Southern European Welfare States: Problems, Challenges and Prospects

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Southern European Welfare States Problems, Challenges and Prospects

George Katrougalos and Gabriella Lazaridis

Southern European Welfare States

Also by George Katrougalos LA CRISE DE LEGITIMITE DE L’ ADMINISTRATION: Le Cars de la Grèce CONSTITUTION, LAW AND RIGHTS IN THE WELFARE STATE AND BEYOND THE RIGHT TO LIVE AND THE RIGHT TO DIE THE SOCIAL STATE IN POST-INDUSTRIAL SOCIETY SOCIAL RIGHTS AND DEVELOPMENT (editors)

Also by Gabriella Lazaridis ELDORADO OR FORTRESS? Migration in Southern Europe (co-edited with R. King and C. Tsardanidis) GENDER AND MIGRATION IN SOUTHERN EUROPE (co-edited with F. Anthias) INTO THE MARGINS: Migration and Social Exclusion in Southern Europe (co-edited with F. Anthias)

Southern European Welfare States Problems, Challenges and Prospects

George Katrougalos and Gabriella Lazaridis

© George Katrougalos and Gabriella Lazaridis 2003 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London W1T 4LP. Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2003 by PALGRAVE MACMILLAN Houndmills, Basingstoke, Hampshire RG21 6XS and 175 Fifth Avenue, New York, N.Y. 10010 Companies and representatives throughout the world PALGRAVE MACMILLAN is the global academic imprint of the Palgrave Macmillan division of St. Martin’s Press, LLC and of Palgrave Macmillan Ltd. Macmillan® is a registered trademark in the United States, United Kingdom and other countries. Palgrave is a registered trademark in the European Union and other countries. ISBN 0–333–65537–0 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. A catalogue record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Katrougalos, George. Southern European welfare states: problems, challenges, and prospects/ George Katrougalos and Gabriella Lazaridis. p. cm. Includes bibliographical references and index. ISBN 0–333–65537–0 (alk. paper) 1. Europe, Southern—Social policy. I. Lazaridis, Gabriella. II. Title. HN650.7.A8 K37 2002 361.6⬘1⬘094—dc21 2002072305 10 12

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Printed and bound in Great Britain by Antony Rowe Ltd, Chippenham and Eastbourne

To Aude To Joanna

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Contents List of Tables

viii

List of Figures

xi

Glossary

xii

Acknowledgements

xiv

Introduction 1 2 3 4 5 6 7

xv

The Southern Welfare States in the European Context The Carrot and the Stick: Employment, Unemployment and Labour Market Policies Gender Inequalities, Family and Social Welfare: Continuity and Change Social Security: Pensions and Social Minima National Health Systems: An Originality of the South? Migration into Southern Europe: Some Reflections on Policy Implications Concluding Considerations: Are Southerners Becoming More European than Southern?

1 31 69 93 123 167 191

Notes

200

Bibliography

211

Index

229

vii

List of Tables 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 1.10 1.11 1.12 1.13 2.1 2.2 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 4.1

Perception of corruption of the administration in selected European countries, USA and Japan Indices of economic liberalism in EU countries Government expenditure Introduction of principal social legislation in various countries Social expenditure as percentage of GNP, 1990–96 Military and education expenditure Social assistance expenditure as percentage of social security, 1980–92 Receipts of social protection by type and category as percentage of total receipts Financing of social security Distribution of income in the EU Percentage of persons below the poverty line before and after social transfers (excepting pensions), 1995 Indices of poverty in the European South Poverty in the European South and the European Union as percentage of the population, 1993–5 Unemployment rates (percentage of civilian labour force) in the member states of the EU15, 1961–99 Population and labour force characteristics of Southern European countries, 1970–90 Fertility rates in Southern European member states, 1965, 1990, 1995 Structure of the child benefit package (i) Structure of the child benefit package (ii) Net disposable income of a lone parent Overview of family benefits in Southern Europe, 1993 Employment by economic sector and gender in Southern European countries as percentage in 1999 Employment by economic sector in Southern European countries as percentage, 1975, 1985, 1996, 1999 Male and female employment by economic sector in Greece, Spain, Italy and Portugal, 1977, 1985, 1996, 1999 Employment rates by educational achievement for the 25–9 age group, 1994 Evolution of social expenditure in Spain, 1975–95 (percentage of GDP) viii

14 15 16 19 21 23 24 26 26 27 28 29 29 32 35 75 79 79 80 82 88 88 89 90 96

List of Tables ix

4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 4.14 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 5.10 5.11 5.12 5.13 5.14 5.15

Gross domestic product and defence expenditure: annual variation as percentage Defence expenditure as a percentage of GDP, 1995 Average old age-survivors’ benefit per person aged 65 or over Qualification requirements and services Detailed breakdown of social protection expenditure (Greece) Detailed breakdown of receipts by type and sector of origin (Greece) Detailed breakdown of social protection expenditure (Italy) Detailed breakdown of receipts by type and sector of origin (Italy) Detailed breakdown of social protection expenditure (Portugal) Detailed breakdown of receipts by type and sector of origin (Portugal) Detailed breakdown of social protection expenditure (Spain) Detailed breakdown of receipts by type and sector of origin (Spain) General Regime and special schemes, 1996 Percentage of population with public health care coverage in OECD countries, 1960 and 1995 Life expectancy at birth: the Southerners and the world, 1900–96 Life expectancy at age 65 and 80 Infant mortality, 1900–96 Maternal mortality, per 100,000 births, 1970–95 Overall health indicators – diseases Rate of health systems according to the WHO’s World Health Report 2000 Total health expenditure as a percentage of GDP, 1985–97 (OECD estimates) Expenditure for sickness/health care, as percentage of GDP (EU estimates) Total health expenditure (WHO’s estimates) Health spending, as a share of GDP 1960–96 Public share in total health spending, 1960–97 (OECD estimates) Expenditure for disability, as percentage of GDP Recipients of main disability programmes as a percentage of the population, 1975–95 Main components of health care expenditures as percentage of total, 1970–90

97 97 101 104 109 110 113 113 115 116 119 120 121 124 126 127 127 128 128 128 130 131 131 131 134 135 135 136

x

List of Tables

5.16 5.17 5.18 5.19 5.20 5.21 5.22 5.23 5.24 5.25 5.26 5.27 5.28 5.29 5.30 5.31 5.32 5.33 5.34 5.35 5.36 5.37 5.38 5.39 5.40 5.41 5.42 6.1 6.2 7.1 7.2 7.3 7.4 7.5

Comparative statistical data of health care in Southern Europe Pharmaceutical expenditure in Southern Europe as percentage of GDP, 1975–93 Subjective evaluation of national health systems Evolution of subjective evaluation of national health systems, 1992–6 Subjective evaluation of health care deprivation The activity of major insurance funds in health service provision, 1996 Number of insured persons per doctor in major regions, 1998 Analysis of social benefits for sickness/health/disability care IKA hospitals, 1994–7 Hospital activity by type, 1993 Inhabitants per doctor and bed, and average nursing time Efficiency of hospitals Hospitals, beds, doctors and nursing personnel, by speciality, 1993 Regional distribution of all kinds of health institutions, 1995 Detailed breakdown of the social benefits of health care Hospital efficiency, 1995 Number of patients per general practitioner Total expenditure of the SNS, 1985–95 Health expenditure per district and region, 1995 Analysis of social benefits for sickness/health/disability care Distribution of the expenditure of the SNS, 1985–95 Expenditure by type of activity Public health institutions Analysis of social benefits for sickness/health/disability care Expenditure by type and function, 1998 Hospitals by category, 1995 Efficiency of hospitals, 1995 Evolution framework of immigration laws in Southern Europe Population of refugees in Southern Europe, 1995–6 Structural funds and the European South Public debt in the EU, as a percentage Public deficit as a percentage of GDP Social expenditure in core countries of the state-corporatist model and in Southern Europe as a percentage of GNP Government consumption as a percentage of total consumption

137 137 138 138 139 141 141 143 144 145 146 146 147 151 153 154 154 156 157 158 159 160 162 163 164 165 165 179 183 195 195 196 197 199

List of Figures 1.1 1.2 1.3 1.4 1.5 2.1 2.2 2.3 2.4 3.1 4.1 4.2 4.3 5.1 5.2 5.3 6.1 6.2 6.3 7.1

