Lambidona: The changing welfare state of Greece
Chapter 5 of “The Million-Dollar Question” series.
Photos: A. Christofilopoulos / FOS PHOTOS
The Greek welfare state is changing, and so is Maria’s pension. 52 percent of the Greek households say that the pension is their main income. It’s a big political topic, even though it doesn’t include all; “outsiders” of the Greek labour market are still on the sideline, and cannot hope for anything. The last article of the series The Million Dollar Question looks at the changing Greek welfare state, the pension system, and at Maria and Xenofontas, an insider and an outsider.
Maria is writing “Καλά Χριστούγεννα” on the back of an invitation inviting people to a meeting honoring Fidel Castro, following his death in late November. “Sorry Fidel,” she says, then asks if she should write it in Greeklish? “Yes” I answer. “Kalá Christoúgenna,” she writes, while she says the words out loud. It means Merry Christmas, and she expect me to repeat it. I do my best.
We are sitting in the community house of Lambidona. Most of the people who come here on Saturdays for the soup kitchen are done eating and are either leaving or sitting silently, digesting.
“I want to show you something,” Maria says and gets up, turns to the kitchen, where her bag is. When she returns, she has an old cookie jar in her hands.
“Kourambiethes,” she says. Inside the jar are a couple of big white cookies lying on a napkin. She takes one out and puts it on a plate for me to try. “I made them yesterday,” she explains.
The cookie is dry and crisp, it taste of butter and almonds and has a thick layer of powder sugar. “It’s really good,” I tell her.
“For a guy like me the door is closed, everywhere.”
Maria is a former kindergarten teacher, now a pensioner, and she is one of those generous, kind people that you immediately like and trust. She is always calm and it’s easy to make her smile.
Besides going to the soup kitchen every Saturday and Wednesday, Maria likes to watch “Game of Thrones,” read books, and walk her dog around the neighbourhood. She is 63 years old, “but not old fashioned,” she once told me. “I know how computers work, and I like to play computer games,” she explained.
Xenofontas, on the other hand, takes more time to get to know. He always seems to be two steps ahead, at least in the kitchen, and it is easy to get in his way. When you do, he makes a high sighing sound; not exactly mad, but not pleased either. He is 60 years old, only two years younger than Maria, but he does not receive a pension or any unemployment benefit; his work history was not as straightforward as Maria’s.
Xenofontas last had a job around four years ago, and he did “many, many things before” he lost that one. First, he was self-employed and had a store selling fabric for women and children’s clothes. For the eight years Xenofontas owned the store, it was successful for a couple of years, then it went downhill and eventually had to close. He started working as a waiter, then as an assistant for a French chef, and until four years ago, he was a salesman, selling all kinds of stuff; “sometimes something important, sometimes something not important,” he says. Today, he is still looking for a job.
“For a guy like me, 60 years old,” Xenofontas explains, “the door is closed, everywhere.”
These many different professions, unlike Maria, have left Xenofontas in a weaker relation to the labour institutions. Maria can be called an insider, when it comes to Greek labour and union institutions, while Xenofontas was, and still is, an outsider.
The welfare system in Greece was built on a sort of insider-outsider divide, which means the labour market, and the benefits and services that comes along with it, excludes those without regular employment. In 2007, it was estimated that about 25 percent of the Greek labour force falls within this category. Today, that number is probably higher.
To understand the difference between Maria’s and Xenofontas’ situations, it might be helpful to look at the shape of the Greek welfare state.
Sociologist Gøsta Esping-Andersen introduced a typology of the welfare state in the 90s. He distinguished between Liberal (e.g., Australia, Canada, Japan, Switzerland and US), Christian Democratic (e.g., Austria, Belgium, France, Germany) and Social Democratic (e.g., Denmark, Finland, Netherlands, Norway and Sweden).
This typology was in general well received and widely used, but his typology also received criticism; not taking into account the welfare states in Southern Europe, namely Italy, Greece, Portugal, and Spain. According to scholars, these welfare states should be treated as a separate model, not belonging to Andersen’s so-called “conservative” typology. These countries work after ‘the Southern Europe welfare model,’ as scholars have since named it.
In all welfare states the labour market, the family, and welfare institutions are the three main factors responsible for delivering social benefits and services. Their volume and the way they interact with each other, however, differs. In the Southern Europe welfare models, families and labour institutions play a bigger role, and often this model involves more employment protection and less social protection.
Stella Zambarloukou, from Crete University, wrote about the Greek welfare system in the report ‘Greece After the Crisis: Still a Southern European Welfare Model?’ (2015).
