Destroying Greeks

04/02/2018

Shocking report: Macroeconomic indicators improve but Greece’s society is suffering

February 1, 2018

Greek society in economic decline: Three out of four are long-time unemployed. 51% of the households depends on pensions. One in five households is afraid to lose its home. 70% of the young Greeks want to look for a work abroad. 16.3% say they cannot afford to cover an extraordinary expense of 500 euros.

These shocking data is the result of a public opinion poll conducted by GSEVEE, the Hellenic Confederation of Professionals, Craftsmen & Merchants. The poll was conducted in cooperation with Marc in a sample of 1006 households between 15 and 21 November 2017.

The survey data confirm that the despite the improvement of macroeconomic indicators, the ‘fruits of the austerity and reforms’ have not reached down to the average Greek.

Widening disparities between low and medium incomes lurking danger to the community development model according to the findings of the consecutive survey of the economic sentiment conducted by the GSEVEE.

Despite the signs of improving macroeconomic indicators, three important elements show that the improvement has not reached the average Greek on the street:

70% of young people want to look for work abroad,
51% of households rely on pensions despite the cuts that have already taken place
3 out of 4 unemployed are in long-term unemployment.

“Bomb at the foundation of social cohesion is that one in five households fear that they will lose their home,” GSEVEE chairman Giorgos Kavvathas said during the report presentation.

1 in 4 households is unable to meet its obligations.

Income – Economic situation of households

A marginal improvement is observed in terms of income mobility. More than 1 in 3 households (34.2%) say they live with annual family income on the bottom income scale (up to € 10,000).

62.4% of households reported a 2017 lower income than in 2016
an increasing rate (35.6% vs. 22.2% in the 2016 survey) indicates a stabilization of their income status.

The overall decline in income is also reflected by the annual figures published in the ERGANI public system for 2017: the average annual gross salary amounted to EUR 1021.13 slightly lower than in 2016 at EUR 1057.21.

There is a clear trend of widening inequality in favor of upper income groups (in the category of over €30,000, there is an increase of 14.1% in the population). Especially vulnerable are households with one unemployed member of the household.

Only 3.1% of the population manage to save money.
In a recent study by the Bank of Greece (July 2017), it is noted that Greek households have lost 26% of their income and 37.5% of the value of their assets after the start of the crisis.

Poverty

14.6% of households indicate that their income is insufficient to meet their basic needs, a finding associated with the extreme poverty rate in the country (estimated at 40% of the median income, ELSTAT). According to official data from Eurostat Survey on Income and Living Conditions), the relative poverty threshold fell from €7,178 in 2010 to €4,500 in 2016, indicating a significant reduction of middle income. Taking the 2010 poverty line as a measure of comparison, about half of households would be considered poor today (48%).

The phenomenon of income poverty appears consistently high.

With regards to the possibility of an extraordinary payment of 500 euros: 16.3% said they could not afford it, while 52.2% would cover this expenditure with great difficulty.

More than 6 out of 10 households (61.1%) are forced to make cuts to secure the necessary for their survival. It is noted that large (over 5) households and households with the unemployed face a more serious problem of meeting basic needs.

Expectations

Household expectations for 2018 remained negative:

63.6% in 2017 ( 73.5% in 2016) expect the worsening economic situation.
27.9% believe that it will remain stable
5,1% expects improvement of economic potential

The expectations are related to household projections on their ability to meet current and future liabilities, as well as low expectations related to the prospects for improving household finances.

Indicative is the fact that an increasing proportion of the population says they could meet the basic needs of the month with less than € 1,000 (34.3% in 2017 vs. 26.9% in 2014).

Pensions feed whole families

Pension remains the main source of income for more than half of households, despite individual cuts. The pension continues to remain as substitute for the welfare state and social protection.

Without the pensions, the poverty ratio would be at 52.9% of the population.

Business Activities

Households declaring income from business activity as their main source of income remain at a very low 5.9% rate, suggesting that Greek domestic households are unable to develop viable and profitable business activities in the particular economic environment. It is obvious that for a large portion of households, starting up a business acts as a supplementary income support tool (in the form of an allowance).

Employment – Unemployment

29.9% of households, ie about 1 million households, have at least one unemployed person in the family. The long-term unemployment rate is 83.5% of the total unemployed. For all unemployed members of households, the unemployment benefit is limited to 7.3%.

Almost 3 out of 4 unemployed are in a state of long-term unemployment, which threatens to depreciate the productive fabric and the human capital of the country.

Economic marginalization concerns not only the unemployed population but also groups of workers.