Confidence in the Church Social protection benefits by function, 1997 Growth of social expenditure as percentage of GDP, 1980–96 Social expenditure in Greece, 1968–2000 Social expenditure by category Unemployment rates as percentage of the civilian labour force in Southern Europe, 1960–99 Youth unemployment rates as percentage in Southern Europe, 1986–98 Male and female youth unemployment rates (seasonally adjusted percentage) in the EU, 1986, 1992, 1998 Employment by sector in Greece, Spain, Italy, Portugal and EU Women’s labour market participation rate, 1998 Old age and survivors’ pensions expenditure, 1990–97 Annual evolution of social and defence expenditure, in relation to the GDP variation as a percentage, 1970–91 Financing of pension systems Total health expenditure as a percentage of GDP, 1985–97 (OECD estimates) Health-sickness benefits by category Subjective evaluation of national health systems in the EU and the European South in 1996 Foreign legal resident population in Southern Europe, 1950–90, as percentage of total population Asylum applications in Southern Europe, 1987–96 National origin of asylum applicants in Southern Europe for 1996 (Principal national groups) Divergence of social expenditure between Southern European countries and (i) EU average and (ii) core countries of the state-corporatist model, 1990–98, as a percentage of GNP

xi

4 13 20 22 24 37 37 38 38 89 96 98 98 132 136 139 171 182 182

197

Glossary ARS CEOE Cig CIGO CIGS CSS EMU ENPALS ESF ESY EU GSEE HMSO ILO IKA INE-GSEE INEM INP INPDAI INPDAP INPGI INPS INSALUD IRCCS ISPESL ISS KEK KESY LAEK Minimo vitale

District Health Authorities of Portugal Confederation Espanola de Organizaciones Empresariales (Spanish Confederation of Employers’ Associations) Cassa Integrazione Guadagni (Wage Supplementation Fund in Italy) Ordinary Fund (in Italy) Special Fund (in Italy) Higher Health Council of Italy European Monetary Union National Welfare and Assistance Institute for Artists of Italy European Social Fund Greek National Health System European Union Confederation of Trade Unions of Greece Her Majesty’s Stationery Office International Labour Organisation Institute for Social Insurance of Greece The Institute on Labour Relations of the Confederation of Trade Unions of Greece National Employment Institute in Spain National Institute of Previsión of Spain National Welfare Institute for Industrial Managerial Employees of Italy National Welfare Institute for Employees of Public Authorities of Italy National Welfare Institute for Journalists of Italy Istituto Nazionale della Previdenza Sociale (National Social Welfare Institute of Italy) Instituto Nacional de la Salud (National Institute of Health of Spain) Institutes of Shelter and Cure of Italy Advanced Institute for the Prevention and Emergency of Work of Italy Higher Institute of Health of Italy Centre for Vocational Training in Greece Central Health Council of Greece Fund for Employment and Vocational Training (Greece) Social Assistance Scheme in Italy xii

Glossary xiii

OAED

Greek Manpower Organisation – Organisation for the Employment of the Labour Force and Vocational Training OECD Organisation for Economic Co-operation and Development OGA Organisation of Agricultural Insurance of Greece PASOK Greek Socialist Movement (now Party) PPS Purchasing Power Standards PSOE Spanish Socialist Party SEV Association of Greek Industrialists SNS Servino National de Salude (National Health System of Portugal) SSN Servizio Sanitario Nazionale Italian (National Health Service of Italy) TEU Treaty of European Union (Maastricht Treaty) TGSS Tesorerva General de la Seguridad Social (General Social Security Revenue Office of Spain) UGT Union General de Trabajadores (General Union of Workers in Spain) USL Unitarie Sanitarie Locali (Local Health Units of Italy)

Acknowledgements This monograph is the first to be entirely devoted to the analysis of social policy in Southern Europe and therefore fills an important gap in the available literature. The initial impetus for this book arose from an informal discussion Gabriella Lazaridis had with Professor Graham Room back in 1994, whereby a gap in the relevant literature was identified. We would like to thank Maria Koumandraki from the Department of Geography of the University of Dundee for helping us with locating some of the secondary material. We also thank Professor Russell King for giving permission to reproduce the table entitled ‘Population and Labour Force Characteristics of Southern European Countries, 1970–90’ (see Table 2.2), which first appeared in King and Konjhodzic, 1995, Labour Employment and Migration in Southern Europe, Sussex University discussion paper no. 19. We would also like to express our gratitude to Jo Morgan for undertaking the preparation of the final manuscript. GEORGE KATROUGALOS GABRIELLA LAZARIDIS

xiv

Introduction: The European South and the Welfare State

The analysis of social policy in Southern Europe has occupied a marginal place in European literature on social welfare. This monograph is the first in English to be devoted to the comparative analysis of social policy developments and welfare in the four southern member states of the European Union. It will be contextualised within the broader political, economic and social environments of these countries. The volume does not seek to encapsulate the entire Southern European region; other countries bordering on the northern coast of the Mediterranean which constitute part of the geographical region defined as ‘Southern Europe’, such as Cyprus and Malta, have not been included. Greece, Italy, Portugal and Spain have been selected because, although they have distinctive features, ‘they also share many experiences which give them an element of common identity’ (Williams, 1984: i), thus allowing us to group them together as a ‘family of nations’ (Ferrera, 1996: 18). It was not until recently (mid-1990s) that the academic debate started dealing in more detail with the study of the ‘South European Welfare State’. The famous studies by Flora and Heidenheimer (1982), EspingAndersen (1990) and Castles (1995) have paid lip service to the study of Greece, Portugal and Spain. Esping-Andersen (1990) for example, has included Italy in one of his three welfare types, but not Greece, Portugal and Spain. According to him, Italy is among the ‘corporatist welfare states’, where the state is less active in provision of welfare than the social democratic one, but more active than the liberal, which goes back to the historical precedent of the Bismarckian era, where the state granted certain social rights to citizens. He does, however, emphasise that there is ‘no single pure case’, as welfare in different countries often draws on a plethora of different principles and approaches. It was in the early 1990s that the idea came about that the four Southern European countries may constitute a separate cluster in the universe of welfare states. Leibfried (1992; 1993b) pointed out the existence of a ‘Latin Rim’ model of welfare, mainly characterised by rudimentary systems of social protection, a strong influence of Catholic tradition and a solid presence of family as a key welfare provider. These were seen as being ‘backward and xv

xvi Introduction

defective in forming and implementing their social policies, but will presumably follow along the lines of development of the “historical” firstcomer countries in the foreseeable future’ (Trifiletti, 1999: 50). Later studies have been critical of Leibfried’s work; some, like Trifiletti (ibid.) for example, for disregarding the way in which the historical development of certain policies has shaped their current form; others stressed the necessity of taking into account additional factors, like central questions concerning the pattern of capitalist development of these countries, class formation and the role of the state, the complex relations between statism, family support and soft-budgeting (Petmesidou, 1996b) and the influence of left-wing ideologies and presence of clientelistic networks (Ferrera, 1996). Taking into account some of these factors, Ferrera (1996) made out a case for considering these countries in terms of a distinctive Southern European model. This is identifiable less in terms of the specific mechanisms used for services than in the pattern and character of service delivery, which is closed, particularistic and strongly dependent on the relationship of patron and client. The role of the state is limited. In his view, the systems are not so much fragmented as polarised, with a sharply defined dualism distinguishing those who are best protected from the others. Despite these common features, the argument put forward in this book is that the institutional originality of the social protection system of the Southern European countries under study (in comparison to the state-corporatist model) is not enough to constitute a new, fourth world of welfare in Esping-Andersen’s typology. Anyway, there are important limitations to any type of classification, and most countries contain a mixture of competing paradigms rather than identification with a single model. Having said that, this type of analysis provides a useful method for discussing different types of system, and identifying the specific of welfare states in a comparative framework. One purpose of this book is to try and explore whether Greece, Italy, Portugal and Spain constitute a new model, or a separate cluster within existing welfare state typologies. The argument we put forward is that the Southern European welfare systems are underdeveloped species or a sub-category of the ‘state-corporatist’ welfare model; within this sub-category, one can identify two clusters, one consisting of the Iberian peninsula and another of Greece and Italy. However, the particular characteristics of each country make it rather difficult to talk about a ‘common’ pattern even within these ‘clusters’. For example, Italy urbanised earlier in the post-war period, while Greece and Spain did so in the 1960s and Portugal even later. Italy and Spain are more industrialised than Greece and Portugal, although there is a profound division between south and north Italy as to degrees of urbanisation and industrialisation. An additional point of differentiation is the exceptionally high rate of female employment in Portugal, similar to Scandivanian levels, which could be working against the traditional patterns of familism in this country.

