Almost one in five Greek citizens, about 2 million people, live in poverty, despite -45 billion (26.3 percent of GDP) being spent annually on all sorts of social benefits to the poor. The data, made public yesterday by Economy and Finance Minister Giorgos Alogoskoufis, is a demonstration of the bankruptcy of the the so-called welfare state, which is incapable of living up to its designated role, despite the massive funds it absorbs. Alogoskoufis said there was a need to redistribute the funds and adopt more targeted policies, so that the money provided benefits to the poor. He also announced that so-called «social spending» will increase by 1 percent of GDP, or -2 billion over the next five years. Alogoskoufis also presented a report by the National Statistics Service (NSS), which uses 2004 data to outline the problem of poverty and the resulting social exclusion. Of great interest are the data showing the impact of welfare spending in Greece and the European Union (at least its 15 pre-2004 members). Excluding welfare payments, the people living below the poverty level in the old 15 EU members accounted for 26 percent of the population, versus 23 percent in Greece. When the payments are included, the number of poor in Greece dropped to 20 percent of the population, while in Europe it dropped to 17 percent. Alogoskoufis plans to meet over the next few days with the health and employment ministers for a discussion of existing social policies and the drafting of a plan to combat poverty. Alogoskoufis said poverty was an issue that has always concerned Greece and not one to be used, or misused, for political purposes. He added that the increases in payments to the poor, farmers’ pensions and employment benefits announced for 2007 would help to alleviate poverty. The NSS study put the poverty threshold, in 2004, at -5,649.78 for single persons and at -11,864.54 for a family with two dependent children. Under this definition, a total of 832,456 households, or 2,088,701 people (19.6 percent of the population), were living in poverty in 2004. Women are slightly more vulnerable to poverty than men (20.9 percent versus 18.3 percent), as are older people: Of those over 65, 27.9 percent live in poverty. Vasso Papandreou, a former Socialist minister and opposition spokeswoman on economic affairs made the following statement: «During the three years of New Democracy rule, working people have been paying more taxes while corporate profits are more lightly taxed.» «Concerning the welfare state, Mr Alogoskoufis cannot hide the reduction, in real terms, of spending… (and) the shrinking or outright abolition of programs the Socialist government had adopted (home assistance, all-day schools, etc).» «Between September 2003 and September 2006, the cost of living for an average family increased 26.8 percent, while income increased 14.4 percent. This translates into an additional burden of -245 per month.» «Now the government is promising to increase social spending by 1 percent of GDP over the next five years. Let’s hope this increase is not something like the GDP revision through which the government attempted to make Greeks 25 percent richer overnight,» she said. Greek private wealth outstrips public assets Greek net private wealth represents 0.5 percent of the world’s total, and amounts to $72,825 per capita, with gross income per capita amounting to $15,559, according to a report by the Helsinki-based International Institute for Economic Development. The report defines net wealth as the total value of all assets (including realty) minus debts. Greek households’ liquid assets represent 44 percent of the total. The report, which is based on a study by Canada’s Western Ontario University, estimates that the world’s richest 1 percent of adults (all residents of Europe and the USA) own more than 40 percent of global wealth. The richest 10 percent own 85 percent of the global total, while the poorest 50 percent own about just 1 percent. According to Greek data, the total value of realty assets owned by Greek households amounts to 1,265 billion euros, or 650 percent of gross domestic product. The value of private realty has risen about 20 percent in the last five years and is about four times the value of all public assets. Public asset value is estimated to total 300-400 billion euros. This does not include properties which cannot be valued, such as archaeological sites and monuments. Other studies, which have been occasionally used by the Bank of Greece, estimate the realty assets of Greek households at around 800-900 million euros.