oh yes, we have lot’s of sympathy with the Greek people, we know they suffer, its terrible and so on. But then they turn the disk.”Do not forget all these very rich Greek oligarchs, family-dynasties with their big villas, swimming-pools, yachts, luxurious and extravagant wedding-parties (everybody knows their names here and abroad). And then the discussion brakes down and its time for fresh air or a drink. Honestly, I have capitulated and try to keep my mouth shut now. It is hoppeless. In my view the humanitarian crisis in Greece resembles a bit the pre-revolutionary situation in France, only on a higher level. The French thinker Chamfort caracterized the dire situation as follows: “There can be no doubt that in France there are seven million beggers and twelve that are too poor to give alms.” (The population of France then was 24 mio). Take these tree classes in the Greek society of today and the picture is complete. What shall we do? I really do not know. Its up to the Greek citizens and their good friends to decide. Words as mine are of no importance because they are written in the wind.