«Basic facts on Poverty in Greece and the Pilot Minimum Income Scheme»

Maria Marinakou, Ioanna Pertsinidou,Dimitra Soulele

EMIN Coordination Team

Athens, 17-10-2014

Based on the data of the National Statistical Agency ( ELSTAT July and September 2014 referring to levels at 2012-2013 ):

Greece is among the group of countries with the highest poverty (23.1%)

Greece is on the fourth place among the 28 countries with the highest proportion of people at risk of poverty and social exclusion (34.6%) behind Bulgaria (49.3%), Romania (41.7%) and Latvia (36, 2%).

In other EU countries, which have been implicated in Memoranda with the Troika, at risk of poverty and social exclusion is 29,4% in Ireland (2011), 27.1% in Cyprus and 25.3% in Portugal (2012). For the other Southern member Spain, is 28,2%.

In Greece, 2.5 million people are below the threshold of relative poverty by the medium household income (60%). Overall, more than 1/3 of the population (11 m), 3.8 million people are at risk of poverty due to material deprivation and unemployment.

Poverty in Greece_1

Poverty in Greece_2

EU 2020 poverty indicators (ELSTAT 2014)

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Poverty in Greece_2

• Based on the index on relative the poverty which measures the percentage of population with income below 60% of median equivalent disposable income, in 2013 the poverty line was 432 euros a month for one person and 908 euros for a family of four.

Based on the index referred to extreme poverty and can be determined by the cost of the basic basket of goods for a minimum level of decent living, for Attica in 2013 for a household without expenses such as mortgage or rent, is 233 euros per person and 684 euros for a family of four. (cited in M.Matsanganis (2014), "Poverty and Public Policy in Greece in Crisis")

• Child poverty in 2012 was 26.5% Th. Mitrakos (2014), "Fiscal consolidation: The current experience of the economic crisis"

• 31,3% reduction in households with central heating (2013-2014), ELSTAT, 2014

Percentage of poverty in households with low work intensitywith or without dependent children

Source : EUROSTAT, 2013, M. Hletsos. November 2013, ΕΙΕΑΔ

Comparison of EU-27and 15 and Greece. Greece in light blue with and in light brown without dependent children

Based on the Strategy "Europe 2020" the Greek National Reform Plan submitted by the Greek government in 2012 targeted that until 2020 400,000 people of whom 100,000 children, will get out of poverty!

Poverty in Greece_3

7Source: European Commission (2013)

• The percentage of people who say they can not afford basic food costs has doubled since 2009 (ELSTAT, 2014)

• It is estimated that more than 150.000 young people, mainly university graduates, have emigrated since 2010

Poverty in Greece_4

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Poverty and Unemployment, ELTAT 2014

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• During the second quarter of 2014 the unemployment rate was 26.6%, versus 27.8% in the previous quarter and 27.3% in the corresponding quarter of 2013.

• The number of unemployed reached 1,280,101 now hitting also heads of households, ie. working men in the productive age.

• Unemployment among young people aged 15-24 reached 52%, while many workless households are lacking basic amenities.

• At the same time there was a dramatic decrease in earnings, and the minimum wage is now below the level of 2000.

Medium monthly household spending 2009-2013_Long –term uneployed.

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Minimum Guaranteed Income_ pilot scheme

Based on the 4093 Law of 2012 the introduction of the minimum income in Greece aims to create a safety net for those who are at risk of extreme poverty by meeting basic living needs in the form of financial assistance and services (social support, activation ).

This was part of the 2nd Memorandum agreed with Troika and voted in the Greek parliament in the Medium Term Fiscal Strategy 2013-2016Law 4093/12 (ΦΕΚ 222 Α/12-11-2012)

Greek Pilot Minimum Income Scheme_1

Greek Pilot Minimum Quarandeed Income Scheme_2

• 13 municipalities will implement the pilot scheme.

• We have no information on the initial number of beneficiaries (for the pilot).

• The cost is estimated at 30 million • The full implementation is expected to

reach 700,000 people at extreme poverty (around 7% of the total population), at a total cost of 850 million to 1 billion.

• It will be extended throughout the country in 2015.

• Existing benefits will be merged with the guaranteed minimum income scheme

Source: Ministerial Press Conference, 14.10.2014.

Beneficiaries- Benefit levels according to household composition

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Additional in kind Provisions

These provisions are to be additionally given to MGI beneficiaries*

• Heating Allowance• Reduced costs for electricity bills• Health coverage• Employment oriented training programs• Social Care programs for homeless

• The payment of the Guaranteed Minimum Income will be suspended if the holder is away from Greece more than two months, unless the removal is due to health reasons or if the beneficiary refuses to work in a particular job by the Employment Agency.

* Media Announcements, Sep-Oct 2014

• Lack of a comprehensive system of social care (fragmentation). • Social policy measures mainly characterized by "emergency" without

evidence based planning. This leads to the concept of social welfare "as a crisis management system."

• Lack of synergies• Operational challenges

• The table refers to the percentage of impact to poverty reduction after social transfers. Comparison with EU 27, EU15, Greece, Spain, Italy, Portugal

Challenges for the MIS in Greece_1

Source: European Commission (2013). Social Europe. Current challenges and the way forward. Annual Report at the Social Protection Committee, Brussels.

• Targeting only extreme poverty, leaves a huge percentage of the population that is either on poverty or at risk of poverty uncovered. (only 7% of the population at extreme poverty will be covered in the full implementation of the scheme).

• For the working poor (Greece is well above the EU average), coverage is non-existent, the same applies for the huge number of indebted households.

• In recent years the local government reform, the Kallikratis program, transferred responsibilities for implementing social policies to local authorities, but without the necessary financial resources and with declining staff levels. _ The budget cuts under the austerity measures had a profound impact on the ability of the LA to provide social services despite the increasing demand _ Reduction of human resources in the LA, massive early retirements.

• The crisis had a significant impact in reducing capacity of the civil society organizations

For further analysis on the challenges and EAPN Greece positions see the attached Press Release

Challenges for the MIS in Greece_2