The shallows of pensions

Posted by Antonis D. Papagiannidis 05/11/2018 2 Comment(s) Economia Blog,

Just as Greece – or, rather, its economy and its decision-taking political apparatus – was starting to approach the almost-forgotten open seas of independent policy-making, it hit the shallows. The shallows were lurking there all along, but now that the low tide uncovered them it they look daunting indeed.

 

It is all about pensions, the pension system; it is about pensioners who in Greece tend to be quite younger than abroad; it involves also a large proportion of the electorate (also, an even larger proportion of those citizens who take the pains to go to the voting urn). In an earlier stage of negotiations between Greece and its European creditors, a deal was made whereby – at the instigation of the IMF, who were reticent in accepting that the beleaguered Greek economy could deliver credible fiscal balance at the end of its Adjustment Programmes – the overall burden of pension financing would be cut by 1% of GDP by 1/1/2019. Now that this deadline is quite close, but also Greek elections loom large at the next turn of the road, the Greek Government is quite reticent to do the promised (and legislated in advance) pension-slashing. This in no way is a one-party position: both the major party of Opposition and minor ones are also pushing for a standstill in pension cuts.

 

The main argument put forward is that fiscal equilibrium has been achieved; in fact, draconian fiscal policies seem to have overperformed, so that there is room not only for pension cuts to be avoided, but also for further socially-sensitive programmes to be financed.

 

Still, Greece’s creditors are once more waving the motto “pacta sunt servanda”, while the IMF is retrenching behind the argument that pension cuts are mainly a matter of structural importance and not just of fiscal balance. According to this last argument, the high-unemployment - and low-wages-environment that has been the result of three successive Adjustment Programmes, along with a rapidly aging population, has undermined the structural long-term sustainability of the Greek pension system. Given that this system, even after a dozen successive cuts, remains relatively generous by EU terms, a further pruning of existing pension levels is unavoidable – this how the argument goes. (New pensions – i.e. those after mid-2016 – have been already severely cut).

 

This was causing already concern both in Athens and Brussels and beyond. Now, a new conundrum came to the fore, with Court decisions considering that earlier cuts are unconstitutional. If the new pension cuts are of an order of magnitude of 1% of GDP, the sums to be paid back to pensioners under such new Court precedent may well be of some 3-4,5% of GDP. There is no easy way out for the Greek Government other than procrastination  - or, to put it differently, of some more kicking the can down the road. But is “Europe” ready for such a new version of Greek problems?

 

2 Comment(s)

Andera:
10/11/2018, 02:17:22 PM
Reply

Hello Guys,Get a good life with this Life Time transforming card .I have being hearing about this blank ATM card for a while and i never really paid any interest to it because of my doubts. Until now i discovered this hacker called Elizabeth. I've been reluctant in purchasing this blank ATM card i heard about online because everything seems too good to be true, but i was convinced & shocked when my friend at my place of work got the card from guarantee atm blank card & we both confirmed it really works without delay i gave it a go. Ever since then I've been withdrawing $5000 daily from the card & the money has been in my own account. So glad i gave it a try at last & this card has really changed my life financially without getting caught, its real & truly works though its illegal but made me rich!! If you need this card from guarantee atm blank card then here is their email: elizabethcole3222@yahoo.com

STEPHEN WILLIAMS LOAN FIRM:
23/11/2018, 10:42:26 AM
Reply

DO YOU NEED A LOAN? CONTACT US NOW FOR ANY KIND OF LOAN AT A LOW INTEREST OF 2%.( stephenswillsloan@gmail.com ) Whatsapp:+14139615178 Our loans are well insured for maximum security is our priority, Our leading goal is to help you get the service you deserve, Our Loan program is the quickest. We give out loan in any currency of your choice {Us Dollar, pounds, Euro, Dinar, etc} and duration of 1 to 30 years to pay back the loan (secure and unsecured). Do you need any kind of loan and have low credit score, Have you find it difficult to get loans from local banks and other financial institutions? solution to your financial problem is STEPHEN WILLIAMS LOAN FIRM. The terms and conditions are very reasonable and considerate. We offer a wide range of financial services which includes: Christmas Loans, Business Loans, Debt Consolidation Loans, Personal Loans, Car loans, Hotel loans, Student loans, Home Refinancing Loans with low interest rate @2% per annul for individuals, companies and corporate bodies. Interested applicants should Contact us via email: stephenswillsloan@gmail.com. Apply and be free from financial bondage. Whatsapp:+14139615178

Leave a Comment