The consequences of Greece’s current debt situation best be
framed in a simple demographic analysis. Greece currently contains a population
of about 11 million, 20% of which is over 65 (well above retirement age). Early
retirement is set at age 50 for women and 55 for men--this is reserved for
“hazardous” job holders. This adjective is applied to 580 job categories,
ranging from those characterized by real hazards (mining, SWAT team) to those
that are… somewhat less dangerous (hairdressers, wind instrument musicians, TV
and radio broadcasters). On top of that, workers in the public sector--25% of
the working population--can retire after 35 years of service with 80% salary,
which in some cases means around the age of 55. Therefore, the average age of
retirement in Greece is 61, and the average employee enjoys around a 96%
pension which, given an average PPP-framed salary of $32,000, results in
roughly $30,700 in pensions, per retiree, per year.
Because
of a combination of high life expectancy (79 years average) and low birth rates
of the region, partly caused by urbanization and partly by bizarre governmental
incentives not to marry (if a woman marries, she loses her family’s pension) the
population pyramid of Greece is projected to turn upside-down by 2050. Currently,
20% of the population is of retirement age and there are 1.7 workers per
pensioner. If the trend continues unaltered, by 2050 as much as 40% of the entire population will be eligible for
retirement, meaning that every employed Greek will be responsible for taking
care of himself, his family and as many as two retired citizens.
All of this leads to one word: debt. With a capital D. Greece’s debt is currently
125% of its GDP, placing it at the head of the PIGS (Portugal, Italy/Ireland,
Greece, Spain), or the aptly-named bloated economies that serve as the leading
cause of migraines and heart failure for German and French political
leaders. To recover from this mess, the
EU is installing austerity packages--cutting salaries (33% of the entire public
wage bill), retirement funds and social benefits that have ballooned out of
control by a century of favor-buying on a national scale. However, these
packages have already led to 200,000 lost jobs, with another estimated 150,000
to be cut by 2015. Greece could suffer from as much as a 20% unemployment rate,
with few natural resources and an unstable shell of a service economy. When coupled with its incoming demographic
winter, a very, very grim picture is painted of the future of the fount of
Democracy.
let's not leave out how legalized abortion has contributed to so many problems in both Greece and the United States!!
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