The rapid rise of Greece’s nouveaux pauvres

By Sotiris Nikas

Almost 400,000 people are believed to have dropped below the poverty line within one year during the country’s financial crisis: In 2011, the number of Greeks living in conditions of poverty or social exclusion reached 3.403 million – up from 3.031 million in 2010, according to Hellenic Statistical Authority (ELSTAT) figures.

In total, the share of the population considered to be living in poverty amounted to 21.4 percent in 2011, up from 20.1 percent a year earlier.

The poverty line for 2011 was set at an annual income of 5,951 euros, while the respective threshold for 2010 was higher, at 7,178 euros. The population living in households with low labor intensity grew from 619,000 in 2010 to 979,000 in 2011.

The data, released on Tuesday, reveal the consequences of a year and a half of implementation of austerity measures agreed to by Greece with its international creditors. Given that last year saw the application of measures that have led to the continued shrinking of disposable incomes, the poverty figures for 2012 are expected to be even higher.

More worrying is the fact that the social benefits system in Greece appears unable to rectify the situation much: ELSTAT figures show that when benefits are not taken into account, the share of the population below the poverty line in 2011 was at 24.8 percent. This figure drops to 22.9 percent after including benefits, which do not include pensions.

Another point that generates concern is that the share of people who spent 2011 without covering a number of basic needs grew to 28.4 percent, from 24.1 percent in 2010. That means that almost two in every seven people could not afford any four of the following nine costs:

- Payment of fixed bills, such as rent or mortgage payments, utility bills, credit card or homeware repayment installments etc.

- A one-week vacation.

- Food including either chicken or meat or fish or vegetables of similar nutritional value at least every other day.

- Extraordinary but necessary spending amounting to about 540 euros.

- A telephone (including a cell phone).

- A color television.

- A washing machine.

- A private car.

- Satisfactory heating.

Women appear to be more susceptible to poverty than men. According to ELSTAT data, the leap to poverty has become more common among women, with their rate climbing from 16.8 percent in 2010 to 23.5 percent in 2011. Among men the 15.7 percent rate in 2010 soared to 22.4 percent in 2011. Single-parent families were the worst off, as their poverty rate amounted to 43.2 percent in 2011, from 33.4 percent in 2010.

Greek households have suffered the biggest income reduction in the European Union over the course of the crisis period, according to a report by the European Commission.

In the 2008-11 period, households in Greece lost about 17 percent of their disposable income, which is more that of Spanish households (8 percent) and far bigger than those of Cyprus (7 percent) and Ireland (5 percent).

Poverty is bolstered considerably by the rising level of unemployment, which in September amounted to 26 percent in Greece, according to European Commission figures, second only to Spain’s 26.6 percent rate in the eurozone.