A study for the Düsseldorf based Macroeconomic Policy Institute (IMK), titled “Greece: Solidarity and Adjustment in Times of Crisis,” examined the impacts of the crisis in Greece.
The report combines unemployment and income data and uses an ‘index of despair’ reflecting the pressure felt by households hit from salary drop and unemployment. The findings suggest that pauperisation hit large parts of the society and that policies had very differentiated effects on different groups and that average values obscure the effects of the austerity policies to different socioeconomic groups.
One of its findings was that from 2008 to 2012 the tax burden on lower-income Greek households shot up by 337.7 % percent compared to just 9 % for high-income groups
Other than major inequalities between rich and poor, the researchers, Athens university professors Tassos Giannitsis and Stavros Zografakis, also noted a major gap between the public and private sectors. In 2009-13 average pay cuts in the public sector came to just 8 percent. In the private sector they were sliced by as much as 19 percent. This further widened the gap between average salaries in the two sectors from 35 percent to 43 percent.
“This policy had much more destructive effects on the productive base of the economy than a spending-led adjustment process, leaving intact an inefficient, corrupt and backward public administration,” the authors note.
The study found that during the period of the study (08-12) taxation made a 72.4 percent contribution to fiscal adjustments, compared to the 7.5 percent contribution of spending cuts.
It concludes by saying that the “emergence and persistence of such divides implies that certain categories of people have come out as winners from the crisis.”