This atypical election period we are living through has its… good things!
It gives us the opportunity to see – and understand – what ruthless populism and shameless propaganda mean.
- Here is a very typical example: Which involves both the government and the new Tsipras Party . And it concerns pensions .
— #Tsipras asks the government to provide a 13th pension .
— The #government replies that it already gives… half of the 13th pension . And it cannot give the rest now, because it will have a huge fiscal cost .
— Tsipras replies that during his time , pensions were not reduced any more .
— And the government responds that during its tenure , real increases in pensions were given for the first time since 2009.
Who is telling the truth…
Both rely on real evidence .
Both are telling HALF truths .
Both distort the #Truth .
Both are involved in skirmishes that they conceal
and what has happened so far ,
and what’s happening now ,
and what needs to be done from here on out … - Let’s start from the beginning:
— First, the government is actually giving nominal increases in pensions for the first time. After 2023, when inflation started to rise.
But the increases it gives lag behind inflation .
In fact, every year it gives increases: half of inflation PLUS half of real growth .
What this means: If inflation runs faster than real growth then real pensions are constantly losing purchasing power – and the losses grow year after year.
And this is exactly what happened after 2023: pensions – despite the “increases” – decreased in purchasing power !
— Do you want the receipt?
The average annual real pension in 2009 prices was 13,100 euros .
Today, if we take inflation into account, the real average annual pension is 10,730 euros . AFTER the increases – and despite the nominal increases!
In other words, if the average pensioner received a real income of 100 in 2009, and in 2019 he received 85 , today – after the increases – he receives 82 !
— When cuts were made (between 2010-12), nominal and real pensions were reduced.
— When there was no inflation in the following years, despite the fact that no nominal increases were given, real pensions remained stagnant .
— And when inflation started to run rampant and increases were given that were lower than inflation, the real earnings of retirees decreased even more …
But this truth does NOT come out … - And she is not the only one. The government and its paramours claim that in addition to the “obvious” pensions , the government is giving the “November allowance” equal to “half a pension” . So half of Tsipras’ request has already been satisfied, she says…
The truth is that the government gave a 300 euro allowance , and this covers about a third – not half – of the 13th pension . And it does not restore the new further reductions in the purchasing power of pensioners (apart from not restoring the losses of purchasing power that have already occurred…) - The government also claims that the 13th pension will burden the Budget with 2.7 billion.
This is not accurate…
The accounting increase in the pension fund is somewhat smaller: 2.5 billion .
But because it already gives one third as an extraordinary allowance, the initial burden on the budget is reduced by this amount (which is already given). That is, it is reduced by about a quarter (because not all pensioners receive the allowance). That is, accounting for around 1.9 billion. Already 800 million less than what it “costs” .
But because there is also “recovery” – that is, the additional income of retirees is spent, it has multiplier effects on GDP ,
broadens the tax base and brings in additional tax revenues (from VAT , etc.), the actual fiscal cost after the “recovery” (based on conventional assumptions) is around 1.35 billion .
That is, HALF of what the government estimates. - Let’s now turn to Tsipras ‘ allegations.
He says that during his time, pensions were only slightly reduced.
He forgets a small “detail” . The Katrougalos law.
Who greatly cut new pensions after 2016, but pledged to cut older pensions as well – cuts that the Troika estimated at a total fiscal “benefit” of 1 billion at the time!
But in 2019, it was agreed with the lenders that these “cuts” of old pensions would be made… in the future!
That is, in any future increase in pensions, old pensioners should NOT receive more money , but the “increases” they will receive in the future should be “absorbed ” by the size of the cuts that were NOT made to them until 2019 due to the Katrougalos Law.
These are the infamous “personal difference” !
Who is still chasing those who retired before 2016.
And so “old” pensioners get “accounting increases” after 2022, but they don’t get more money!
They “owe” them for the cuts that were NOT made between 2016 and 2019.
Until their “personal difference” is fully absorbed – which will take another two or three years – old pensioners will remain without salary increases.
And this was also a consequence of the Katrougalos Law – which was passed under Tsipras.
and the personal difference , which was agreed upon under Tsipras, but “hits” pensioners after Tsipras.
You just saw what populist propaganda means from two sides , not just one.
Both the government and Tsipras are trying to win the “favor” of pensioners , telling half-truths and outright lies , while pensioners are (despite the “increases” and “benefits” ) in a worse position than they have been in the last 15 years .
Amidst these “crossfires” of populist propaganda on both sides, what is NOT being said :
— From 2009 to 2025 , for 15 years , after so many hardships, reforms, counter-reforms, memoranda that were implemented, memoranda that were not implemented, and inflows of funds from the Recovery Fund (in the last three years), the structure of the Greek economy did NOT change :
Total income from wages was in 2009: 35.6% of GDP .
And in 2025 it is 36.2% of GDP
Total income of pensioners: in 2009: 13.2%: of GDP
And in 2025 13.3% of GDP
The total purchasing power of workers and retirees
in 2009 it was: 48.8% of GDP
and in 2025: 49.5% of GDP .
And the most amazing thing.
Nominal GDP in 2009 was 237.5 billion.
And the nominal GDP in 2024 is: 248.5 billion.
But in the meantime prices rose by about 19% (cumulative GDP deflator).
So in 2009 prices, our real GDP is 209 billion, which is 13% lower than what we were in 2009.
Meanwhile, the burden on the economy from the State ( taxes and contributions ) has increased from approximately 35% in 2009 to 41% today .
And all of this explains how and why Greece, where in 2009 it was slightly below the average in real disposable income per capita in the overall ranking of the European Union, today shares last place with Bulgaria !
Why did real income decrease , and the tax burden increase?
and the structure of the economy did NOT change …
What is NOT being said now – by anyone:
— That the pension issue will never be solved unless the real growth of GDP is accelerated – and over time, not just when extraordinary funds flow in from outside ( Recovery Fund ) – the economic dimension.
— That the pension system will never be solved unless labor productivity and the competitiveness of the economy – the productive dimension – increase.
— That the pension problem will never be solved unless the employee/pensioner ratio improves – the demographic dimension .
In other words, so that we don’t work:
The real problem with pensions is not accounting .
It is developmental , productive and demographic .
- And what is also not said:
It is that labor productivity is also stagnating or declining.
and the competitiveness of the economy is also declining
and the demographics are constantly worsening.
And all this is not solved by giving the… 13th pension !
Which may, indeed, constitute a relief – however, at a much smaller fiscal cost than the government claims – but which leaves the structural problem unresolved .
But that’s why no one seems to care…
So you have seen how ruthless propaganda and unrestrained populism do not only distort reality.
They also hide the Truth .
And they thwart any meaningful public debate …
THANASSIS K.
