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| Fight to save the Greek pension takes centre stage in Brussels and Athens | Fight to save the Greek pension takes centre stage in Brussels and Athens |
| (about 9 hours later) | |
| Manolis Rallakis likes to take to the streets to fight for his rights. Battles have come and gone – but always been won. “The lost battle is the battle never fought,” says the retired metal worker, his eyes fixed in a steely glare – “and now we are fighting the battle of our lives.” | Manolis Rallakis likes to take to the streets to fight for his rights. Battles have come and gone – but always been won. “The lost battle is the battle never fought,” says the retired metal worker, his eyes fixed in a steely glare – “and now we are fighting the battle of our lives.” |
| Seated in his lounge adorned with prints on orange walls, the 75-year-old embodies the Greek trade unionist par excellence: Rallakis is general secretary of the federation of the country’s pensioners. | Seated in his lounge adorned with prints on orange walls, the 75-year-old embodies the Greek trade unionist par excellence: Rallakis is general secretary of the federation of the country’s pensioners. |
| His own pension has been cut by a third to €1,100 (£780) since Greece’s debt crisis began. But while some may view that as poor remuneration for 37 years of welding carriages in an Athenian factory, Rallakis counts himself lucky. | His own pension has been cut by a third to €1,100 (£780) since Greece’s debt crisis began. But while some may view that as poor remuneration for 37 years of welding carriages in an Athenian factory, Rallakis counts himself lucky. |
| Related: Greece hopes for bailout extension breakthrough at EU summit - live updates | Related: Greece hopes for bailout extension breakthrough at EU summit - live updates |
| “It is enough just to cover the absolute essentials and is more than most,” he says on the day he led a protest march through Athens. “What we want is not only to retain the pensions we now have, but win back everything they stole from us.” | “It is enough just to cover the absolute essentials and is more than most,” he says on the day he led a protest march through Athens. “What we want is not only to retain the pensions we now have, but win back everything they stole from us.” |
| Rallakis’s fighting spirit might have gone unnoticed if the row over pensions and the need for reform were not also at the heart of the prolonged standoff between Greece and the international lenders keeping the country afloat. | Rallakis’s fighting spirit might have gone unnoticed if the row over pensions and the need for reform were not also at the heart of the prolonged standoff between Greece and the international lenders keeping the country afloat. |
| In the five years that debt-stricken Athens has struggled to remain solvent – surviving on rescue loans issued by the EU, the ECB and the IMF – pensioners have disproportionately endured the austerity meted out in return for the bailouts. | In the five years that debt-stricken Athens has struggled to remain solvent – surviving on rescue loans issued by the EU, the ECB and the IMF – pensioners have disproportionately endured the austerity meted out in return for the bailouts. |
| Nearly 45% of Greece’s 2.5 million retirees now live on incomes of less than €665 a month – below the poverty line defined by the EU. Over half that number fell below the threshold at the start of the crisis in late 2009. Only a fraction of the 1.4 million people out of work receive unemployment benefits. | Nearly 45% of Greece’s 2.5 million retirees now live on incomes of less than €665 a month – below the poverty line defined by the EU. Over half that number fell below the threshold at the start of the crisis in late 2009. Only a fraction of the 1.4 million people out of work receive unemployment benefits. |
| A statement released by the office of Greece’s deputy prime minister, Yannis Dragasakis, recently declared: “After five years of recession and a ‘war-time’ cumulative loss of 25% of GDP, pensions have become the last social safety net preventing Greek society from completely falling apart. The elderly population is literally feeding the rest of the family.” | A statement released by the office of Greece’s deputy prime minister, Yannis Dragasakis, recently declared: “After five years of recession and a ‘war-time’ cumulative loss of 25% of GDP, pensions have become the last social safety net preventing Greek society from completely falling apart. The elderly population is literally feeding the rest of the family.” |