Introduction xvii

These differences have influenced the response to social welfare demands. Italy, for instance, has the most highly developed social security system among Southern European countries (Trifiletti, 1999: 50) and an economic and social development comparable with the ‘core’ countries of the EU. Historical diversities in the formation of the political system and the social protection structures, differences in the levels and composition of unemployment, spatial differences in family composition and demographic ageing, female employment, the position of women in society and in the economic trajectories of these countries, are only some examples of the divergences within this group of countries, which have had an influence not only on policy priority, but also on policy structures and content. Moreover, although social policy institutions in Southern Europe may share similar characteristics, most of them common with those of other corporatist countries, the socio-political etiquette which inspires their functioning is hugely different. In the chapters that follow we will discuss in detail some elements which, according to Ferrera (1996), come to reveal an ‘unbalanced distribution of protection across the standard risks and … the various functions of social polity’. We examine the underdevelopment of family benefits and services and their impact in gendering the welfare state, the relatively high-protection of some categories of the population in terms of the relatively generous pensions and other benefits received in comparison to other underprotected cohorts of the population, such as the low-protection of the unemployed (especially due to the lack of a safety net for the uninsured) and of irregular workers and workers in the informal economy including non-citizens of the EU. We also look at the universalistic approach to health care systems. The above mentioned features have been influenced by challenges of both an internal and external nature that these countries have been confronted with. The external challenges stem principally from the processes of globalisation and from the European economic and monetary union, which exert pressures inter alia for economic and bureaucratic rationalisation, and for containment of costs in social expenditure in an era where tax increases are unpopular and not so effective as a means of increasing tax revenues, due to the relatively large size of the informal sector. The impact on budgetary constraints is exacerbated by the diminishing resilience of familism and of particularistic-clientelistic forms of subsidisation. Hence, lack of financial means to subsidise social policies is an important factor but cannot be put forward as the only justification for the unbalanced development of these countries. Trifiletti (1999: 50–1) argues that a particular sensitivity to a small number of what she calls ‘first order social risks’ (that is risks against which the family cannot adequately protect itself, such as the risk of death and the risk of losing a steady job) are perceived as risks that can potentially damage the ability of the family to function as it has done, that is to provide a buffer zone against other types of social risks against which more

xviii Introduction

developed welfare systems mobilise resources. This sensitivity to a small number of ‘risks’ has been persistent in all four countries and is reflected in policies formulated, despite their fragmentary nature. Also reflected is the vulnerability of public institutions to partisan pressures and manipulations. Welfare manipulation often takes the form of political clientelism – especially in Greece and Italy – where favours (such as a job in the public sector, assistance in obtaining a subsidy from the welfare bureaucracy) are exchanged for votes. This is facilitated by the presence of a ‘soft’, nonWeberian state in terms of bureaucratic professionalism and autonomy, partisan penetration of welfare administration, personal links and the presence of patron–client networks. The failure of these nations to ‘modernise the civil service in a “Weberian” sense prior to the mass expansion of welfare programmes’ (Ferrera, 1996: 30) and the reputation for ineffectiveness and corruption, administrative lethargy and defective policy co-ordination has profound implications for their capacity to respond to new challenges from the EU to the development of national policies in Southern Europe. The institutional commonalities which span the southern countries derive to an extent from their relatively recent and rapid economic growth and development. The most important difference between the countries of Southern Europe and those of Continental Europe is the late industrialisation of the former and their rapid change from mostly agrarian societies to ones strongly oriented towards the service sector. Southern Europe had a slow rate of decline in the number of agricultural workers if compared to other parts of Europe, followed by a jump to services without prior peaks of employment in industry. ‘Late industrialisation, insufficient penetration of market mechanisms and the overwhelming presence of the state in social and economic life are all factors which have been decisive in forming the economic and social life of these countries’ (Sapelli, 1995: 10). The pace and degree of industrialisation has not been uniform throughout Southern Europe; the experience of the Basque region, Catalonia and Navarra in Spain, and Emilia Romana, Veneto, Lombardy and Piemonte in Italy, for instance, differs from that of southern Italy, Greece and Portugal, where agrarian structures were extensively reproduced and the jump from agriculture to services more pronounced (Petmesidou, 1996b: 98). The rapid shift to post-Fordist economic and social structures from the mid-1970s onwards, took place prior to Fordist production and the accompanying patterns of collective solidarity and universalist social citizenship being fully developed (ibid.). The large numbers of self-employed – amounting in Greece to 46.7 per cent, in Italy to 28.7 per cent, in Portugal to 27.3 per cent and in Spain to 26.4 per cent of the working population in the mid-1990s (Eurostat, 1995d) – the large informal sector, reaching 45 per cent of GDP in the Greek case, and the multiple employment, allow for high employment flexibility. In this environment, collective forms of solidarity and universalism in

Introduction xix

welfare provision tend to be relatively weak. The historical and socio-political peculiarities of the Southern European countries can be said to reflect economic, structural and institutional differences between the four; such differences are important elements of our understanding of the nature of these systems, the reasons why the welfare state in these countries developed only to a limited extent and their future prospects. As we show in this book, in none of the four countries are the welfare reforms adequately introduced to meet the needs of those who have been penalised as a result of demographic changes, changes in the labour market, in family and employment patterns, the uncertainties surrounding the future of economic growth as well as ideas from the EU of how welfare should be provided and administered. Are national governments likely to change their approach to welfare provision? It depends on pressures from outside (EU mainly) and below (society). In the present economic and demographic climate of recession and increase of the elderly population, these pressures are becoming more real and stronger than ever before. The book was written jointly. The initial idea and plan for the book came from Gabriella Lazaridis, who also undertook the cumbersome tasks of finding a publisher and editing the various drafts. The preparation of the first draft of chapters on gender and family, employment/unemployment and migration patterns rest with Gabriella and the first draft of chapters on typologies of welfare regimes, health and pensions rest with George Katrougalos. We are therefore jointly responsible for any errors and any weaknesses of the book. We discuss the development of and major reforms in health care, social security benefits, social assistance, and make references to personal social services where appropriate; we also analyse trends in the labour market, unemployment, demographic and family changes. The themes covered do not exhaust the list of possible topics of analysis. Little is said, for instance, about education, housing, new emerging forms of personal social services in Southern Europe. Equally little attention is paid to how social policy might develop in the future; this will depend on how different governments of different political orientations tackle a plethora of political, economic, fiscal, social and cultural problems faced by the welfare states in Greece, Italy, Portugal and Spain. Moreover, this book was more or less completed at the end of 2001, but some of information has been updated at the proof stage. However, the shortage of primary official data, most of which are published with a considerable delay, did not enable us to provide in all cases up-to-date data. However, as our principal goal is to demonstrate the general trends and salient characteristics, we feel that this has not affected our analysis. Thus, comparative analyses of Southern European social policies remain a potential fertile area of further investigation and analysis and are likely to assume increasing importance within the European Union, because of increasing pressures for welfare expansion in

xx Introduction

an era when the future of economic growth is uncertain and the ideas of how welfare should be provided and administered ample. We hope that this book will make some contribution in illuminating the profound but little-analysed developments in social policies within the European South from a comparative perspective, and the understanding, from a comparative perspective, of some of the forces that have affected and continue to affect the development of social policy in these countries.

1 The Southern Welfare States in the European Context

Introduction In recent years there has been an explosion of models and classifications which try to depict the peculiarities of the Southern European welfare states. These seem somehow disproportionate to the narrow base of statistics and the amount of existing research (based on primary data) on social policy in the area. Although typologies are not a panacea for the analysis of welfare structures, they can be useful not only for understanding how the social security systems in these countries work but also for demonstrating the inherent weaknesses of the systems and for suggesting remedies for these. In this chapter, we shall first look at the problem of the specificity of a ‘South European’ deviation from other welfare models. Within this framework, after having examined and criticised the principal theoretical models of welfare, we shall proceed to the drawing of an outline of the principal characteristics of the welfare structures of the Southern European member states of the European Union. We will argue that these welfare systems all share the basic institutional characteristics of the ‘state-corporatist’ welfare model. However, the delayed founding and overall underdevelopment of the welfare state in the area, together with a number of similarities in social structures and economy, clearly place the Southern European countries in a distinctive sub-category of the model. Within this sub-category, two clusters are discernible, one made up of the Iberian countries and the other Italy and Greece. Different historical traditions and, especially, the dissimilar weight of patronage and clientelism are the main factors of this differentiation. As recent literature suggests, there are arguments in support of a distinct South European welfare model. Even authors who had in the past declared themselves ‘agnostic’ on the existence of a separate ‘South European Welfare State’ seem to have been converted (Rhodes, 1996; Rhodes, 1997a). However, the answer to this question largely depends on the criteria used in the analysis and the classification that these imply. The simplest imaginable typology, for instance, would be the traditional opposition between ‘Beveridgean’ 1

