Greece Sets 500 Euro Election Dividend

ATHENS – With critical May elections looming for Greek municipalities and the European Parliament, Prime Minister Antonis Samaras is rushing to hand out 524 million euros ($726.48 million) in a so-called “social dividend” to some of the groups most affected by austerity.

It’s a turnaround in campaign strategy for Greek political parties: doling out money instead of jobs. The money would come from a 1.5 billion euro primary surplus.

He had promised to return 70 percent of it to low-income pensioners as well as a core constituency for his New Democracy Conservatives: police, military and emergency personnel who’ve had their pay cut.

It won’t be a bonanza though for people who’ve seen their disposable income cut 46.8 percent, pay and pensions slashed 30 percent or for the 1.4 million people out of work: some one million applicants will get about 500 euros ($693) in a one-time payment.  

The surplus – which doesn’t include interest on debt, the cost of running cities and towns, state enterprises, social security and some military expenditures – was equivalent to 0.8 per cent of national output, outperforming the budget target of a zero primary balance.

“This is New Democracy’s way of trying to get people back on board for polling day,” Neocosmos Tsimas, a 76-year-old former postal worker told The Financial Times, referring to New Democracy, which is locked in a tight battle in the elections with the major opposition Coalition of the Radical Left (SYRIZA).

“I badly need the money because I’m behind with paying bills, but I may not bother going out to vote,” Tsimas added, pointing to a different problem for the country’s political parties: about one-third of people aren’t interested in the elections or who wins.

The country’s international lenders, the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) gave the go-ahead for the dividend after the surplus was ratified by the EU’s statistic’s agency Eurostat, relying on numbers provided by its Greek counterpart, ELSTAT.

About a third of the surplus will be used to pay down public debt of 310 billion euros ($430 billion,) which last year hit a record 175 percent of national output.

“We need to strike a note of optimism in a practical way after such a long recession,” an official from the PASOK Socialist, a partner in the government coalition, told the Financial Times, referring to harsh austerity measures imposed on the Troika’s orders.

“Austerity brought disastrous social consequences . . . it ripped apart the social safety net,” he added, citing a 35 percent fall in household incomes since 2009, a tripling of the jobless rate among heads of families and the loss of state healthcare benefits for some 1.2m unemployed workers.

Civil society representatives said the social dividend would be better targeted if it were distributed by organizations working with vulnerable groups rather than the government.

“The cash payments are beneficial considering that almost one-third of the population is living in poverty, but they’re not going to reach vulnerable groups like the homeless or HIV positive who aren’t registered somewhere in the system,” Epaminondas Farmakis, Chief Executive of Elpis, an Athens-based consultancy for philanthropists and donors, told the newspaper.

Tzanetos Antypas, director of Praksis, a non-government organization, added that the divided “could be more wisely handled to create something that’s development oriented and has continuity . . . getting 500 euros is good, but after it’s finished, then what?”