\n<\/p>\n
A new study by the Athens-based Center for Liberal Studies (KEFiM) points to a \u201chidden debt\u201d equivalent to 409% of Greece\u2019s gross domestic product, stemming from pension obligations not accounted for in the Maastricht debt criteria.<\/p>\n
According to Konstantinos Saravakos, KEFiM\u2019s research director and author of the relevant policy paper, the oversight stands in the way of the transition by Greece \u2013 and other European Union member-states \u2013 to a robust capitalized pension system. The study urges that European accounting and fiscal rules facilitate, rather than obstruct, this vital reform.\u00a0<\/p>\n
Greece lags behind other EU countries in developing a strong capitalized pension pillar, resulting in income losses of approximately \u20ac770 per person annually (2022). This deficiency negatively impacts GDP and the pension system\u2019s sustainability.<\/p>\n
The findings of the study are being shared by KEFiM and the Epicenter think tank network with the aim of equipping the new European Commission with vital information as it shapes its 2025\u20132030 policy framework. \u00a0<\/p>\n
Key findings include the following:<\/p>\n
\u2013 In 2018, half of Greece\u2019s pension spending came from general taxation, with the other half funded by contributions. By 2025, this reliance on general taxation is projected to drop to 43%. \u00a0<\/p>\n
\u2013 Despite past reforms, Greece still has the EU\u2019s third-highest pension expenditure as a percentage of GDP. \u00a0<\/p>\n
\u2013 Countries like Iceland and Denmark generated wealth equivalent to 11% of GDP through capitalized pension savings between 2012-2021, compared to zero growth in Greece. \u00a0<\/p>\n
\u2013 Capitalized pension systems in the EU represent 29% of GDP on average, far below the OECD average of 84%. This discrepancy reduces EU GDP by 2.4 percentage points or \u20ac350 billion annually. \u00a0<\/p>\n
European public debt calculations also exclude implicit pension obligations, making cross-country comparisons, particularly with the US, Canada and Australia, challenging. This omission underscores the urgency of addressing pension funding to bolster European competitiveness.<\/p>\n<\/p><\/div>\n