BUSINESS

Pension system was not responsible for the crisis, book argues

ROULA SALOUROU

TAGS: Finance, Books

The number of pensioners has increased by about 1 million people during the economic crisis, and the state is now spending 15.5 percent of gross domestic product on covering the deficits of the social security funds, according to a book released by Panteion University professor Savas Robolis and candidate lecturer Vassilis Betsis.

They claim that the application of internal devaluation and austerity policies has hurt the sustainability of the country’s social security system.

From 2010 to 2015, the number of pensioners increased by some 600,000 people, while another 330,000 are still waiting to get their pensions, having submitted their retirement documents by the end of 2015.

Crucially, despite the 45 percent cut in pensions, the level of state expenditure at end-2015 was almost the same as that of 2009. This led the authors to conclude that it is not possible to claim that the social security system and its deficits were the cause of the economic crisis In Greece.

Robolis and Betsis also argue that the continued internal devaluation policies and the aging population will result in an increase in the growth of pension costs by 4 to 5 percent, keeping state spending on pensions at higher levels than that of other eurozone countries.

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