| In the almost four months since it assumed power, prime minister Alexis Tsipras’ leftist-led coalition has doggedly stuck to its guns. Further reform will not, it says, fix the system’s underlying problems of record joblessness and a black market economy that produces a vast pool of undeclared labour. | In the almost four months since it assumed power, prime minister Alexis Tsipras’ leftist-led coalition has doggedly stuck to its guns. Further reform will not, it says, fix the system’s underlying problems of record joblessness and a black market economy that produces a vast pool of undeclared labour. |
| Demographically, Greece is also on a downward spiral with one of the lowest birth rates in Europe. | Demographically, Greece is also on a downward spiral with one of the lowest birth rates in Europe. |
| “We keep saying that our pensions are the lifeblood that is keeping the market alive,” says Rollakis, who has lived in his apartment with his wife, Elizabeth, for the past 40 years. “If you take that away, you kill the market further and that’s before you even begin to ask why it is that a grandfather is not able to afford a Christmas present for his grandchild or the surgery required to remove a cataract from his eye?” | “We keep saying that our pensions are the lifeblood that is keeping the market alive,” says Rollakis, who has lived in his apartment with his wife, Elizabeth, for the past 40 years. “If you take that away, you kill the market further and that’s before you even begin to ask why it is that a grandfather is not able to afford a Christmas present for his grandchild or the surgery required to remove a cataract from his eye?” |
| Greece’s creditors beg to differ. Pensions, they say, are not only overly generous, they are part of a system aimed almost exclusively at breeding early retirement schemes – anathema to Germany, the country that has contributed most to Athens’ €240bn bailout programme. | Greece’s creditors beg to differ. Pensions, they say, are not only overly generous, they are part of a system aimed almost exclusively at breeding early retirement schemes – anathema to Germany, the country that has contributed most to Athens’ €240bn bailout programme. |
| Few areas reflect the dysfunctionality of the Greek state more, or its inability to rein in budgets, than a social security network that for decades has fallen prey to patronage politics. | Few areas reflect the dysfunctionality of the Greek state more, or its inability to rein in budgets, than a social security network that for decades has fallen prey to patronage politics. |
| “It is a political quagmire and a hugely sensitive issue but without being overhauled drastically the system is just not sustainable,” says Kevin Featherstone, who heads the Hellenic Observatory at the London School of Economics. | “It is a political quagmire and a hugely sensitive issue but without being overhauled drastically the system is just not sustainable,” says Kevin Featherstone, who heads the Hellenic Observatory at the London School of Economics. |
| “Since the 1990s, successive governments have always subsidised the shortfall of pension funds for political reasons. That in turn has removed any kind of financial discipline from the system.” | “Since the 1990s, successive governments have always subsidised the shortfall of pension funds for political reasons. That in turn has removed any kind of financial discipline from the system.” |
| For far too long, he says, officials had come up with “sticking plaster solutions” to a problem that really required surgery. | For far too long, he says, officials had come up with “sticking plaster solutions” to a problem that really required surgery. |
| Greece spends more than any other EU member state on pensions. Close to 18% of national outlay was still being allocated at the height of the crisis in 2012. | Greece spends more than any other EU member state on pensions. Close to 18% of national outlay was still being allocated at the height of the crisis in 2012. |
| Precisely because no other issue has put the perceived profligacy of Greeks into such focus, the tug of war between Athens and Berlin over pensions has been unusually vicious. | Precisely because no other issue has put the perceived profligacy of Greeks into such focus, the tug of war between Athens and Berlin over pensions has been unusually vicious. |
| With an estimated 60 enterprises closing every day as a result of the economic uncertainty fostered by more than three months of fruitless talks to release aid, the situation has been exacerbated by ever more people drawing on pension funds. | With an estimated 60 enterprises closing every day as a result of the economic uncertainty fostered by more than three months of fruitless talks to release aid, the situation has been exacerbated by ever more people drawing on pension funds. |
