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Europeans in Financial Distress and Deteriorating Social Conditions; 68% of Greeks Below Poverty Line

Labour market and social situation for many European citizens is deteriorating. These are the results of European Commission review, published in the  Quarterly EU Employment and Social Situation Review at overall EU level. The gap between the South and the North is increasing. Unemployment hits mostly the countries that received bailout aid, with more and more young people willing to go abroad to find a work: among the ages 15-35: 64% of the Greeks, 67% of the Spanish and the Irish and 57% of the Portuguese.

Financial distress and living conditions

There has been a sharp rise over early 2012 in the share of households having to draw on their savings or to go into debt to keep up current expenses. This increase in financial distress especially affects people living on low and middle income, for whom the situation is deteriorating. Especially notable are the increases in poorer households in Italy and Spain, where the rates of financial distress have risen from 16 % to 26 % and from 23 % to 33 % respectively over the year to April.

Living conditions are deteriorating significantly in a number of Member States. Between 2008 and 2010, the share of people unable to pay their utility bills increased on average by 1 percentage point to 9% on average in the EU and by more than 3 percentage points in 10 countries. Several countries experienced marked increases in the number of people unable to afford a meal with meat (or equivalent proteins) every second day. Women tend to face higher deprivation rates than men, according to the quarterly survey. Homelessness has also grown across the EU as many people have experienced unemployment or substantial falls in income. Young people and foreign nationals have been disproportionately affected.

The Review describes with the most grim figures the issue of homesless in Greece.

“In 2011, homeless were increased at 25% in comparison to 2009, their number is 20,000 people. More than half of them (11,000 people) are located in Athens and Piraeus. 8,000 are Greeks. The social phenomenon has spread also to cities like Chania, IRakleio (Crete) and Trikala.”

The review underlines also that 68% of the population in Greece lives below the poverty threshold ( that is, it has income below the 60% of the average national income) and spends more than 40% of their income for renting a home or to repay mortgage.

The full Review can be read here.

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20 comments

  1. Title is very misleading, the report says:

    “68% of the Greece’s population living below the ‘at-risk-of-poverty’ rate (i.e. having an income below 60% of the national median) were spending over 40% of their income on rent or mortgage payments.”

    Lets take into account how many have been falsely claiming low income over the years.

    • The definition of “at risk of poverty” if your income is below 60% of the national median is nonsense anyway.

      First, the measure used should be the median income for the region, not the whole country. Where there are substantial differences in income and cost of living across a country — for example, compare a rural area in northern Greece with Athens — then most people living in the rural area will fall into that definition.

      Secondly, poverty should be measured by the ratio of post-tax income to essential expenditure. The only thing they have measured is the proportion of income spent on housing — and I am not sure that they have taken account of shared housing costs — so some people in Athens who are clearly not in poverty will be categorised as poor, and others who earn just over the threshold but whose living costs are high will be excluded.

      It is a pile of crap, in other words.

  2. When are you going to get it through your thick skull that these are not the people who have been declaring false income etc. These are the people who are caught in the tax net and for years have been abused as factory fodder by those who have indeed been under-declaring or simply not paying tax, and still getting away with it. This is by the way not a Greek phenomimum, it’s quite common in the upper echalons of Euroland.
    If you are going to cross t’s and dot i’s let’s do it fairly then. The confusion about the 68% is not “a misleading title” (implying intention to mislead), it is based on a wrong translation of the original sentence, reproduced in To Vima as “The commission notes that 68 percent of the population lives below the poverty line … and that more than 40 percent of their income goes on rent or mortgage repayments” and Lifo magazine “Sixty-eight percent of the population now lives below the poverty line and spends 40 percent of income on rent or mortgages”. The reality is that anybody, anywhere in Europe who earns less than 7,178€ (or 15,073€ for a household of 2 adults and 2 children under the age of 14)a year is deemed to live below the “at-risk-of-poverty” rate, which for Greece means some 28% (27.7 % to be exact, just in case you throw another wobbly) of the population.
    However, the most important thing this report proves beyond a shadow of a doubt, but of course doesn’t mention anywhere, is that

    “The idea that the euro has “failed” is dangerously naive. The euro is doing exactly what its progenitor – and the wealthy 1%-ers who adopted it – predicted and planned for it to do.”

