Inefficient Greek social spending

Two in 10 Greeks are living below the poverty level, partly due to serious shortcomings in the distribution of social spending, a study for 2006 has confirmed. According to the report, «The Social Profile of Greece, 2006,» prepared by the National Center for Social Research (EKKE), 20 percent of the country’s population live on incomes less than 60 percent of the national average. The study found that only 47 percent of social spending went to those below the poverty level, with inefficient distribution across the spectrum of social services. It recommends better planning in the management of resources and a strengthening of the role of local government in the provision of services, from preventive medicine and dealing with learning disabilities to careers advice and promotion of employment. «A drastic change is required, perhaps no so much at the level of funding as in the allocation and management of financial resources,» said EKKE’s director of the Institute of Social Policy, Ioannis Sakellis. Ilias Kikilias, a researcher at the institute, told Kathimerini that although social spending in Greece as a percentage of gross domestic product (GDP) had reached the EU-15 average in recent years, the effectiveness of social protection policies lags considerably behind the other countries. In particular, the study reports that without any social spending Greece’s poverty level would be exactly equal to the EU-15 average, at 39 percent. If only pensions were provided, the poverty rate in Greece would be slightly lower than the EU-15 average (23 percent against 24 percent). But after the distribution of social benefits, Greece’s poverty rate is five percentage points higher (20 percent against 15 percent), among the highest in Europe. «Overall, social spending reduces Greece’s poverty level by 19 percentage points, while the corresponding rate for the rest of EU-15 is 24 percent,» says Kikilias. «The largest chunk, about 1.5 billion of the 2.7 billion euros of social spending on benefits, goes to non-poor households,» Sakellis adds. The poorest region is Epirus with 37 percent, followed by Central Greece at 32 percent, Western Greece and the Peloponnese with 31 percent. At 12 percent, Attica has the lowest poverty rate. Low accessibility Poor households have low accessibility to specific social services. For instance, the parents of 68.24 percent of students in tertiary education were not working-class. According to data compiled by the Bank of Greece and the National Statistics Service, nine in 10 Greek households with an annual income of less than 11,130 euros faced serious difficulties meeting their daily needs and loan repayments. There are about 800,000 households, totaling 2,127,000 people, of whom 40 percent are employed and pensioners and 8 percent unemployed. But 33 percent are economically inactive, of which 75 percent are women. Among children up to the age of 15, the rate is 19.7 percent.

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