ECONOMY

Gov’t unveils plan to improve efficiency of social spending

The planned National Social Cohesion Fund (ETAKS) will operate income support programs, including in the form of subsidies for the purchase of heating fuel by households under the poverty line, Economy and Finance Minister Giorgos Alogoskoufis said yesterday. He said ETAKS, whose budget will gradually rise to 2 billion euros by 2011, will target improving the efficiency of social spending and have measurable results in the drive against poverty. According to the bill presented by Alogoskoufis, the ministries of Health and Employment will annually submit programs of income support for specific groups of individuals or households that live under the poverty line, such as single-parent families, the long-term unemployed, young couples and the disabled. The programs will be assessed by ETAKS and submitted for approval to the Finance Ministry. Alogoskoufis said declared incomes will not be the sole criterion for income support, as, due to tax evasion, it tends to be an unreliable indicator. «Other objective criteria, differing from program to program, will have to be taken into account, such as the employment situation, family status and property, and health situation,» he said. The government hopes that ETAKS will enable the government to drastically reduce the number of Greeks living under the poverty line, which in 2004 was -5,650 per annum for an individual and -11,860 for a family with two children, according to National Statistics Service data. On the basis of this, 19.4 percent of the population (about 2 million) lived under the poverty line. Despite the fact that Greek social spending is almost on a par with the European average (26 percent, against 27.6 percent of GDP), it lifted only 13 percent of people out of poverty, against 38.5 percent in the EU as a whole.