Wel­fare to be slashed by 900 mln eu­ros per year in ben­e­fits re­form

Kathimerini English - - Front Page - ROULA SALOUROU

Sweep­ing re­form­sto Greece’s wel­fare sys­tem are planned to come into force in 2016 at the latest, in­clud­ing the uni­ver­sal ap­pli­ca­tion of the Guar­an­teed Min­i­mum In­come scheme, as part of the coun­try’s third bailout plan. The third mem­o­ran­dum, in which sup­port for the most vul­ner­a­ble so­cial groups is a pri­or­ity for the gov­ern­ment, re­quires wel­fare cuts of 0.5 per­cent of gross do­mes­tic prod­uct each year as part of wide-rang­ing re­forms.

The new mem­o­ran­dum fore­sees a com­plete eval­u­a­tion of the ben­e­fits cur­rently pro­vided both in cash (through the pi­lot im­ple­men­ta­tion of the Guar­an­teed Min­i­mum In­come scheme in 13 mu­nic­i­pal­i­ties of the coun­try) and in kind (through sol­i­dar­ity cards or the Euro­pean So­cial Fund’s poverty pro­gram). The World Bank has par­tic­i­pated sig­nif­i­cantly in the as­sess­ment, ac­cel­er­at­ing its pace to en­sure that work is com­pleted by this Oc­to­ber, as re­quested by the in­sti­tu­tions. The World Bank has re­quested an ex­ten­sion un­til the end of year.

An an­nual cost re­duc­tion of ap­prox­i­mately 900 mil­lion eu­ros forms part of the mem­o­ran­dum, as well as the fis­cally neu­tral im­ple­men­ta­tion and ex­pan­sion of the Guar­an­teed Mini- mum In­come scheme to a na­tional level. The sched­ule states that by Septem­ber 2015 there will be prepa­ra­tions for the im­ple­men­ta­tion of a mixed sys­tem of wel­fare mea­sures, while by Novem­ber 2015 the fi­nal de­ci­sions will be taken in the con­text of wider re­forms to the wel­fare sys­tem in Greece.

In or­der to mon­i­tor both the Guar­an­teed Min­i­mum In­come and other ben­e­fits, the gov­ern­ment is com­mit­ted to cre­at­ing a spe­cific con­trol frame­work by Septem­ber 2016, which will al­low the real-time clar­i­fi­ca­tion of whether ben­e­fi­cia­ries con­tin- ue to meet the re­quired cri­te­ria.

The mea­sures leave open the pos­si­bil­ity of the Guar­an­teed Min­i­mum In­come scheme be­ing con­nected with in­te­gra­tion mea­sures in the la­bor mar­ket. One ob­jec­tive is the cre­ation of 50,000 new job po­si­tions, mainly for the long-term un­em­ployed and those un­der 25.

The mea­sures to sup­port the em­ploy­ment of 150,000 peo­ple, in­clud­ing vul­ner­a­ble groups and ben­e­fi­cia­ries of Guar­an­teed Min­i­mum In­come, must be fi­nal­ized in col­lab­o­ra­tion with the Euro­pean Union by March 2016.

The gov­ern­ment will have to re­duce wel­fare spend­ing by 0.5 per­cent a year as part of its new agree­ment with Greece’s cred­i­tors fol­low­ing a com­pre­hen­sive re­view of the ben­e­fits sys­tem.

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