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 –

GreeceGermany
Years of work to earn full pension:3545
Proportion of wages as pension:80 %*46 %
Number of pension payments a year:14 x12 x
Pension increase 2004:3 %0 %
Pension increase 2005:4 %0 %
Pension increase 2006**:4 %0 %
Minimum payment (Euros):445ca. 600
Maximum payment (Euros):2538ca. 2100
Minimum pension age for men:6565–67
Minimum pension age for women:6065–67
Average pension entrance age:62,463,2
* 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.

No bio, some books worth reading – The Rational Optimist: How Prosperity Evolves – Matt Ridley .

Crisis Economics: A Crash Course in the Future of Finance -Nouriel Roubini, Stephen Mihm