ATHENS – With more deaths than births for years, Greece’s shrinking population will make it difficult to keep funding future social security benefits and cut into the tax base.
The news site Al Jazeera noted the dilemma about the population declining since the turn of the century that got worse during Greece’s 2010-18 economic and austerity crisis.
That saw people shying away from raising families as they dealt with the financial fallout of big pay cuts, tax hikes, slashed pensions, firings and fears for their own future.
Greece’s birth rate fell by 30 percent from 2011 to 2021 to under 84,000 per year, falling even further below the death rate, according to the Hellenic Statistical Service, the report by John Psaropoulos noted.
The cumulative population loss during that decade was 329,451, which roughly tallies with the 2021 census recording a 3.1 percent population drop, added the piece about the trend.
With each Greek on average paying 5,758 euros ($6,125) in taxes and social security contributions in 2022, the fall represents a loss of nearly 2 billion euros ($2.13 billion) a year in revenues, about 3.2 percent in the long run.
state revenue – about 3.2 percent – over the long term.
The report noted that financial analysts said that means by 2050 that Greece may not be able to keep funding government services which now are about 60 billion euros ($63.22 billion) or afford a military.
The falling birth rate also means that Greece is aging and graying fast, and that only 4.2 million of the population of 10.5 million are working, the problem exacerbated by a high rate of tax evasion.
The ruling New Democracy has begun Greece’s first capitalized social security scheme for those under 25, with pensioners now receiving benefits seeing them paid by current contributions, not their own over the years.
Hoping to reverse the trend, Prime Minister Kyriakos Mitsotakis’ administration earlier launched a program to pay bonuses to people having children although many remain reluctant with the high cost of living.
It also reduced the income tax although it’s 36 percent for what would be considered the middle class and 40 percent for those making 60,000-100,000 euros ($63,224-$105,374) a year.
Families will get a handout of 2,000 euros ($2,107) per child and the tax rebate for families was raised to 1,000 euros ($1,054) as he promised to raise salaries from 1,170 euros ($1,233) to 1,500 euros ($1581) monthly.
Births increased by 1.2 percent in 2020 during the COVID-19 pandemic that saw people largely confined to their homes and by 0.7 percent in 2021 as it waned, bringing some hope it will continue and increase.