Poverty in Greece has marked an increase of 40% in the period 2008 to 2015, according to a new report (Armut in Europa – eine multidimensionale Betrachtung) released by the Cologne Institute for Economic Research (Institut der deutschen Wirtschaft Koeln, IW), as Kathimerini and Avgi daily newspapers point out.
The report has shown the poverty rate breaking new records many European countries including Germany, even as GDP continues to grow. As is described in the report, when discussed in public, poverty is often equated with relative income poverty. However, to define poverty exclusively in terms of low income is to see it too narrowly. The at-risk-of-poverty rate, the proportion of the population earning less than 60% of the median household income, is actually a very specific measure of income inequality. The Czech Republic fares best on this indicator, while with rates between 21 and 25% the Baltic States, Greece, Spain, Romania and Bulgaria come out worst. Germany has a slightly below-average at-risk-of-poverty rate, putting it in the middle of the ranking.
The research carried out by the IW did not limit its criteria to the lowest income index. It followed instead a multidimensional approach, including a combination of factors such as income, material deprivation, education, gainful employment, housing and housing environment, as well as health.
The EU defines as poor anyone forced by lack of resources to accept a lower standard of living, the study concludes. So-called consistent poverty is calculated as a combination of relative income poverty and material deprivation and therefore meets the EU definition. Alternatively, poverty can be measured as a lack of capabilities and opportunity for self-fulfilment. In the present study, the factors considered are income, material deprivation, education, gainful employment, housing and housing environment, and health, with the indicators for these factors being summarized in a multi-dimensional poverty index. The index ranks Norway, Sweden and Switzerland highest, with Bulgaria, Romania and Greece bring up the rear, a result similar to that for consistent poverty. In Germany, the poverty rate based on the two measures is considerably lower than the EU average. Subjective income poverty also correlates closely with the two multidimensional poverty measures. This makes the latter more suitable for depicting reduced circumstances and also more appropriate for setting policy goals in the fight against poverty.
Map of Poverty in Europe
As revealed by the findings of the German study, “Greece is the big loser,” as its poverty rate of increase during 2008-2015 was 40%, the largest among the EU countries, followed by Cyprus with a 28.2% rise and Ireland with a 28% increase. In Italy, the figure stands at 11% and in Spain 18%.
The IW attributes the deteriorating financial situation of Greek households to years of recession and high unemployment, as well as tough austerity measures and the conditions and terms imposed on Greece by its creditors.
Read the full report – includes an English summary in p. 41: Armut in Europa – eine multidimensionale Betrachtung; See also DW’s short presentation of the report: German poverty rising – despite economic growth