Hi, Much... insane retirement age in Greece? It's too bad 61? is considered too young. It isn't insane, for sure. I think there is probably much misinformation around this whole business out there .. lol .. like about everything .. and i don't believe the age thing is the ONLY, or even the biggest complaint .. here is a long one i've just picked up .. have just glanced at it .. do agree (guessing) the government could have looked at the whole debt question more seriously years ago (particularly after losing the ability to adjust their o wn currency) .. and have included a couple of the comments ..
Greek retirement age, and more on the Greek debt crisis March 8, 2010 by lgazissax .. with links ..
One of the things that’s often been mentioned, as making for difficulty in balancing the Greek budget, is Greece’s retirement age, which all articles agree is lower than in most of Europe. Oddly, the various articles I’ve read seem to disagree on just what Greece’s retirement age actually is, with some sources saying it’s as low as 58, while others say it’s 61, and the Greek government now plans to raise it to 63 by 2015. Either age would be lower than that of, for example, Germany, which raised its retirement age several years ago from 65 to 67. On the other hand, Greece is not alone in having a lower retirement age; the OECD blog reports that Turkey has a retirement age of 58. It also reports that labor force exit ages sometimes differ significantly from the retirement age, so that Austria, for example, has an average labor force exit age of 59, six years ahead of the official retirement age.
The puzzle, to me, is how Greece’s retirement age manages to be both 58 and 61. Searching the web for further clarification on Greece’s retirement age, I found a complaint by the KKE (Greek Communist Party) from April 10, 2008, about a plan to raise the retirement age in Greece.
"The Greek government overturned long-standing retirement benefit provisions for working people in a vote last week that will have powerful ramifications for generations to come. The new “anti-social security” measures will hit working mothers especially hard, increase retirement age by two to five years, and reduce pensions by 10 percent to 40 percent for future retirees.
Greek trade union and community forces have been mobilizing for many months in an all-out effort to thwart the conservative ruling party, New Democracy, and the opposition social-democratic party, PASOK, from pushing through the legislation, which was mandated by the European Union. Both parties have been laying the groundwork to dismantle the country’s social security system for the past 20 years during their respective terms in office. Labor and progressive groups charge that the two parties are responsible for the state’s “robbing” of the pension fund and its predicted bankruptcy in the next 20 years.
The new legislation includes a packet of reforms that will essentially demolish the current system of retirement benefits. The new increases in retirement age will affect hundreds of thousands of workers. Until now, those who have completed 35 years of work had the right to full retirement at age 58. They will now have to reach 60 before becoming eligible for full pension. For women, the retirement age is increased from 57 to 60. In both cases, an additional six-month period is mandated for each working year after 2013. For those who work in hazardous occupations, the retirement age is extended from 55 to 57 for full retirement and from 53 to 55 for partial.
Working mothers with dependent children face the most dramatic cuts. Opportunities for earlier retirement with partial pension for mothers below the age of 50 with dependent children are being eliminated. Earlier retirement will now be possible only at the age of 55. For self-employed women the age of retirement is going up from 50 to 55. Special provisions for women with three or more children are being eliminated."
An Associated Press article written in February 2010 reports another retirement age increase.
"Labor and Social Security Minister Andreas Loverdos announced a two-year increase in the average retirement age on Tuesday to bring it to 63 by 2015."
Various sources report that Greece has different retirement ages for different sorts of jobs, and until recently has had a lower retirement age for women than for men.
I’m still not entirely sure what is the cause of the retirement age being variously reported as 58 and 61. Are the people saying it’s 58 simply out of date, and the retirement age has already been increased and is about to be increased again? Are these the different retirement ages for different jobs? Is one the early retirement age and one the full retirement age? (For a US example, my own Social Security annual report tells me I can retire early for a lower amount of Social Security at 62, or wait for full retirement at 67 and get more, or get still more if I retire late at 70.) At any rate, whoever is right about what the retirement age is now, raising it does appear to be one of the things PASOK has proposed to balance the Greek budget.
