GREEKS are on the streets protesting against pension reforms. This is hardly unusual: pensions were at the centre of bail-out negotiations six years ago and they were there in the summer when Greece nearly got kicked out of the eurozone. Since 2010 entitlements have been cut at least ten times while the system has been reformed at least four. With a new scheme now in the works, which would protect those who have already retired while increasing social security and tax payments for many groups of workers, Greeks are once again blaming politicians, while politicians are blaming Greece’s creditors for making them impose harsh measures.

There have been calls for reform of Greece's pension system since the 1980s when worries arose about the mass retirement of baby boomers coinciding with a working generation with falling birth rates. The problem of an ageing population was not unique to Greece. But while other European countries, like Sweden, carried out reforms in the 1990s, Greece held on to its ill-structured system. Entitlements were calculated by an array of special regulations that varied not only among the numerous different funds but also among workers belonging to distinct groups within the same fund. Factors like age, gender and union membership made the system discriminatory: some got a lot while contributing little; some got little despite paying a lot. The most successful attempt to change the regime came in the early 1990s, but it only managed to scratch the surface. Strong unions, professional associations and some sectors resisted any change that would deprive them of special treatment and politicians gave in to save their seats. After 1992, pensions were not matched by contribution increases, says professor Platon Tinios of the University of Piraeus; they became reliant on state grants that were financed by external borrowing.



The fear of harsh bail-out reforms in 2010 sent people rushing to early retirement to take advantage of pre-crisis favourable terms before they expired. As Greece's workforce along with its gross domestic product (GDP) shrank, the number of pensioners grew. By 2015 there were 3.6 million workers and 2.7m pensioners —25% of those who retired at the time were below the age of 55 while the retirement age was set to 67, says professor Manos Matsaganis of Athens University of Economics and Business. Then in 2012 the country's pension funds lost an estimated €25 billion ($28 billion) of reserves held in government bonds as a result of a debt restructuring. Unemployment was above 20% and external borrowing was no longer available to cover the ever-growing deficit. Consecutive pension cuts of between 14% and 40% followed.