Continued from Part One.

The debt problem in Greece isn’t just a case of unpaid tax, although a higher tax take would obviously assist meeting interest payments. Since joining the EU, the Greek public sector has become bloated out of all proportion to the country’s ability to pay. When allowing for the cost of living, Greek pensions are considerably more generous than Germany’s. A BusinessInsider article lists some differences:

To earn a full pension, workers have to work a minimum of 35 years in Greece, but 45 years in Germany.

As a proportion of wages, German workers receive 46 percent as their pension, in Greece it’s 80 percent.

Although the minimum pension payment in Greece is €450 compared to €600 in Germany, the maximum is €2,538 compared to just €2,100 in Germany, and as stated the cost of living is lower in Greece.

The minimum retirement age for men is similar in both countries, but for women it is 60 in Greece compared to between 65 and 67 in Germany.

The fact is Greeks have rapidly become accustomed to a level of benefits and low or non-existent taxes that the rest of Europe, even immensely wealthier Germany, does not enjoy.

Are the Greeks objecting to belated attempts by George Papandreou’s government to right these wrongs? You bet they are, with riots on the streets and almost daily protests. The burden will likely continue to fall on the few rather than the many, and individually you can’t blame the people for the current state of affairs — successive administrations have allowed this catastrophe to come about. The worry in Berlin, Paris and Brussels is that the pain will be spread much more widely than the benefits ever were.

–Stuart Burns