She explains how the state can be understood as having been taken over by political party interests, and tends to distribute cash benefits and services in a clientelist fashion in exchange for political support.
Other notable characteristics are that they are more fragmented and particularistic in their operation, as well as having clientelist ties between political parties and occupational groups. These are factors that mean certain sectors of the labour market get higher than average cash benefits.
This form also led to serious gaps among sectors and professions, as well as underdeveloped protections for vulnerable groups, making a big difference between Maria and Xenofontas.
“Those hit hardest are left, for the most part, unprotected.”
Before the crisis, the pension system in Greece was already understood as unsustainable, but the governing political parties since the 80s haven’t been able to implement reforms.
Stella Zambarloukou writes, “Trade unions and professional organisations opposed all reforms that threatened acquired pension or health benefits. This along with the lack of political consensus on the type of change needed succeeded in preventing most reform efforts undertaken prior to the recent economic crisis,” explaining why the Greek pension system hasn’t followed the developments seen in other European countries.
That fact as well that Greece, as so many other countries, is facing a demographic change, where the elderly grow older and the working population becomes smaller, leaves the pension system too expensive and unsustainable. According to data from the UN, Greece has the sixth oldest population, which is one of the obvious reasons for pension reform.
“The Greek welfare state is undergoing a process of hybridisation as features associated with other regimes, mostly of a liberal orientation, are incorporated in the existing model.”
The pensions system was one of the first big hurdles austerity-hit Greece had to deal with. The fragmented pension system, which prior to the reforms had over 130 pension schemes, was reorganised into three major funds: one for salaried and wage employees, one for the self-employed, and one for farmers.
Cuts were also carried out between 2010–2013. For specific professions, this meant that their income fell more than 30 percent, targeting those with higher pensions. Today, some statistics show that the average pension is about 900 euros, while others set the average as low as 664 euros a month.
According to Politico.eu, pensions are the main income for 52 percent of all Greek households.This number has increased 12 percentage points since 2011, showing how pensions have become more and more important for Greek families.
Maria’s pension is above average. She says her income is around 1,300 euros and she doesn’t want to complain. “I know people are struggling more than me. I’m doing okay,” she says.
Until recently, her 35-year-old son lived at home, but in early December he left for Norway, looking for a job. Before a job in Norway becomes a reality, Maria is the one providing for him.
Xenofontas is not leaving for Norway in search of a job, a dream like that is long gone. But he has to leave his home by the end of the year, and hasn’t found a new one. “I’m not doing so well. I’m nervous most of the time,” he says and continues to fill small tupperware with leftover food, that he and the kitchen staff bring home with them. Within those brief seconds between what he said and filling the tupperware, it seems like he has shaken his nervousness and focuses on what he can: securing the next meal.
Following Stella Zambarloukou’s argument in her report on the Greek welfare state, the lack of consensus in the Greek political sphere has cost delays and little clear vision on reforms, which has ultimately meant that many of the measures Greece is now seeing are “being dictated by the need to reduce cost, rather than other considerations such as social equity or income redistribution,” she writes, referring to Greece’s lenders, who are here often called dictators and are keeping a close eye on Greece — most recently with the Christmas bonus, which the Tsipras government gave to the poorest pensioners.
Zambarloukou’s main object was not to address Greece’s lenders, instead, she examined how the the Greek welfare system has changed during the years of crisis and austerity.
Going through the radical changes from the previous arrangements to the newest organisation and cuts, she concludes on the whole, that the newest system has more emphasis “placed on protecting insiders rather than outsiders.” Meaning that those hit hardest are left, for the most part, unprotected.
She also indicates that the welfare state of Greece now points towards a “residual” welfare state, characteristic of the liberal welfare states, but, “It would be wrong to assume that the welfare state as a whole has moved towards a liberal direction,” she continues. “In the case of health care, for example, public service provision has become more universal than before, even if lack of funding undermines the effectiveness of the system.”
Her examination of the welfare state leads her to conclude, finally, that the Southern European welfare state in Greece has not been totally dismissed. The current formulation still features a strong bias towards pension provision, work-related social insurance and unemployment benefits, as well as strong reliance on the family and the absence of a minimum social safety net for those outside of regular employment.
However, she writes, the Greek welfare state “is undergoing a process of hybridisation as features associated with other regimes, mostly of a liberal orientation, are incorporated in the existing model.”
I have heard some call Greece a “neoliberal experiment.” I think of this, while I read Zambarloukou’s report and while I visit Maria and Xenofontas in Lambidona.
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Chapter 2 of “The Million-Dollar Question” series.medium.com
Chapter 3 of “The Million-Dollar Question” series.medium.com