Part of the issue with retirement age, not just in Greece but across the board, is that increasing life expectancy means a larger portion of life retired if you keep the retirement age constant. The Economist has a chart illustrating the problem.
Paul Krugman has a post on Debt Is a Political Issue, not specifically about Greece, but relevant to Greece’s dilemma. Krugman says that the point at which debt begins to be a problem is actually fuzzy.
"… And even that, you could argue, is too pessimistic. To stabilize the debt/GDP ratio, all you need is to pay r-g, where r is the real interest rate and g the economy’s real growth rate; and right now r-g looks, ahem, negative.
And this benign view of debt isn’t just hypothetical: countries have, in reality, run up immense debt/GDP ratios without going insolvent: see the history of Britain, above.
So what’s the problem? Confidence. If bond investors start to lose confidence in a country’s eventual willingness to run even the small primary surpluses needed to service a large debt, they’ll demand higher rates, which requires much larger primary surpluses, and you can go into a death spiral.
So what determines confidence? The actual level of debt has some influence — but it’s not as if there’s a red line, where you cross 90 or 100 percent of GDP and kablooie; see the chart above. Instead, it has a lot to do with the perceived responsibility of the political elite…. "
In another post, Krugman points to Rebecca Wilder’s post about a potential problem with wage cuts in Europe.
"Latvia’s model: drop wages to increase export income. Greece: drop wages to increase export income. France, Germany, Spain, Portugal, etc., etc. It’s impossible that the whole of the Eurozone will drop wages to increase export income. It’s especially bad for countries like Latvia or Hungary, where the lion’s-share of trade occurs withing the boundaries of Europe."
An article several days ago in the Frankfurter Allgemeine discusses Angela Merkel’s dilemma, and argues that, caught between a hard to imagine prospect of Greek failure, and an also troubling prospect of helping Greece and then seeing Greece fail to do its part, she has taken the correct course in watching and waiting, a course that is already paying dividends. The article also discusses exactly what a reportedly legally prohibited “bail out” would consist of, and whether there is a back door way that Germany could help Greece while still abiding by Articles 122 through 125.
Kathimerini reports today that Sarkozy has said that Greece will receive support (support which, according to Papandreou, would involve not giving money to Greece but making sure Greece can borrow on acceptable terms).
"The French president did not give any more details but underlined that it is vital the EU prevent speculators from pushing up the cost of borrowing for Greece. “This problem could hit lots of countries if we do not come up with a collective response,” he said. “Concrete, precise measures exist [to combat speculators], which we will not be communicating tonight but which, at the given moment, will show that Greece is not just being supported politically but also in all aspects of any requests that may be made.”"
Kathimerini also says that the new austerity measures are unpopular.
"Few of the measures announced by the government last week in a bid to raise an extra 4.8 billion euros to plug a hole in public finances have wide public support, an opinion poll conducted for Sunday’s Kathimerini suggests.
The Public Issue poll indicates that only two of the key fiscal steps have substantial backing. Eight in 10 of those questioned said that they are in favor of the new tax on luxury goods, such as cars that cost more than 30,000 euros or yachts. This measure is one of the less significant ones introduced by the government, as it aims to raise just 100 million euros.
The other step that appears to be popular with the public is the increase in tax on cigarettes and alcohol, which is supported by 65 percent of the 530 respondents.
Half of those polled are in favor of a further cut in public servants’ pay but only 23 percent support slashing the two extra monthly wages that bureaucrats receive annually.
Also, 68 percent of those questioned are against the rise in value-added tax, 74 percent oppose a freeze on pensions and 78 percent disagree with the hike in fuel tax."
(See the full article for more on European Union response to the Greek debt crisis.)
