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European Union Leaders Hold Last-Minute Talks To Keep Greece From Default

MELISSA BLOCK, HOST:

Europeans are watching a suspense movie they've seen before, last-minute negotiations to keep Greece from default. The Greek government must pay back a bailout loan by the end of the month, but it hasn't got the cash. It's looking more likely that Greece will leave Europe's currency club with a possible return to the drachma. Depositors are fast withdrawing Euros from Greek banks. Still, Greece refuses to reform its pension system as creditors are demanding. Joanna Kakissis in Athens explains why.

YIORGIA FLOROU: (Speaking Greek).

JOANNA KAKISSIS, BYLINE: Yiorgia Florou is a 62-year-old retired nurse. She draws a pension of about $800 a month. Her husband, Thodoris, a retired policeman, gets about $1,300. For the past three years, they have sent nearly all of their pension money to the families of their two married daughters, both of whom lost their businesses in the current recession.

FLOROU: (Speaking Greek, through interpreter) We pay for their electricity bills, their tax bills, their groceries. We give the most, but their husbands' parents also help. Even their grandmother helps.

KAKISSIS: These days, it seems to be the only way people can survive, Florou says.

FLOROU: (Speaking Greek, through interpreter) There are more pensioners in Greece right now than workers, and many of the workers are unemployed. So if they cut pensions, what's going to happen? Will their kids be forced to become robbers? Will they commit suicide? That's where it seems to be headed.

KAKISSIS: This is why Prime Minister Alexis Tsipras says he cannot back down on cutting pensions. He says he does not want to hit an already devastated republic. But the Greek pension system has been troubled for decades. It's the most costly in Europe, and, says economist Platon Tinios, one of the most complex.

PLANTON TINIOS: It was a very detailed and very complex picture, which allowed the lucky few to get a very good deal financed essentially by everyone else.

KAKISSIS: Tinios studied the system back in 1997, and he knew then it was headed for bankruptcy.

Did anybody listen to you back then?

TINIOS: I know people listened but then turned their backs (laughter) and did nothing. So pensions was one of the areas which was responsible for the increase in borrowing and the buildup of debt.

KAKISSIS: The system had too many exceptions. Hairdressers, miners, mothers with under-aged children and civil servants could retire early. Florou, the nurse, retired at 43 after working at a public hospital. Her husband retired at 49.

FLOROU: (Through interpreter) I used to travel all over Europe. I saw people who were 60, 65 years old and they were still working. Then I knew something was wrong with our system.

KAKISSIS: Since Greece was forced to reform under the 2010 bailout deal, there have been changes to the pension system. The required retirement age is now 67, up from 60 for women and 65 for men, with no exceptions. But people in their 50s who are nearing retirement age were shielded.

(SOUNDBITE OF DEMONSTRATION)

KAKISSIS: Now, the country seems headed for default and a possible Euro zone exit over the issue. And that's scaring people like Vassilis Karkatzis, a lawyer who was one of thousands who attended a pro-euro rally outside Parliament on Thursday.

VASSILIS KARKATZIS: The right thing is to stay in Europe and to reform this county, because if we are out of Europe, in Europe - doesn't matter. We have to change.

KAKISSIS: To make one last-ditch effort to keep Greece in the single currency, European Union leaders will be meeting on Monday in Brussels. For NPR News, I'm Joanna Kakissis in Athens. Transcript provided by NPR, Copyright NPR.

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