GREECE: More Poverty Than Meets the Eye

By Apostolis Fotiadis Reprint | | Print |

Apostolis Fotiadis

ATHENS, Nov 13 2007 (IPS) - A third of Greeks live close to the poverty line or under, a new survey has found. The poverty limit is drawn at an income of 470 euros a month per adult.

The survey conducted last month by Kapa Research, a surveys company, and The London School of Economics on behalf of the ministry of economy found that poverty has begun to threaten social cohesion.

The survey says that slowly but steadily a ‘third world’ is being created inside Greece, an EU member state with a population of 11 million.

“Political choices of the last ten years have greatly contributed to this,” Alekos Kalivis, deputy secretary of the General Union of Workers in Greece (GSEE) told IPS.

Unemployment, a heavy pensions bill, and deregulation of the labour market have widened poverty zones, and hit particularly the younger and the older people, he said. “On top of this, the safety net provided by the welfare state is rapidly disappearing, making it impossible to alleviate social inequalities.”

According to the GSEE, there are 832,456 poor households in the country, which adds up to 2,088,000 persons (the most recent numbers are from 2005). The National Statistics Agency figures the population in 2007 at 11,171,740.

Besides, over the last ten years many Greek families have fallen into a new kind of poverty, developing dependency on easy credit from an aggressive banking system.

“Five hundred thousand households pay more than half their income to cover their debt,” says lawyer Melina Mouzouraki. Many other families with relatively large income, and thus far above the official poverty limit, pay huge amounts for covering their debt. The report says this puts them in extreme financial difficulties and close to net poverty even though they are not officially considered poor.

In a rapidly ageing and indebted society that consumes many times more than it produces, Greeks borrow more than 40 million euros per day.

Debt contributes to a general feeling of social insecurity. According to the Kapa Research report 60 percent of Greeks live with the fear that they might one day fall under the poverty limit and become dependent on a problematic welfare system.

Spending on welfare is not marginal in Greece – 26 percent of the national income is dedicated to welfare and poverty reduction (the European average is 27.3 percent). But more than 90 percent of this goes into paying pensions.

“The social welfare system in Greece functions in a rudimentary way,” Kostadinos Dimoulas, a political scientist and expert on social exclusion issues told IPS. “There is no strategy for fighting poverty; the focus is on mitigating its effects. Social exclusion is not studied systematically, so leaders do not really know the nature of the problem.”

In Europe state intervention through welfare spending reduces poverty on average from 25 percent to 17 percent. In Greece similar efforts result in only one percent improvement. State welfare spending is up to European standards, but clearly inefficient in helping people out of poverty.

Many of the migrants who live in the country are rarely included in any of these calculations.

“We are concerned about the poor results of welfare spending in helping people escape poverty, and we take this into account,” Dimitris Kodos, secretary of the ministry of employment and social protection told IPS. “Still, since 2004 the growth plan of the government has significantly reduced unemployment and the percentage of poverty.

“The creation of the Social Cohesion Fund, transformation of the National Health System, studies in introduction of the lowest national pension, the debate for reform of the insurance system are all indications of a coherent strategy for fighting poverty and helping the weakest to integrate. Statistics will vindicate these policies in the near future.”

Dimoulas and Kalivis disagree with this view. “The Social Cohesion Fund, (a special fund under planning dedicated to fighting poverty which will begin with an amount of 100 million euro and continue with 500 million euro every following year), like many other similar mechanisms, will be inefficient due to the ignorance of the government about the size and nature of the problem,” Dimoulas said.

Kalivis says that government reforms will only worsen things and place more burdens on traditional structures that maintain social peace and cohesion.

“It is the family that works today as an informal welfare state, and absorbs social shocks. The results of these policies will accentuate pressure on the already declining social solidarity, and change the character of society to a more individualistic one. This will mostly harm the weakest.”

Twenty percent of children are today threatened by poverty and social exclusion. But the 2007 report from Eurochild, a European Commission funded network of organisations and individuals working across Europe to improve conditions for children and young people, says that tackling child poverty and social exclusion and ensuring a decent standard of living for all children seems not to be a priority in Greece.