2


systems, based on the idea of universal entitlement according to need and ‘Bismarkian’ ones, based on work performance and the insurance principle. However, this classification (within which all South European countries under consideration here should be classified as Bismarckian, as their social systems are insurance-based) is neither useful nor functional. This is due first to the generality of the typology and second the general trend of convergence between these two initially diametric poles. Whereas in the beginning, the insurance schemes were obligatory only for some categories of the working population (principally these of low income who could not spare money for their non-productive years), the gradual expansion of the insurance and the achievement of full employment have left relatively few people uncovered. Moreover, even universalistic welfare states, such as the Scandinavian ones, have introduced social schemes partially funded by contributions. The European Commission (European Commission, 1997c) has adopted another descriptive typology, which divides its member states into four groups, the basic criteria being the financing of the social protection systems by the insurance principle or by taxation and their overall maturity. In this typology, Greece, Spain and Portugal form a model of their own, not because they have institutional originalities but because their welfare structures are still in their infancy. Italy, on the contrary, is part of the group of the more mature European welfare states based on insurance, like France, Belgium or Germany. However, the categorisation that seems to embrace multiple criteria in the most comprehensive way is the influential division adopted by EspingAndersen (1990) in three archetypes, the ‘three worlds of welfare capitalism’:

1. The Scandinavian or Social Democratic model, which is that of a ‘public service state’ essentially financed by taxes, characterised by the principle of universality and the public provision of services rather than the distribution of cash incomes. As most of the flat rate benefits are universal, entitlement to them is an extension of (social) citizenship. 2. The Continental ‘state-corporate’ model, which is ‘a distribution state’, mainly financed by the contributions of employers and employees in work-based insurance schemes and characterised by social transfers in cash, related to earnings. Entitlement to social rights is founded on social status and work performance. 3. The liberal, Anglo-Saxon model, which is tax-financed, with its main features being universality, but also means-tested services and relatively low flat-rate benefits. The model is characterised by the residual character of the social protection mechanisms vis-à-vis the market.

Southern Welfare States 3

Within the framework of this classification and from an institutional point of view (regarding the scope, the financing and the underlying organisational features, as well as the central issue of ‘de-commodification’, i.e. the degree to which social rights do not depend on the rules of the market), it is difficult to perceive a fundamental, structural difference between the South European countries, and the standards of the Continental model. The scope of the social protection system in these countries is not universalistic but categorical and work-focused, the benefits being calculated on the basis of salary and insurance contributions. (There is an important exception related to the health protection system, to which we will refer later on.) Moreover, the overall effectiveness of the social protection systems in Southern Europe is minimal and its scope of protection far less comprehensive than in the other, more socially advanced EU member states, often failing to guarantee income maintenance. In addition, Greece, Spain and Portugal – but not Italy, with the exception of the South – form a distinct group of ‘laggards’ with regard to social spending, despite the extraordinary increase of social expenditure in the 1980s (see Figure 1.3, p. 20). Due to this specificity, some scholars (Leibfried, 1992; Kosonen, 1992; Abrahamson, 1992; Bislev and Hansen, 1991) have added to the Esping-Andersen classification a fourth, rudimentary South European or ‘Latin Rim’ model, in which the welfare state is a ‘semi-institutionalised premise’.

A distinct Southern European or ‘Latin Rim’ model Leibfried was among the first to propose the existence of a Southern model (Leibfried, 1992). He suggested that Southern European countries are close to the Anglo-Saxon model in the sense that they favour entry into the labour market and offer residual protection measures. Moreover, they are marked by the decisive influence of the Catholic Church; they have economic structures in which agriculture is still important and they have strong traditional families which play the role of a primary safety net. Due to these features and the overall delay of the establishment of welfare structures, the welfare state in Southern Europe still remains a half-institutionalised premise. Of all these points, one is incontestable. This is the delay in the construction of the welfare state, which reflects the relative economic underdevelopment of the Mediterranean European South. There is also a clear correlation between low social expenditure and low GDP (Eurostat, 1993b). All the other presumed characteristics are far more disputable. The biggest misunderstanding of all is its purported resemblance to the liberal model. The residual character of social protection in Southern Europe results from the state’s inability to satisfy social needs, and not from an inherent confidence in the self-regulation of the market and individual thrift, as in the liberal model. Not only was there never a deeply embedded belief in market

4


self-regulation and efficiency, but generally market forces have always been traditionally very weak and state-protected (Petmesidou, 1991). The distinctive feature of the model cannot be Catholicism either. Greece is not a Catholic country and, unlike the Catholic Church, the Greek Orthodox Church does not play a significant role in welfare services. The Greek Orthodox Church has never explicitly favoured a particular political formation, nor has there ever been a Christian-Democratic party in Greece. Moreover, different patterns of relationships with the state and the civil society did not allow the development of large-scale institutionalised voluntary organisations, as in the countries of the Latin Rim. In Greece the intervention of the Church in social matters is generally limited to the level of philanthropic assistance.1 There are other reasons that Catholicism cannot be a distinctive element of such a model. First of all, the influence of the Catholic Church is not exclusive in this area, but it constitutes a significant characteristic of the Continental model itself (Esping-Andersen, 1990: 39; Wilensky, 1982). Even the principle of subsidiarity is shared by core countries of the European Union like Germany where, in addition, it is considered to be a constitutional principle.2 Moreover, as shown in Figure 1.1, the cultural and ethical influence of the church is of equal, if not of greater importance than in many other European countries.3 Finally, the unquestionable influence of Catholicism has always been paired with an important movement towards the secularisation of social policies, as demonstrated in the examples of the laws of 1836 in Spain (Estvill, 1992; Morena and Sarasa, 1991) and of 1890 in Italy (Ascoli, 1992), that transferred the responsibility for the supply of services from the church to the local authorities.

Persons saying they have confidence in the Church 80 70 60 50 40 30 20 10 0 SP

GR*

IT

IRL

BEL

DK

GER

FR

NETH

Figure 1.1 Confidence in the Church Note: * For Greece the data is from 1997. Sources: Listhaug (1984: 115); for Greece, V-Project Research Consulting (1997).

UK

USA


With regard to socio-economic structures, as already illustrated in the introduction, it is true that Spain, Greece and Portugal, but not Italy, are still lagging behind the European average, but they are fast leaving behind traditional, pre-capitalist patterns of economic organisation. The decline of the agricultural sector is highly indicative of this trend. Whereas, for example, one in four Greeks and almost one in five Spaniards were employed in the primary sector in the 1980s (Katrougalos, 1996) these figures had fallen in the 1990s by more than half. In 1997 only 8.4 per cent of the active population in Spain and 13.7 per cent in Portugal worked in agriculture. The respective figures for Italy and Greece were 6.8 per cent and 20 per cent (UNDP 1999a: 184; World Bank, 1999). Admittedly, all countries have common patterns of familism and strong kinship networks (see Chapter 3). Still, due to economic development, the traditional familism seems to be in crisis and there is a clear trend towards the ‘nuclear’ family. Moreover, the increase in female employment, especially in Portugal (OECD, 1999d), and the move towards a new, two-earner, double-career family model is gradually replacing the old one which was based on the male breadwinner. Kosonen (1992) suggested a ‘peripheral’ model, which would include Spain, Portugal, Greece and Ireland, which allegedly have in common the low level of social expenditure, the insurance principle and many traditional characteristics with regard to the role of women. However, the classification of Ireland in the same institutional family with the three other countries does not look very convincing. Regarding both its structure of social protection receipts (tax-financed, see Table 1.9, p. 26) and its scope of benefits (semi-universalistic, see Table 1.8, p. 26), it is clear that Ireland belongs to the same group as the United Kingdom, namely to the liberal model, also shaped by the strong Beveridgean influence.

The ‘semi-peripheral’ or ‘welfare society’ model Another approach suggests the existence of a semi-peripheral welfare state. This follows Wallerstein’s paradigm of semi-periphery (Wallerstein, 1974; 1984), according to which countries of ‘intermediary’ or ‘late’ economic development, like Portugal, Spain, Greece, Mexico, Brazil and even Taiwan and Korea, constitute a group with distinct economic and sociological features, where Fordist industrial relationships have never been fully consolidated. According to the argument, shared mostly by Portuguese writers (Santos and de Sousa, 1994; Hespanha, 1999) but not exclusively (Marinakou, 1998), the main particularity of the semi-peripheral model is the existence of a weak welfare state in a strong society of solidarity. The most distinctive feature that differentiates this ‘welfare society’ from the traditional, institutionalised model of the welfare state is the survival of an informal societal network of support, based on family and kinship relationships. Santos and

6


de Sousa use the term ‘quasi Welfare State’ or ‘lumpen-Welfare State’ (Santos and de Sousa, 1994: 27). The first term is shared even by official texts, such as the Portuguese White Book of 1998 on Social Security Reforms (Livro Branco da Seguranca Social). This model has the advantage of focusing on some peculiarities of the least developed social security systems of the European South, correlating them with the positioning of these countries in the world economic system. Of course, the logic of the argument does not allow Italy, or eventually even Spain, to be classified in the same group as Portugal and Greece. Italy is undeniably a ‘core’, not ‘semi-peripheral’ country, being one of the G8, the eight most industrialised countries of the world. Nevertheless, this argument is not especially enlightening regarding the institutional and organisational features which would differentiate the ‘semi-peripheral’ model from the others. It is characteristic that only Santos et al. (Santos and de Sousa, 1994: 53), somehow en passant and without extensive justification, write that the Portuguese welfare state is closer to the Scandinavian paradigm than the Continental one. Furthermore, regarding the bonds of societal solidarity,4 considered the most characteristic feature in the semi-periphery, the crisis of traditional familism and kinship entails the weakening of the informal, personal networks. It is characteristic that even the authors of this school recognise an emerging ‘crisis of cultural legitimacy’ of the existing family model (Marinakou, 1997).

