Catastrophe: A Greek Pension Tragedy in Three Diagrams

Catastrophe is a Greek word. It is especially apt for the  Greek pension system. That never achieved sustainability; it  increased poverty and inequality, but  gave little security at old age.   Even so, it managed to bankrupt the country and to undermine two bailout programmes from 2010 to 2014. In 2016 it was poised to derail the third.

Reform proposals in 2016 were structured around implementing common rules. Consolidation was to operate in three dimensions: Across generations, across occupational categories (i.e. between wage employees and the rest) and in administrative structures.  Those  proposals repeated the key idea of a  detailed 1957 policy paper, written by the mother of an Economy Minister of the late 1990s: “There is urgent need of a system … free of the unacceptable position that its objective is to secure privileges of the few against the many, which will use the available means to meet needs”.  (quoted in Tinios 2010).
That blueprint, also built around consolidation, was to have been implemented in 1958. However, the impending elections postponed it. The same reform was also postponed in the following decades:

• In 1968 due to the dictatorship.
• In 1978 due to inflation.
• In 1988 the reform was leaked to the press and then abandoned.
• In 1998 the ‘Spraos report’ provoked hostile reactions.
• In 2008 a cosmetic law could not avert bankruptcy a year later.
• In 2018 is the prospective date of full implementation  of the 2016 proposals.

Why has the performance of the Greek pension system been so bad for so long? Why is it so hard to bring it under control?  What is the role of pensions in the dynamics of the crisis since 2010?