Poverty and the social safety net

This chapter examines how the social safety net (the welfare state’s anti-poverty armour) evolved since the mid-1970s, and how it responded to, and was transformed by, the social emergency of the 2010s. Its structure is as follows. The first section discusses the state of Greek welfare before the financial crisis broke out. The second section considers the social implications of the Great Recession, focusing on the effects on family incomes of job losses, falling earnings, and higher taxes. The third section provides an account of policy responses under austerity, and the fourth section reviews the evidence on changes in poverty and social exclusion. The chapter concludes that the Greek welfare state, even though no longer chronically underfunded, was structurally unfit to cope with any serious economic downturn, let alone the deep and protracted crisis that hit the country in 2010. Moreover, the system of social protection emerging from the recession and the austerity differ significantly from the situation that preceded it: It is certainly leaner, considerably less robust in core policy areas such as pensions and health, but also probably more effective in protecting vulnerable individuals and households against poverty than at any time in the country’s history.