Ferrera’s ‘Southern European Welfare State’ Perhaps the most influential argument about a ‘Southern European Welfare State’ has been put forward by Ferrera (Castles and Ferrera, 1996; Ferrera, 1996; 1997; 1999). He and others following his argumentation (Rhodes, 1997a; Guillen and Matsaganis, 2000), define the basic characteristics of the model as follows: 1. A highly fragmented and ‘corporatist’ income maintenance system, displaying an internal polarisation: peaks of generosity (especially regarding pensions) for privileged strata of the population (for example public functionaries) coexist with gaps in protection. An important fraction of the population remains without effective social coverage, especially the formerly employed and the unemployed, those in flexible forms of employment (temporary, part-time) and those working in the informal sector or having irregular jobs (Castles and Ferrera, 1996). 2. A low degree of state penetration of the welfare sphere and a highly collusive mix between public and non-public actors and institutions. For instance, the national health system staff are allowed great margins of freedom to render services on a private basis and even the NHS itself


3. 4.

5.

6.

7.

contracts out to private health centres (the Spanish conciertos, the Italian centri convenzionati). Public institutions also display a low degree of state power proper, as they are highly vulnerable to partisan pressures and manipulations. Moreover, southern welfare systems have traditionally emphasised civil society solutions such as church, family and private charity in combination with parallel public institutions, providing, in other words, a ‘rudimentary welfare state’ (Rhodes, 1997a: 316). The strong influence of the Catholic Church. The persistence of clientelism and the formation of elaborate ‘patronage machines’ for the selective distribution of cash subsidies (Ferrera, 1996: 17ff). A differentiation between the corporatist traditions in the field of health care and the establishment of national health services based on universalistic principles. The lack of an efficient, rational, Weberian type administration, the ‘uncivicness’ of political culture and the weakness of civil society which result in the bureaucratisation and the legislative over regulation of the system (Niero, 1996: 118; Ferrera, 1997: 149, 235). The prominence of parties as the main aggregators of social interests and the existence of a radical Left, not allowing the formation of consensual policies.

Most of those points do reflect the situation in the European South, especially in Italy and Greece. Despite this fact and although this model generally avoids the oversimplifications of other similar propositions, there are several points that need to be raised. It is to these that we now turn our attention.

A critical approach to Ferrera’s South European model 1. There is an inherent methodological inconsistency in the argument, at least with regard to the Esping-Andersen typology. It should be clear that if one accepts the typology of the ‘three worlds of welfare capitalism’ as a system of reference, one should use its criteria in order to add a fourth one. This is because every classification is a descriptive system that attempts a generalisation of common features, using some predefined criteria, in order to be used as a heuristic tool for drawing a topology of common features and further identifying problems and trends. However, the ‘Latin Rim’ model is not actually based on EspingAndersen’s criteria, but on a different framework of socio-political data. As we have seen, Ferrera has introduced a new set of political and sociological parameters that differentiate the Southern European countries inside the state-corporatist model. Therefore his propositions do not actually imply

8


the existence of a new model, but merely suggest the existence of a subvariation within the structural matrix of the existing ones. Consequently, the question is not whether there are any particularities of the South European model in comparison with the continental statecorporatist archetype (of course there are), but whether these particularities, by reference to the above mentioned criteria and not exogenous others, could be seen as constituting a distinct model. To this purpose, a re-reading of Esping-Andersen is highly illustrative of the characteristics of the Southern welfare states. It is true that the author has included only Italy in the set of his comparative data and in a less well-known essay has expressed doubts as to whether until recently Spain and Portugal had genuine welfare states (Esping-Andersen, 1992). Still, it should be clear that according to his classification, all four countries are typically state-corporatist. 2. There are a number of substantial reservations concerning the fundamentals of the proposed model. To begin with, some of the proposed features (clearly among them corporatist fragmentation, the public deficit in welfare provision and the influence of the Catholic Church) are shared by the other Continental states. Some, however, are not common to all four Southern countries, at least to the same extent (for example, the tradition of clientelism and patronage). It is true that some of the features common with the other countries of the Continental model are found to a superlative degree in the European South. For instance, one sees the hyperfragmentation of insurance funds in Italy and Greece and the resulting huge inequalities (see Chapter 4). Still, the degree of corporatism is, by the explicit definition of Esping-Andersen, determined by the number of major occupationally distinct pension schemes. It is not only Italy and Greece, but also France which are characterised by a strong degree of occupational fragmentation as well as by a dualistic system of social protection. Portugal, on the other hand, offers a clear example of a relatively low degree of fragmentation (Ferrera, 1996: 19). The same is true with regard to the treatment of the ‘selective generosity’ of the pensions for the privileged strata of the population, usually public functionaries. Naturally, by definition, civil service pensions are occupational in nature. According to Esping-Andersen, the special treatment of civil servants ‘reflects the legacy of etatism and corporate privilege’ throughout the whole conservative model (Esping-Andersen, 1990: 81) and the degree of ‘etatism’ of a social protection system is measured by the expenditure on government employee pensions as a percentage of GDP (ibid.: 73). Furthermore, according to Esping-Andersen, in all the corporative state-dominated insurance systems, preservation of status differentials is a key element and social security is ‘highly occupationally segregated with particularly pronounced civil-servants’ privileges’ (ibid.: 26, 85–6). 3. The influence of the Catholic Church as a distinctive feature of the model has already been criticised above in relation to Leibfried’s


classification. Still, the ‘Catholic factor’ contributes to a trend analysed further below, that is an internal differentiation of the Southerners into two separated clusters, comprising Italy and Greece on the one hand and Spain and Portugal on the other. As we shall demonstrate below, the Iberian social protection systems, under the additive influence of absolutism and corporatism, have typically been shaped by the Catholic Church’s fundamental encyclical principle of subsidiarity (Subsidiarium Officium). According to the latter, the state intervenes only when the individual or family capacities are exhausted (Morena and Sarasa, 1991). This concept has never been influential in Greece, where the state has always been considered an employer of first resort, public employment being the optimal carrier option (see Chapter 2). Nevertheless, the subsidiarity principle is not the sole element of Catholic social thought.5 Equally important is the emphasis on a Catholic version of corporatism that impregnates many Catholic encyclicals (cf. especially the ‘Quadregissimo Anno’ of Pius XII, 1931) and has exerted a major influence on the authoritarian and fascist regimes of the Iberian Peninsula. The most characteristic corporate charters of Catholic influence have been the Portuguese Constitution of 1933 and the Spanish ‘Fuero de los Espanoles’.6 The latter attributed large competence of public law to the syndicates and associations and established a corporate assembly. The integration of the corporations inside the state had also been the dominant form of the administrative and economic organisation in fascist Italy;7 still, the absence of long authoritarian rule resulted in a different socio-political mixture, where clientelism was a much more important factor than corporatism. 4. The establishment of national health systems with universalistic aspirations has been proposed as a decisive factor of differentiation, resulting in ‘an original mix of corporatism and universalism’ (Ferrera, 1997: 29). The assumption of universalism as a distinct characteristic of the model based on this sole element, however, seems exaggerated. First of all it is a relatively recent feature. It was not until the late 1970s that Italy adopted a universalistic approach in this area and the other three Southern European countries followed during the next decade. Moreover, universality still remains a halfinstitutionalised premise. For instance, the Portuguese National Health Service covers approximately 75 per cent of the population; the remaining 25 per cent, especially those in the civil service and the military, participate in special additional occupational schemes (Gouveia Pinto, 1997: 142; see Chapter 5). Even in Spain, where coverage reaches 98.5 per cent of the population, of which 93 per cent are covered by the ‘compulsory’ insurance scheme, 1 per cent obtain means-tested subsidies from the state and 4.5 per cent of the population, mostly civil servants, are insured through special schemes (Jakubowski, 1998). The basic difference of a universalistic health system when compared to an occupational one lies in the funding of the former by taxation and the

