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Reeling under pressure? The welfare state and the crisis in Greece

Manos Matsaganis ()
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Manos Matsaganis: Athens University of Economics and Business

No 1231, DEOS Working Papers from Athens University of Economics and Business

Abstract: �Long lines of the unemployed caused by economic crises are the core business of the welfare state�, as Francis Castles recently wrote. There is little doubt that the economic crisis currently affecting Greece is indeed having a huge impact on the labour market. As a matter of fact, not only have the lines of unemployed become longer, but their composition has changed: for the first time in recent times, they include a great number of male breadwinners in households in which nobody else works. In the light of the above, unemployment threatens to drag whole families into poverty: this is �the New Social Question� of our times. Nevertheless, while the crisis has greatly raised the demand for social protection, the supply of income support and social care to the must vulnerable of its victims has not risen accordingly. Far from it: although emphatically not under-funded, the Greek welfare state was unfit to cope with the social consequences of the economic crisis in 2009 (when the Greek crisis erupted), and remains so now. If anything, austerity policies did not spare those on low incomes, while structural reforms did not prevent the disruption of essential services and failed to strenghten significantly the social safety net. The paper offers an early analysis of the impact of the crisis on the labour market and the distribution of incomes. It then critically reviews social policy responses in a context of both cuts to social spending and reforms in social programmes. The paper concludes by discussing prospects for social policy in an era of permanent austerity.

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