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Theory vs Reality gap revealed by “decent living standards criteria” issued by Greek government

How much money does one need to cover monthly basic needs while living in Greece? Well, it depends…. In fact, it depends on who decides. The Troika, the government institutions, the banks, the employers or just the person concerned? The views seem to vary between the theoretical approach and the real needs to be covered. The austerity theory is theoretically right but practically wrong then reality is stronger than any plan worked out in an four-walled bubble. The discrepancy between theory and real life is been nicely demonstrated in the “decent living standard criteria” issued by the Greek Development Ministry.

If it would be up to the Troika that drastically reduced the minimum wage from 800 EUR down to 586 EUR gross, a single person household needs 480EUR net per month to cover basic needs. However the Greek government decided that a single person household would need at least 532 EUR to come through the month according to the so-called “decent living standards”.  Respectively a couple would need 906 EUR and a four-person household consisting of parents and two children at least 1,126 EUR.

Under basic needs the Greek government defines expenses for

“food, clothing and footwear, housing operating costs, moving, repair and maintenance of furniture and household equipment, household consumption and personal care, information and education, telephony services and postal items and health services, education services, social protection services and financial services.

Excluded from the basic needs listing are expenses for taxes, social security contributions, rent or mortgage installment.

If all these expenses are added, I would dare propose that a single person household needs at least 800 EUR to survive a month and a family would need to add at least 500-600 EUR at least.

Anyway these “decent living standard criteria” were released Friday by Greek Development Ministry in the context of new regulations guidelines for loans settlement. The specific “decent living standard amount” will be the basis of discussion between borrower and the banks to settle all kinds of loans.

Amount needed to cover very basic needs:

  • single person household: €537-€682
  • couple: €906-€1,160
  • couple with one child €1,126-€1,440
  • couple with two children €1,347-€1,720
  • couple with three children €1,775-€2,296
  • couple with four children €1,778-€2,280 (via in.gr)

Expenses like dining out, alcoholic drinks consumption, smoking, purchase of appliances, vacations, air travels, leisure, sports and culture are considered as “extravaganzas”.

Development Minister Kostis Chatzidakis said this morning on Skai TV that the data on the basic expenses are based on surveys conducted by the Greek statistics agency (ELSTAT) in 2012 according to international Classification of individual consumption by purpose (COICOP) statistics criteria.

I did not read in any Greek media how the loan will be settled if the borrower has just enough money to cover basic needs. But this we will probably read in the next days, weeks, months, then the measure will apply in 2015.

Fact is that we learned how much money we need to cover our basic expenses and that we need certain amount of money that has nothing to do with the current salaries and wages in Greece of loan agreements, austerity measures and recession.

PS As one guy used to say in older Greek film “We lack 99 drachmas to save 100.”

 

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