10 Feb 2010

Move to raise retirement age in Greece

11:53 am on 10 February 2010

The government of Greece intends to raise the national pension age and ban early retirement as it tries to tackle a huge budget deficit.

It is the latest effort aimed at tackling a huge budget deficit and soaring debt, which have led to unions calling a 24-hour strike tonight.

The government wants to raise the average retirement age from 61 to 63 by 2015.

The BBC reports the steps are part of a series of austerity measures aimed at curbing the country's deficit and national debt.

But the moves have angered many unions, which have scheduled strikes in protest. Civil servants are due to walk out on Wednesday.

Farmers have already been protesting for weeks and the country's biggest union, GSEE, is set to hold a mass walk-out on 24 February.

The unions complain the government has bowed to the markets and pressure from the EU.

Reforming the pension system has been outlined by the European Commission as a priority area for Greece as it struggles to save its economy.

System broke in five years - minister

Labour Minister Andreas Loverdos said the pension system would be broke in five years unless changes were made.

Last week, Prime Minister George Papandreou announced a number of austerity measures including a public sector salary freeze and a rise in petrol prices.

Greece is one of several EU countries struggling with a gaping deficit and heavy debt, preventing them from spending their way out of recession.

At 12.7%, Greece's deficit is more than four times higher than eurozone rules allow. The national debt is about 300 billion euros ($US419 billion).