10 Southern European Welfare States

latter through the social insurance. Still, the Southern NHS are not completely emancipated from social insurance, which, especially in Greece and Italy, funds about 40 per cent of total expenses (see Chapter 5). Moreover, the institutional characteristics of the NHS are not sufficient to distinguish the South Europeans from the other countries falling under the ‘Continental model’ states, as they are not uniform in all Southern countries (see Chapter 5). 5. Clientelism has been suggested as a permanent feature of the political system and the system of social protection. This factor is clearly predominant in Greece and in Italy but much less so in the Iberian countries, which have a different, more corporatist tradition. It seems that in Spain and Portugal clientelistic policies are embedded only in some geographical areas and special sectors (for example invalidity pensions). For this reason, in the words of Garcia (1999: 158), ‘clientelism should not be considered as a universal cultural characteristic of Southern Europe’. On the contrary, in Greece and in Italy, it has not been traditional corporatism but patronage that functioned as a substitute for the welfare state, establishing vertical, instrumental channels of articulation of demands (Tsoukalas, 1986; Mouzelis, 1978; Filias, 1981; Fargion, 1997).8 Epecially in Greece, the Catholic – or the fascist – corporatism, which meant to integrate the individual into an organic entity, has been completely alien to the dominant societal ideology, despite the efforts of the short-lived dictatorship of Metaxas (1936–40). Therefore, each professional group attempts to create special linkages and relationships to the public power in an ad hoc and not ‘organic’ manner and this process results in an acute political incrementalism (Petmesidou, 1987; Ascoli, 1987). Within this framework, special relations develop between the state and interest groups, primarily within the public sector. With regard to Greece, one should also take into account the fact that after the civil war (1946–9) the state tried to directly manipulate the organisations of the working class, by dismantling leftist trade unions and establishing state-funded ones, in order to marginalise the influence of the Communist Party. This effort resulted in a dual syndicalism, marked by the parallel existence of official, state-supported and ‘dissident’ trade unions, a factor accentuating the polarisation of political life. For this reason, the proliferation of insurance and pension funds in Greece and Italy should not be seen as a result of traditional corporatism but as a by-product and outcome of clientelistic networks of state patronage. There are cases where special insurance ‘privileges’ have not been provided to a friendly clientele, but were the outcome of a long struggle of an ‘outsider’ trade union (the case of the strong trade union of Greek construction workers is typical, traditionally under the hegemony of the Communist Party). In the latter case these ‘privileges’ are nothing more than a form of deferred wages (Esping-Andersen, 1990: 81).


However, in both Italy and Greece, the expansion of a highly fragmented pension system has been used generally for distributing differentiated entitlements to selected party clienteles.9 On the contrary, the extended authoritarian rule in Spain and Portugal resulted in a different pattern of a state-dominated system, characterised by the exclusion of organised interests and a more uniform ‘state charity’ pattern of welfare (see Santos and de Sousa, 1994; Guibentif, 1997; Rhodes, 1997a: 9). Hence, the strength and durability of absolutist rule has been a decisive factor of differentiation between the countries of the South. Greece has known shorter intervals of dictatorial rule – eleven years in total from 1936 to 1940 and from 1967 to 1974 – compared to almost four decades in Spain and Portugal. The fascist rule in Italy also lasted for a long period, but since the end of World War II the country has had a normalised political life. Accordingly, the four countries could be grouped into two clusters, one (clientelism dominated) comprising Italy and Greece10 and the other (corporatism dominated) comprising Spain and Portugal. This different political legacy also determines the possibilities of consensusbased neo-corporatist arrangements of welfare reform, which are much easier to undertake in Spain and Portugal than in the other two countries. It is illustrative of the fact that in Portugal, the social partners have agreed on five similar ‘pacts’ since 1987. The last of these (1996) links employment promotion measures with numerous social security and fiscal reforms, including minimum incomes and favourable tax treatment of health, education benefits and old age pensions (Rhodes, 1997a). 6. The most important flaw of Ferrera’s model is its ‘Italian bias’, that is a projection of the characteristics of the Italian system to the other three countries. This is clear, for instance, with respect to Ferrera’s central argument about the ‘iper garantismo’, the purported ‘super generosity’ of the pensions systems as an essential peculiarity of the ‘Southern Welfare System’. Prima facie this assumption is not unsubstantial. The net replacement ratios for pensioners in the four southern European countries are, nominally, among the highest in the EU. Nevertheless, taking into account the fact that in Greece, Spain and Portugal the wages are substantially lower than the European average and often very close to the poverty threshold, it is understandable that lower replacement ratios would not ensure the survival of the recipients. The real situation of the level of pensions is far from being ‘generous’, for all countries except Italy. As demonstrated in Chapter 4, with reference to calculation of the pensions benefits in PPS (Purchasing Power Standards), the Italian pensioner receives 135 per cent of the average benefit in the EU, while his Greek counterpart gets only half and the Portuguese a third of this amount (Eurostat, 1994c). Admittedly, there is an important inequality between various categories of pensioners in the South, especially in Greece and Italy. More specifically,


some employees of the public sector maintain important advantages with regard to the contributions period and the replacement rate in comparison with the blue-collar workers of the private sector. Still, similar gaps between ‘high’ and ‘low’ protection constitute a general characteristic of the Continental model. As Esping-Andersen has demonstrated, it is generally in the ‘corporatist’ welfare states that the allocative (risks versus needs) and distributive (protected versus unprotected) implications of the model have resulted in a real gap between a clientele of strongly covered ‘insiders’ of the market on the one side, and growing numbers of underprotected ‘outsiders’ on the other (Schulte, 1999: 212). Accordingly, the ‘iper garautismo’ hypothesis is not completely true for Greece, nor probably for Spain or Portugal (see Chapter 4). 7. If one avoids the pitfall of regarding all Southerners as replicas of the Italian case, and focuses the analysis on the overall structure and scope of their social protection system, one will see that Italy and Greece share a lot of similarities not common to the Iberian countries. As shown in Figures 1.2 and 1.5, in those countries the state provides disproportionate benefits for the old and for survivors, while it grants lesser protection for health and minimal coverage for family and child care (see Chapter 3) or other risks (Anttonen and Sipila, 1996; cf. Ferrera, 1997: 233). This disproportionate distribution of social security benefits in favour of the old age pension is a salient characteristic both for Greece and Italy, which actually tends to become aggravated over time. In 1999 for instance, in Greece, the respective figures were as follows: Pensions 71.06 per cent, Social Assistance 5.21 per cent, Health 18.88 per cent, Other 4.85 per cent (Greek Social Budget, 1999: 25). This situation is the corollary of the competitive mechanics of polarised pluralism, which in both Italy and Greece during the post-war period facilitated the development of similar patronage practices aimed predominantly at increasing the pension benefits of various professional categories. This took place to the detriment of less particularistic goals associated with the general interest (such as the development of a network of social services in the fields of health or day care). The dissimilar political situation in the Iberian countries has produced different outcomes. The structure of benefits in both Spain and Portugal is much closer to the European median and, generally, more balanced. Portugal, Ireland and Netherlands are the only countries of the EU where the health benefits are more important than old age/survivors’ benefits (Eurostat, 1994b; 2000b). It is noteworthy that the revised, unified data of the ESSPROS (European System of Social Protection Statistics) offers ever more substantial support in favour of the lack of any important deviation between the European South (even concerning Italy and Greece) and the state-corporatist model (ESYE, 2000). According to this data (Tinios, 2000: 24) the cumulative percentage of old age and survivors’ benefits in Greece, for instance, represented 49 per cent of total social expenditure for 1996, in comparison

Southern Welfare States 13 Spain

Portugal

Greece

Italy

Old age-survivors Unemployment

Health Family-Maternity

Figure 1.2 Social protection benefits by function, 1997 Source: Eurostat-ESSPROS (2000).

to 45 per cent for the EU average. Therefore, as Tinios argues, this new evidence shows that one of the basic arguments of Ferrera is based on ‘a statistical misunderstanding’ (ibid.: 30). 8. The same internal differentiation of the Southerners into two clusters is also discernible with regard to other proposed features of the model, such as the lack of an efficient, rational, Weberian-type administration, and the persistence of incidents of corruption. Of course it is not possible to accurately define the degree of rationalisation or corruption of the administrative system. Still, there is some evidence of different patterns in this field amongst the four countries. An indication of this differentiation could be found in the Corruption Perceptions Index, elaborated by the Berlin-based international nongovernmental organisation Transparency International. This represents the average scores which individual countries have been given by various independent surveys, carried out by institutions such as Gallup International, the World Bank or the University of Basel. In the index there are three figures given for each country. The first is its overall integrity (or corruption) ranking (out of ten). A ten equals a perfectly transparent country while zero equals a completely corrupt one. The third column indicates the number of surveys in which the particular country has been included. A high number


indicates a high degree of deviating opinions. The second column indicates the variance of the rankings in different surveys. According to this index, the four Southern countries score in two easily discernibly clusters: Portugal and Spain score above the median of the scale (five), even better than France or Belgium. On the other hand, Greece and Italy rank behind all the other EU countries, with a score below five. As shown in Table 1.1, the comparison with the respective data for 1995 reveals that this is a constant trend. 9. A comparable situation exists with respect to the degree of ‘etatism’. Italy and Greece, much more than the other countries, are characterised by a contradictory situation. The public deficit in the field of social protection coincides with the strong presence of the state in most sectors of economic and social life. This prima facie paradox is the direct corollary Table 1.1 Perception of corruption of the administration in selected European countries, USA and Japan Country rank in 1999 1 2 5 8 9 11 13 14 17 18 21 22 25 27 29 31 36 38 39