    (that same wealthy 1% or the tax dodgers and those who under declare income, if at all)

    To realise where this quote comes from, you have to go back to the man who produced the blueprint for European Monetary Union and the Common European Currency, the Euro. Meet Mr. Robert Mundell, Canadian American economist, architect of supply-side economics (Reagan and Tatcher) and professor at Columbia University. You could write a book about this, and somebody eventually will after the damage is done, but this is in short what Mr. Mundell has to say about the Euro and its purpose

    “”It puts monetary policy out of the reach of politicians,[And] without fiscal policy, the only way nations can keep jobs is by the competitive reduction of rules on business.” (Check the MoU for examples of this statement!)
    He cites labour laws, environmental regulations and, of course, taxes. All will be flushed away by the Euro. Democracy will not be allowed to interfere with the marketplace (Remeber the voting-terror unleashed on Greece recently?). The Euro isn’t about turning Europe into a powerful, unified economic unit. Currency union is class war by other means.
    The Euro will really do its work when crises hit, Mundell explains to Greg Palast, journalist for The Guardian (UK). Removing a government’s control over currency will prevent nasty little elected officials from using Keynesian monetary and fiscal juice to pull a nation out of recession.
    And when crises arise, economically disarmed nations have little to do but wipe away government regulations wholesale, privatise state industries en masse, slash taxes and send the European welfare state down the drain. (Sound familiar? MoU???)
    The crisis in Europe and the flames of Greece have produced the warming glow of what the supply-siders’ philosopher-king Joseph Schumpeter called “creative destruction”.
    The flames, the mass unemployment, the fire-sale of national assets, would bring about what Friedman calls a “regeneration” of Greece and, ultimately, the entire eurozone.

    And this report is the proof of the pudding. It’s working, beyond the wildest dreams of those who’s sick minds managed to dream up this nightmare.

    • Hmm, I have read the same propaganda piece as you appear to have, about Mundell. I don’t think it’s accurate. I have studied the writings of Mundell, and they are not what is claimed. Maybe the guy himself was a bit on the right wing, but this is not the obvious outcome of the economic theory.

      Basically, the problem was identified in the mid 2000s by my old prof. (who helped design the euro system, but his advice was mostly rejected): the issue is whether the ECB targets low inflation or low unemployment. If it is the former, then there is a clear consequence: that Germany effectively runs Europe.

      Guess what? The malakes who created the eurozone didnt put in the ECB constitution any instructions: so, the place is full of neoliberal economists and especially Bundesbank influence, and hey presto Germany is running the eurozone.

      It didn;t have to be like that, and the morons who took Greece into this are partly responsible. Their names? Simitis, Papademos, Rapanos and Stournaras. Need I say more?

      • I would not think that Palast can be accused of propaganda in writing what he wrote. The bottom line of all of this is that it’s the age old battle between the economist and monetarists. At present, we are suffering the effect of the German economist approach, but even if the EU did a complete U-turn and adopted the monetarist approach of letting “the markets” sort it and as a result the different economies will converge sufficiently to end up with the beautiful union, the net result is the same. It will not happen. We will still end up with an economic core, surrounded by an economic wasteland, and Joe Soap ends up paying the price because monetary policy is not available to the localised economic wasteland to lift itself out of the position it’s being pushed into, thorugh for example devaluation. And it’s not in the interest of the economic core to do it for them…

        • Journalists generally write crap. You cannot trust anything you read in newspapers.

          • keeptalkinggreece

            in blogs too

          • Some blogs are more equal than others 🙂

          • keeptalkinggreece

            mainthing they have four legs 🙂

          • “Journalists generally write crap” A bit of a generalization, no? If you are talking about the Daily mail, Sun, Bilt, etc. type of journalist, then I do indeed agree wholeheartedly with you. But there are thank god others too (KTG being one of them indeed :)). They might not write what you want to hear, but that does not make it crap. It just makes it annoying that you have to admit that people can actually make and hold an argument you don’t like. Same thing with politicians. I have that very problem with none other than the intollerable Nigel Farage. As much as I dislike the man and his politics, it’s frightening to realise how many times I find myself agreeing with him (As I have said to others on this blog as well)
            I think the real problem here is not so much the problem of the Euro being the single currency, but that it was overtaken by the emergence of another, world-wide and unrecognized “Journalists generally write crap” A bit of a generalization, no? If you are talking about the Daily mail, Sun, Bilt, etc. type of journalist, then I do indeed agree wholeheartedly with you. But there are thank god others too (KTG being one of them indeed :)). They might not write what you want to hear, but that does not make it crap. It just makes it annoying that you have to admit that people can actually make and hold an argument you don’t like. Same thing with politicians. I have that very problem with none other than the intollerable Nigel Farage. As much as I dislike the man and his politics, it’s frightening to realise how many times I find myself agreeing with him.
            I think the real problem here is not so much the problem of the Euro being the single currency, but that it was overtaken by the emergence of another, world-wide and unrecognized currency which is doing the real damage. Over the last 10-15 years, debt has been allowed to become a currency in it’s own right. Financial institutions used to deal in currencies, make money on exchange rates, interest rates, etc. Over the last few years they have been packaging debt and selling debt for profit, or rather possible profit in the future, without there being any real back-up for this, other than more debt. And then things went wrong, and suddenly this parallel currency of debt needs to be transformed into hard currency so that it can be paid for. Because, where they were willing to take the risk with the promise of profit at the end of the road, when that profit didn’t materialize and became a massive pile of debt (which it was from day one, but blinkers come in handy when the illusion needs to be kept alive), the financial institutions are suddenly not prepared to accept the flip side of the profit-coin, i.e. loss. And as they control this new currency rather than governments, governmental financial and fiscal policy becomes totally obsolete and ineffective. All government can actually do is exactly what Palast says, flush the welfare state down the tubes in order to generate real currency (at our expense!) to pay for the political mistake of allowing this parallel currency of debt to emerge. Because it was indeed a political mistake through not applying existing rules of financial regulation.
            And who pays for all of this? Joe Soap who sees wages slashed, benefits reduced if not deleted completely, prices shoot up, pension shoot down, the complete works.

