Greece’s Failing Economy Causes Poverty

0

ATHENS, Greece — The Eurozone has had its fair share of financial trouble since 2009. But there is more to the euro crisis than high borrowing costs for countries with less export and recovery for banks that loaned money to weaker countries. There is a human side to the financial crisis, and in Greece, this is becoming horrifyingly clear.

Greece was among the countries hardest hit and has continued to struggle. The nation’s economy has shrunk 20 percent since 2008, and it relies on international assistance, particularly from Germany, to stay afloat. Unfortunately, the Greek government’s austerity measures that were meant to decrease budget deficits have instead put pressure on the local citizens.

Since the implementation of these measures, income for Greeks has decreased. On top of this, when plans were first implemented, unemployment was nine percent, but this has risen drastically to over 25 percent. Basically, the fiscal crisis in Europe caused the country to take austerity measures, cut spending and raise taxes to try to stabilize Greece’s failing economy, but these efforts have only lead to poverty.

Now over a quarter of the Greek population is at risk of poverty. This rate is among the highest in the European Union. In fact, Greece’s population living in poverty is three times that of Iceland, which has the lowest rate.

Part of the problem is the high level of unemployment. Greece has an unemployment rate of 27.2 percent, as compared to the 10.9 percent average of the entire European Union. Ionnis Kouzis, a professor at Panteion University and adviser to the General Confederation of Greek Workers, says, “There are 470,000 households without anyone working.”

To make matters worse, six out of 10 people may be seeking a job for longer than a year without success, and 72 percent of unemployed people will be jobless for the long term.

As a result of financial and social struggle, Greece now has a new demographic of poor citizens: the middle class turned impoverished. Many middle class citizens had their pay decreased or lost their jobs when the crisis hit and are now living under the poverty line on less than 11,900 euros, or $16,000, for a household of four. Meanwhile, 86.5 percent of the people who once had a little excess money can no longer afford a family vacation.

The economic downturn and resulting societal shifts have been particularly hard on Greece’s children. About 686,000 children are now at risk of poverty, and the number of children growing up with unemployed parents has risen nearly 70 percent in four years. Because parents cannot find work, well over 6,000 kids are working to support their families. This has led to a dropout rate of 11.4 percent in Greece’s schools.

The problem of poverty for Greek youth has become more about suffering and a struggle for survival than a solely economic problem. Seventy-four percent of poor households in Greece that have children cannot pay for basic needs like food. Doctor Athena Linos of the University of Athens Medical School says, “When it comes to food insecurity, Greece has now fallen to the level of some African countries.” This means that malnutrition rates are soaring, and 44.3 percent of school children have no nutritious meals in a nation where hunger is not endemic or typical.

The government is working to repair Greece’s failing economy, but the nation’s people have yet to feel the results in a positive direction. In fact, it often feels like the country is failing its citizens. For example, the 2014 budget cut social welfare by 6.8 percent from the 2012 and 2013 levels, and an 18 percent reduction is expected soon.

It will take time for Greece to recover fully, but the government is taking admirable steps to remedy the financial problems in the nation. The new finance minister Gikas Hardovelis, who took office in early June 2014, will hopefully push the country into better economic times. With a more stable economy, the people of Greece will be able to restore their businesses, find better-paying jobs and ultimately return to enjoying their lives without worry of financial insecurity.

 

Learn what causes poverty.

Caitlin Thompson

Sources: EurActiv, The Guardian 1, The Guardian 2, Europe 2020 Targets, Spiegel, The New York Times, The Guardian 3, NPR, Greek Reporter 1, International Business Times, Greek Reporter 2
Photo: Reuters

Share.

Comments are closed.