German anger at paying for luxury Greek pensions

Bild on the Greek bailout

It is only a matter of days until Germany starts handing out billions in aid to the Greeks, according to Chancellor Angela Merkel.

But for some experts, Greece is just a bottomless pit. And now anger is increasing in Germany, with many asking why they should pay for things like the luxury Greek pension system.

They highlight superior Greek pensions, that German workers will now be paying for –

The fact is that in Greece, the employee’s contribution is only 6.67 per cent of the gross wage compared to 9.95 per cent in Germany. The government contributes a subsidy from tax revenues.

That means that with a broke Athens seeking outside help, Germany and the rest of the EU aid givers must start pouring cash into the bottomless Greek pension pit…

And a handy table that breaks down the differences in detail –

Greece Germany
Years of work to earn full pension: 35 45
Proportion of wages as pension: 80 %* 46 %
Number of pension payments a year: 14 x 12 x
Pension increase 2004: 3 % 0 %
Pension increase 2005: 4 % 0 %
Pension increase 2006**: 4 % 0 %
Minimum payment (Euros): 445 ca. 600
Maximum payment (Euros): 2538 ca. 2100
Minimum pension age for men: 65 65–67
Minimum pension age for women: 60 65–67
Average pension entrance age: 62,4 63,2
* for insurance beginning before 1.1.1993, 70% after 1.1.1993, average earner;
** last available figures; sources: Eurostat, OECD, Dt. Rentenversicherung

Update:

From Spiegel – Will the Greek Bailout Destroy the Euro Zone?

The Greek government’s appeal for help is putting Chancellor Angela Merkel under pressure. With Germany required to provide billions over the coming years to pay for the Greek bailout, there are growing calls in the German government for Greece to withdraw from the euro zone.

Update 2

Two German Economists debate the Euro.

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  • Tochais Síoraí

    Still it’s hard to be too sympathethic to the German taxpayer when one considers that the brutality of the German occupation and the associated famine in which thousands died is still within living memory for many Greeks.

  • Greenflag

    I’d like to see a table comparison between Irish, British and Greek and USA .

    The Germans have had enough . To be fair it’s their own fault for ‘trusting ‘ the Greek Government’s ‘figures ‘ back in 2000. They allowed Euro enthusiasm to cloud due diligence .

    Still there is nothing else to do except try to get Greece back to economic health . Whether that’s possible is debateable .

    TS

    Let’s hope the English taxpayer doesn’t start feeling the same towards Northern Ireland as the Germans are feeling towardss the Greeks eh ?

  • glencoppagagh

    Mack
    A typically facile tabloid analysis from Bild. As far as I know, nobody is ‘handing over’ cash to the Greeks. They’re lending it although there is a significant risk that it won’t all get repaid if the Greeks have to ‘restructure’ their debt

  • Mack

    Glencoppagh –

    It’s sensationalist alright – Germany and Greece are the pressure points in the Eurozone right now. I think the emotional response in Germany is telling.

    We’re lending the Greeks money at a rate significantly below market rates.

  • manichaeism

    “Still it’s hard to be too sympathethic to the German taxpayer when one considers that the brutality of the German occupation and the associated famine in which thousands died is still within living memory for many Greeks”.

    I don’t think the present German tax payers had much to do with all that Tochais!

  • Congal Claen

    Greek bonds have just been rated as junk by Standard and Poor. Looks like fan may be about to be hit by large amounts of the brown stuff. And then it’ll be which country next. Probably Portugal. But, then it may hit closer to home…

  • Mack

    But, then it may hit closer to home…

    Probably not until after the general election, but will Clegg have the stomach for it?

  • Alias

    The 30 billion from the ECB is just the start of a bill that will end up at 3 to 4 times that amount.

    Once they throw 30 billion at the Greeks, they’ll have to keep throwing good money after bad. As a 0.92% shareholder of the ECB, Ireland’s Central Bank is throwing 276 million of Irish taxpayers’ money away in the first installment of this bailout (never to be seen again).

    Indeed, even if the Greeks don’t default, the rate paid by the Greeks on the bailout is so low that Ireland will start losing money on it once the rate on Irish government borrowing rises above it.

    That’s political lending aimed at saving a failed political project that could never have succeeded and should never have been attempted (a single currency). This kind of high risk lending is the same reckless financial practice that helped get us all into this mess. Monetary and macroeconomic policies designed for the German and the French palates shouldn’t be forcefed to PIGGS – too rich for their digestive systems.

  • Finbar

    The value of pensions in both Greece and Germany is far higher than a British pensions