ECONOMY

The fight against poverty

The government is undertaking new initiatives to combat poverty and tax evasion, Economy and Finance Minister Giorgos Alogoskoufis announced yesterday. During a visit to the offices of the National Statistics Service (NSS), Alogoskoufis said a survey is to be published in the next few days which will show the level of poverty in this country as well as the ineffectiveness of the state in dealing with the problem over time. The survey, Alogoskoufis said, will be followed up by specific measures for the greater provision of welfare assistance to those with the lowest incomes. «While the level of spending on the welfare state is on average where it is in the other member states of the European Union, its effectiveness in dealing with poverty is not what it should be. This is something that should worry us all,» he said. Prime Minister Costas Karamanlis has repeatedly stated that fiscal stability, growth and competitiveness on the one side and social cohesion and solidarity on the other are his governments equal and parallel targets. Two million Greeks are estimated to be living under the poverty line, as defined internationally, which in the case of Greece stands at an income of up to -5,650 per year. The government is studying a number of issues. Social expenditure (including pensions) in Greece amount to 26 percent of the gross domestic product, when in the EU-25 the average stands at 27.3 percent and in the EU-15 at 27.6 percent. The problem for this country, however, is that even though the state spends significant amounts of money on its citizens in need, given Greece’s potential, the benefit to them is small, as poverty data show. In the UK, before state support, 29 percent of people fell below the poverty line, and after state support this came to just 18 percent. In Germany the ratio of those below the poverty line went from 24 to 16 percent and in France, from 26 percent to 14 percent. Overall in the EU-25, on average, a percentage of 26 percent of citizens living below the poverty line fell to 16 percent after assistance. Compared to that, in Greece the ratio is 23 percent and falls only to 21 percent. Waste Considerable amounts of money originally allocated for social solidarity are wasted on bureaucracy or do not reach those in need. For example, apart from those for the unemployed or for mothers with many children, there are no other benefits in Greece; what poor citizens require is this additional money to augment their insufficient incomes. Alogoskoufis will not only focus on the restructuring of social spending to ensure more money reaches the poorest; he is also considering stretching the budget to increase social expenditures through healthy resources such as additional public revenues from combating tax evasion and beating illegal fuel trading. The minister also said he is preparing a major campaign against tax evasion, calling for everyone’s assistance in this effort. A new survey at his disposal shows that citizens do not believe tax evasion can be tackled via police measures, believing instead that the state ought to provide citizens with incentives to become more active in the battle against tax evasion, asking for receipts for every purchase or expenditure. You cannot have an inspector for every salesman, unless the customer himself becomes the inspector, says Alogoskoufis. The additional revision of the GDP has shown that we have a national income that is 25 percent more of what the NSS had calculated. Yet our revenues only grew by 9 percent, which shows that the phenomenon of tax evasion grows and grows, while, particularly in liquid fuel, it has gone beyond any possible control.