On Twitter this morning, @ingrgreece points to an article reporting the Papandreou, while visiting the Brooking Institute, urged the G20 to take action to curb speculation, warning that a failure in Greece could have a domino effect. As he has in other countries for the past several days, Papandreou reiterated that Greece isn’t asking for aid, but rather favorable credit terms.
I haven’t gone through this page yet, but here’s another source of information on the Greek debt crisis: the Prime Minister’s page in Greek and English. Having visited Germany and France, today Papandreou is in Washington, DC.
Posted in Commerce, Lynn Gazis-Sax, World | Tagged Angela Merkel, European Union, Greece, Greek debt, Greek fiscal deficit, KKE, Papandreou, PASOK, retirement age | 17 Comments
17 Responses
on March 8, 2010 at 11:12 am | Reply The New DSL.: Laugh - fat Buddha can!
Prussian dressing down
Get up earlier, Germans tell Greeks First Greece was told to sell islands to pay off its debts, now the German tabloid Bild has reminded George Papandreou of the two countries’ differences
on May 3, 2010 at 9:41 am | Reply Armand
It varies because they have a tiered retirement system. You can take early retirement at 57 or wait for full retirement at 61. It will now be 63 for full retirement.
on March 8, 2010 at 11:13 am | Reply steve
I had looked briefly for the retirement age before also and found the same thing, no clarity. Unlees Soylent Cola is part of their solution, I dont think retirement at 63 is enough either, with one caveat.
Much of Europe seems less materialistic than we are. Outside of the cities, they tend ti live in small towns rather than suburbs. They just seem more sustainable with less money. Mind you this is impression not based upon data, but they may be able to get by on less as they need and expect less.
Steve
on March 8, 2010 at 12:39 pm | Reply Wired Sisters
Thank you for the visit, it's hmm, much appreciated. lol, no, no pun intended.
Was thinking last night that i must spend some more time here myself. Been slack here lately.
Late thought .. to put that in a bit of perspective ..
************************
Aussies divided on new retirement age By Stuart Fagg, ninemsn Money Thursday, May 14, 2009
The government was expecting a backlash over its decision to raise the retirement age to 67, but a ninemsn poll of more than 185,000 people has found that Australians are willing to work longer.
Treasurer Wayne Swan announced the move in Tuesday’s budget and Prime Minister Kevin Rudd has said he's ready to cop criticism for the decision, but 51 percent of voters in yesterday's ninemsn poll said they would be happy to continue working until the age of 67.
The yes camp totaled 94,782 votes, while 90,491 voters said they weren't happy about working longer.
Contributors to ninemsn’s forums on the topic were also divided on the issue.
Using a sporting metaphor, Rock of Brisbane said the government had not only changed the goalposts on retirement, but shifted the game to a new venue.
"By the time I get to retire (previously 55, changed to 59, now 67) I'll be issued food stamps, paid for by myself, twice," Rock wrote.
Others backed the government’s decision, saying Aussies should toughen up and that working beyond the traditional retirement age of 65 becoming the norm.
"We have bred a generation of wusses: kids don't work, they have no money, the government encourages them to leave home and then they bludge," wrote Still Working of Cairns. "Both my children are working, I am still working full time at 67 and loving the fact I am well and doing so."
Baby boomers born after 1952 will feel the pain first with the decision to raise the pension age but the qualifying age will increase in six monthly increments between 2017 and 2023 as the government attempts to lighten the burden of the "demographic time bomb" of a growing pension bill and a shrinking workforce.
Research suggests Australians are already working longer as superannuation funds take a hit from the global financial crisis. Australian Bureau of Statistics data released earlier this year showed that more than one-third of Australian workers over 45 plan to work until they are at least 70.
Senior’s groups backed the decision to raise the retirement age, saying the change is inevitable given the ageing population.
“Whether we like it or not, the number of people who will be over 65 is going to be twice what they are now, in 2040," National Seniors Australia chief executive Michael O'Neill said on Wednesday.
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