Country rank in 1995 2 4 6 5 9 10 8 19 12 13 11 16 15 22 18 26 20 – – 19 28 30 33 –

Country

1999 CPI score

Denmark Finland Sweden Iceland Netherlands Norway Switzerland Luxembourg United Kingdom Germany Ireland Austria USA Portugal France Spain Japan Slovenia Estonia Belgium Hungary Greece Italy Czech Republic

10.0 9.8 9.4 9.2 9.0 8.9 8.9 8.8 8.6 8.0 7.7 7.6 7.5 6.7 6.6 6.6 6.0 6.0 5.17 5.3 5.2 4.9 4.7 4.6

Source: Transparency International (1999).11

Standard deviation

0.8 0.5 0.6 1.2 0.5 0.8 0.6 0.9 0.5 0.5 1.9 0.8 0.8 1.0 1.0 0.7 1.6 1.3 1.2 1.3 1.1 1.7 0.6 0.8

Surveys used

9 10 10 6 10 9 11 8 11 10 10 11 10 10 10 10 12 6 7 9 13 9 10 12


of the predominance of patronage policies, which compel the state to intervene sporadically and without any predefined strategy in every aspect of socio-economic life, not in order to regulate it rationally, but rather to satisfy an ephemeral clientele. Thus, in a strange way, there is neither economic liberalism, nor this modicum of social security for all, which ensure maturer interventionist welfare states. This is clearly shown in Table 1.2, which presents the results of a survey co-published by 47 institutes worldwide of similar neo-liberal aspirations, comparing economic freedom in 115 countries from 1975 to 1995. Despite the ideological bias of the survey which demonstrates the advantages of the ‘free economy’, it is useful in showing trends and practices in this field. It has used 17 objective variables, including inflation variability, government consumption and taxes on an international trade study. In the second column the rating of the countries appears on a scale of one to ten, with one being least economically liberal, and ten being most liberal. In the third column their world ranking appears. Again Spain and Portugal form a cluster of their own, scoring close to the average of the European Union, close to the level of countries such as France or Austria (Denmark and Sweden are clearly different cases, because of their overdeveloped welfare services). Italy and Greece occupy the two last positions. This fact is also reflected at the level of collective values and views on the role of state. In Portugal, for instance, the majority of the population think that it is not the state but private citizens who have the primary responsibility for individual welfare (Hespanha, 1999: 134, quoting Table 1.2 Indices of economic liberalism in EU countries Countries United Kingdom Netherlands Ireland Germany Belgium Finland France Austria Portugal Spain Denmark Sweden Italy Greece

Rating

World ranking

7.3 6.5 6.5 6.4 6.3 6.1 6.1 6.0 5.9 5.9 5.9 5.9 5.5 5.0

(7) (21) (21) (25) (29) (36) (36) (41) (42) (42) (42) (42) (55) (64)

Sources: Fraser Institute (1997); Gwartney and Lawson (1997).


Franca). In Greece we see the opposite. Here it is the state which is seen as responsible for the fulfilment of basic needs, mostly through the network of clientelistic relationships (Petmesidou, 1991). In Greece, total government expenditure now exceeds 50 per cent of GDP, almost twice the level of 1975 and this growth has led to persistently large budget deficits, especially during the 1980s. The situation is similar in Italy, where budget deficits have been exceedingly large in recent years, although at a somewhat lower level than in Greece (see Table 1.3). 10. Southern Europe, predominantly Greece and Italy, is also characterised by the existence of a huge informal economic sector, a ‘grey’ or ‘black’ market economy,12 often protected by corrupted sectors of the administration (Morin, 1990). In Spain and Portugal this hidden economy is estimated to constitute some 15–22 per cent of GDP (Bermeo, 2000a: 270), while the percentage for Greece could be approximately 30–45 per cent (Canellopoulos, 1995; Eurostat, 1995a; Petmesidou, 1996b) (see Chapter 2). For Italy the respective figures are likely to be closer to those of Greece than of those in the Iberian countries (Ferrera, 1997). The income from these activities can act as a safety valve against poverty in a way not revealed in official statistics. On the other hand, because of its irregular nature, it distorts the normal functioning of the market and favours administrative corruption, whereas the implied tax evasion does not permit the state to invest the necessary resources in welfare expenditure.

The South European ‘variant’ as a sub-category of the state-corporatist model One cannot but agree with Ferrera that the ‘conservative-corporatist’ political scenario of continental Europe (is) much more complicated in the Table 1.3 Government expenditure Total government expenditure/GDP ratio

1988 1989 1990 1991 1992 1993 1994 1995 1996

Deficit of general government budget as a percentage of GDP

Greece

Italy

Portugal

Spain

Greece

Italy

Portugal

Spain

44.2 46.1 49.6 49.0 48.9 51.2 52.7 50.3 49.7

50.7 51.7 53.6 53.9 54.0 57.9 54.6 52.9 53.2

43.5 41.7 42.9 46.4 45.7 46.5 45.3 45.5 45.9

40.5 41.9 43.0 44.5 45.5 48.7 46.9 45.8 44.1

⫺11.5 ⫺14.4 ⫺16.1 ⫺11.5 ⫺12.3 ⫺14.2 ⫺12.1 ⫺9.1 ⫺8.2

⫺10.7 ⫺9.9 ⫺11.0 ⫺10.2 ⫺9.5 ⫺10.0 ⫺9.5 ⫺7.4 ⫺7.3

⫺3.6 ⫺2.3 ⫺5.5 ⫺6.4 ⫺3.3 ⫺6.9 ⫺5.7 ⫺4.9 ⫺3.8

⫺3.3 ⫺2.8 ⫺4.1 ⫺4.9 ⫺3.6 ⫺6.8 ⫺6.3 ⫺6.6 ⫺4.8

Sources: Fraser Institute (1997); Gwartney and Lawson (1997); International Monetary Fund (1998); World Bank (1995).


South, significantly altering the strategies of the various actors’ (Ferrera, 1997: 30). This is clear and undeniable. The ‘Southerners’ do represent a distinct group within the family of the Continental welfare states, a variant of this model. They are merely underdeveloped species of the Continental model, welfare states ‘in their infancy’, with their main common characteristics the immaturity and relative inefficiency of the social protection systems (Gough, 1996: 13, who also includes Turkey in his ‘rudimentary assistance regime’) and some comparable social and family structures. Not only are their founding principles undeniably Bismarkian, but also their current institutional, organisational and economic features bear the ‘signature’ of the Continental state-corporatist model. Our thesis is that the undeniable deviations are either the result of the delayed development of the social protection systems and/or the outcome of the aforementioned distortions of the administrative and political system. It is noteworthy that even the authors who support the institutional distinctiveness of these countries, after a while do not refer to it as a model but rather as the outcome of a chronic disease, speaking about the ‘southern institutional syndrome’ (Rhodes, 1997a: 15). More characteristically, Matsaganis (1999: 22) writes that ‘in the social protection systems of Southern Europe there are all the distortions of the “conservative model” but to a higher degree’. However, as there is some clear evidence of convergence with the other European state-corporatist states (see the concluding remarks of the book), we will continue to consider the Southern member states of the EU as a group of countries with many social, political and administrative affinities. That is, we will treat them not as a fourth model in the Esping-Andersen classification, but rather as the ‘discount edition’ of the Continental one (Abrahamson, 1992: 10). Still, one should refrain from regarding all Southern EU member states as similar. Not only could they be grouped in two clusters (Greece and Italy on one side, Spain and Portugal on the other), as already mentioned, but even within each cluster, the differences are rather important, especially between Italy and Greece, countries of unequal socio-economic development. Other factors of differentiation remain. For instance, the exceptionally high female employment in Portugal puts this country in a category of its own in the European South. Furthermore, immense regional disparities within each country should also be taken into consideration. Of course the cleavage between the poor Italian South and the overdeveloped North (Fargion, 1997) offers the most illustrative example of extreme differentiation, but it is not an isolated case. In Spain there are similar differences, for example between Autonomous States like the Basque Country, where the right to a minimum income is a justiciable claim and others, like Aragon or Cantabria, where similar programmes are discretionary and rather insufficient with regard to local social needs (Laparra and Aguilar, 1997). This intra-state territorial diversity is less evident in Greece and Portugal, because of the centralist, unitary organisation of the political system and the relative


weakness of the regional authorities. However, the inequalities of peripheral development result, even in these countries, in fragmented social policies, especially in the poorer regions where lack of adequate infrastructure, know-how and trained personnel result in huge gaps in social protection. Still, even between areas of similar economic development, as for instance Oporto and Lisbon, differentiation exists due to the variance of available resources (Garcia, 1999: 169).