| This week, the deputy social security minister, Dimitris Stratoulis, revealed that more than 800,000 had claimed a pension from the country’s biggest social security fund, IKA, since Greece’s debt drama erupted. | This week, the deputy social security minister, Dimitris Stratoulis, revealed that more than 800,000 had claimed a pension from the country’s biggest social security fund, IKA, since Greece’s debt drama erupted. |
| “The pension system is giving a false impression of security in an environment that has become very insecure,” says Greece’s leading pensions expert, the Piraeus University economics professor Platon Tinios. | |
| “Basically, it is operating as a gigantic early retirement mechanism siphoning off people from employment.” | “Basically, it is operating as a gigantic early retirement mechanism siphoning off people from employment.” |
| Growing numbers of women, aged between 50 and 55, were being lured into the system, he says, laying the groundwork for a “huge, old age poverty problem”. | Growing numbers of women, aged between 50 and 55, were being lured into the system, he says, laying the groundwork for a “huge, old age poverty problem”. |
| Locked out of the job market, the new retirees faced the prospect of being forced to survive for the next 30 years on very small monthly incomes. | Locked out of the job market, the new retirees faced the prospect of being forced to survive for the next 30 years on very small monthly incomes. |
| “From every point of view – economically, socially, gender-wise – it is making the problem worse,” says Tinios. | “From every point of view – economically, socially, gender-wise – it is making the problem worse,” says Tinios. |
| Under pressure from lenders, Greece has taken a knife to the system, raising the retirement age to 67 and cutting pensions above €700 a month. But while privileges granted to vested interest groups have also been pared back and consolidation of funds has taken place, the system remains highly fragmented. | Under pressure from lenders, Greece has taken a knife to the system, raising the retirement age to 67 and cutting pensions above €700 a month. But while privileges granted to vested interest groups have also been pared back and consolidation of funds has taken place, the system remains highly fragmented. |
| Ballet dancers, opera singers, hairdressers and state TV news anchors were among those entitled to special treatment under old labour legislation. “Itemising the exceptions in the labour market required 11 sheets of paper in very small print,” says Tinios, referring to a report he wrote in 2001. “The drastic reforms [already seen] are affecting people in their 40s who, I am afraid, are being butchered.” | Ballet dancers, opera singers, hairdressers and state TV news anchors were among those entitled to special treatment under old labour legislation. “Itemising the exceptions in the labour market required 11 sheets of paper in very small print,” says Tinios, referring to a report he wrote in 2001. “The drastic reforms [already seen] are affecting people in their 40s who, I am afraid, are being butchered.” |
| Rollakis, who regularly speaks at television debates, fears the fight is far from over. Under pressure from creditors the government “may well” add pensions to the list of so-called red lines it has already crossed. | Rollakis, who regularly speaks at television debates, fears the fight is far from over. Under pressure from creditors the government “may well” add pensions to the list of so-called red lines it has already crossed. |
| All around, Rollakis says, he sees despondency in the faces of friends, relatives, people he doesn’t know. “This was not the life that any of us envisaged. Our funds have been plundered, hospitals have been closed, there aren’t enough doctors. Unless you pay up front, you can’t get proper care and none of us have the money to do that. What more can I say?” | All around, Rollakis says, he sees despondency in the faces of friends, relatives, people he doesn’t know. “This was not the life that any of us envisaged. Our funds have been plundered, hospitals have been closed, there aren’t enough doctors. Unless you pay up front, you can’t get proper care and none of us have the money to do that. What more can I say?” |
| Perhaps Rollakis doesn’t need to. Daubed in huge black scrawl on a wall outside his home are the words: “Depression. Let’s end it. Everyone on the streets. ” | Perhaps Rollakis doesn’t need to. Daubed in huge black scrawl on a wall outside his home are the words: “Depression. Let’s end it. Everyone on the streets. ” |
| In many ways, that says it all. | In many ways, that says it all. |