          • keeptalkinggreece

            sorry, I cannot edit long posts lacking paragraphs. My astigmatism does not allow me…

          • sorry, don’t know what happened there, but I sure Guest (Xenos) will work it out 🙂

          • It also creates a paranoid sense of “deja-vu”, when you directly repeat sections.

            Yes, I do stick to the line that all newspapers are crap. And tv channels. I have direct experience with several “serious” UK newspapers, where they stole material, misrepresented things as a favour for someone, humiliated those without any political power just to sell more newspapers, presented incompetent financial data (that were just wrong)… the list is endless. The two newspapers that I once trusted are the Guardian and the Financial Times. Never again.

            And the BBC is far worse.

            Nigel Farage is just a monomaniac Europhobe, who has for decades collected a high salary as an MEP from an institution that he thinks shouldn’t exist. He has just been waiting for something to go wrong so that he can crow about it. His analyses are a joke, since he understands nothing about political economy.

          • I don’t see how you can justify using 1 or 2 or 5 or 20 bad experiences as a justification to tar 1000’s of proper, honest journalists with the same brush? There will always be points of view that clash or coincide, that’s the nature of opinion, and journalists are as entitled to an opinion as anybody else. And others are indeed entitled to repeat if they agree. I will include the references from now on, and if KTG doesn’t like them (which I think is the case with links?), they can be removed, will that suit?
            You do seem to constantly dismiss opinions not coinciding with yours as total crap, rather than giving people at least the courtesy of allowing them an opinion and simply questioning it if you don’t agree. The dismissive attitude is rather authoritarian
            And then there are of course “lies, damned lies and statistics”…
            Fully agree on your analysis of Farage, it would seem though as if his moment has come. That’s what’s so worrying…

    • Well as you said yourself, To Vima & Lifo have mis-read the same report and the information they are providing is incorrect. This is Greece we are talking about right? De variese? What do you think will sell more newspapers, a balanced report like that from eurostat or sensationalism? As far as I know 28% of the population, which is the stat you presented is much less than 68%. Let’s not kid ourselves, I am not saying that things are not dreadfully bad in Greece, but 68% of the population would be nearly 7 million people. Are 7 million people living in poverty in Greece? Really? As far as you other “analysis”, thanks for the info, but what does it have to do with incorrect information being reported?

      • “As far as you other “analysis”, thanks for the info, but what does it have to do with incorrect information being reported?”

        Not reporting info is as damaging as reporting incorrect info, if not more so. The difference in this case is that I don’t think that the reporting of the 68% was deliberate, but the not reporting of the other info is most definitely deliberate. And the consequences thereof are very real, while the discussion on the 68% versus 28% is at best semantics, if not a smoke screen for certain people to get all uppity over thereby covering up the reality which is not being reported…

  3. Greek-repat:

    I disagree. And you know why? In a few months after the new cuts, all those ‘at-risk-of-poverty’ will sink below the poverty level and beyond. Minimum wage cuts and lay offs do this to people.

    Keep talking Greece: Great work informing people of what is going on. I was looking all over for this file and you had a link to it on your site. Thank you so much!!

  4. Well, you may be right Rum, let’s hope for the sake of the many fantastic people living in our beautiful country you are not. But this report is about the state of Greece at the time of the report, and that’s what I was commenting on. Also, for many of the people who do not declare their full income, these stats do not apply.

    And KTG, I do appreciate the fine work that you do too!

  5. KTG, you can’t blame the Greeks too much as most of their newspapers, magazines, just copy and paste from the US and translate it. I always get a laugh when reading Greek Maxim or other magazines and see it’s just the US Version translated into Greek. So, since Greeks just parrot the USA, they become dumb like us!!!