General characteristics of the social protection systems in Southern Europe After having presented the discussion on the existence of a Southern European model, we now proceed to the analysis of the general characteristics of the social protection systems of the countries of the region. At present, all of their constitutions establish the principle of the ‘Social State’13 either explicitly14 or by means of constitutional provisions guaranteeing a number of social rights.15 Actually, social rights were present in the earlier constitutions of the aftermath of the World War I and more specifically in the Constitutions of Greece (1927, articles 19–24), of Italy (1927), of Portugal (1933, articles 12–21) and of Spain (1931, 1938). However, this does not constitute a particularity of the South (Ferrera, 1999), as practically all the countries of the Continental model enshrine this principle16 or include in their constitutional texts an analytical enumeration of social rights17 (Katrougalos, 1998). At a sub-constitutional level, the legal entitlement to services or, more often, to monetary transfers in cash, is guaranteed by an analytical and meticulous aggregate of public law regulations. As mentioned earlier in this chapter, the welfare provisions are largely based on the insurance principle, connecting social benefits to contributions and consequently, to the salary of the workers. Inevitably, social rights are not universal, but categorical and work-focused. This institutional commitment sharply contrasts to one of the most striking characteristics of the social protection system in the Southern European countries, that is, the delay in the development of the welfare state. This is strictly associated with the overall delay of economic development, as there is a clear correlation between insufficient social expenditure and low GDP (Eurostat, 1994b; Commission Européenne, 1998: 7). As already mentioned, all of them (with the exception of the Italian North and some regions in Spain) have been, till very recently, rather poor agricultural countries, characterised by late and incomplete industrialisation. The gap between them and the ‘core’ European countries has not been overcome yet. For instance, in the 1990s, the GDP per head in Greece and in Portugal still amounted to only 65 per cent of the Union average (Eurostat, 1994b).


Table 1.4, which presents the principal steps of the establishment of fundamental social legislation in selected countries illustrates the institutional delay of welfare state formation. A compulsory insurance scheme against unemployment was not introduced in Portugal until 1975 – in 1974 only 20 per cent of the population had insurance coverage (Hoffmann, 1983). The democratisation of Greece, Spain and Portugal, the least developed countries of the region, was concomitant with an effort to build the structures of a genuine welfare state. The rise in power of the socialist parties favoured the process. Over the 1980–92 period, the Southern states have

Table 1.4 Introduction of principal social legislation in various countries Accident insurance Germany Austria France Belgium Italy Spain Portugal Greece Average year for the Continental model without the Southern states Denmark Norway Sweden Finland Average year for the Scandinavian model UK Ireland USA Canada Australia Average year for the liberal model

Health insurance

1881–4 1887 1898 (vol.) 1903 (vol.) 1898 1900 1913 1915 1890

1883 1888 1930 1894 (vol.) 1886 (vol.) 1919 (1942) 1935 1934 1896

1898 (vol.) 1894 1901 (vol.) 1895–1917 1901 Without Finland ⫽ 1897 1906 (vol.) 1897 (vol.) 1930 1930 1902 1913

1892 (vol.) 1909 1891–1910 (vol.) 1963 1913 Without Finland ⫽ 1900 1911 1911 – 1971 1945 1946 Without USA ⫽ 1934

Old age insurance 1889 1906–27 1910–30 1900 (vol.) 1898 (vol.) 1939 1935 1934 1908

1891 (vol.) 1936 1913 1937 1919 Without Finland ⫽ 1915 1908–25 1908 1935 1927 1909 1918

Unemployment insurance 1927 1920 1914 1944 1919 1919 1975 1945 1924

1907 1906 1934 1917 1916

(vol.) (vol.) (vol.) (vol.)

1911–20 1944 1940 1940 1945 1933

Note: vol. ⫽ subsidised voluntary insurance. Sources: Katrougalos (1996); Flora and Heidenheimer (1982: 59); Pierson (1991: 108); Bouzas (1994: 422); SSA (1997).

7 6 5 4 %

3 2 1 0 P

IT GR* SP L UK F DK IR NL D B Growth 1980–90

EU 8

Ireland

7

Sweden

6

Denmark Finland

5

Netherlands 4

France

3

Germany Belgium

2

Austria 1

UK

0

Luxembourg Italy

–1

Spain –2

Portugal

–3

Greece Growth 1990–96

Figure 1.3 Growth of social expenditure as percentage of GDP, 1980–96 Note: Greece: 1980–89. Source: European Commission (1993); Eurostat (1999a).


had a real growth of social protection expenditure per capita of approximately 70 per cent, whereas the corresponding figure for the six highestspending member states was only 31.7 per cent and the EU average 40.6 per cent (Eurostat, 1994b; see also Figure 1.3). Still, it is noteworthy that the expansion of the welfare structures, contrary to the situation in other European states which profited from the continuous economic development of the 1960s, occurred in a period of general economic recession. Hence, the exceptional rate of social expenditure growth in the European South was not sustainable in the long term, as it took place in an economic environment of retrenchment. As shown in Figure 1.3 and Table 1.5, only Portugal managed to have a percentage of growth of social expenditure above the European average, while, on the contrary, Greece had the third worst performance among the EU countries. Between 1990 and 1993, when for the rest of the European countries there was a considerable increase in social expenditure by approximately 4.1 per cent per year, Greece reduced its per capita expenditure in real terms (see Table 1.5). In contrast, Portugal scored an impressive increase of 13 per cent. This trend can be partly explained by the return of the conservatives to power for three years (1991–4). During this period the percentage of GDP attributed to social expenditure fell from 22.7 per cent to 22 per cent (Eurostat data). The official Greek figures, according to the General Budget, are respectively 19.22 per cent and 18.9 per cent (Ministry of National

Table 1.5 Social expenditure as percentage of GNP, 1990–96

EU Greece Sweden Denmark Finland Netherlands France Germany Belgium Austria UK Luxembourg Italy Spain Portugal Ireland

1990

1993

1996

25.4 22.7 32.9 30.3 25.5 32.5 27.7 25.4 26.8 26.7 23.1 23.5 24.1 20.4 15.5 19.1

29.0 22.0 38.6 33.5 35.4 33.7 31.2 29.1 29.0 29.0 28.8 25.2 26.0 24.4 21.0 20.8

28.7 23.3 34.8 33.6 32.1 30.9 30.8 30.5 30.0 29.5 27.7 26.2 24.8 22.4 21.6 18.9

Sources: Eurostat (1999a,b); Eurostat-ESSPROS (2000).

Average growth 1990–96 3.3 0.6 1.9 3.6 6.6 ⫺1.6 3.1 5.1 3.2 2.8 4.6 2.7 0.7 2.0 6.1 ⫺0.2

1997

28.2 23.6 33.7 31.4 29.9 30.3 30.8 29.9 28.5 28.8 26.8 24.8 25.9 21.4 22.5 17.5


Economy of Greece, 1999: 30). Actually, since 1991 the gap between Greece and the European average began to enlarge again, after almost a decade of the opposite trend. After the socialists’ comeback, this trend was once again reversed and in 1996 the respective figure was 19.25 per cent (Greek General Budget data) and in 2000, 20.2 per cent. Although this figure is worse than the historical peak of 21.46 per cent, reached in 1987, due to the effort of reduction of public expenses, the social expenditure as percentage of total government expenditure was higher than ever in 2000 (see Table 1.5 and Figure 1.4). It is noteworthy that in the EU, between 1993 and 1996, expenditure on social protection as a percentage of GDP showed a slight downward trend. This continued in 1997 and was due partly to renewed growth in GDP but also to a slowdown in the growth of social protection expenditure (in particular a decrease in unemployment benefits). Still, although in some countries (more particularly the Scandinavian states and Ireland) a reduction of social expenditure took place, its rate increased in Portugal, Italy and Greece (see Figure 1.3). Another important factor for Greece’s weaker social performance, in comparison with Spain and Italy, is the significant strain that military expenses impose on the state budget, as a result of the perpetuation of the political tension with Turkey. Although military expenditure has fallen from 5.2 per cent of GDP in 1985 to 4.5 per cent in 1996, Greece spends almost three times as much for this purpose as the other Southern countries and almost double the NATO average (see Table 1.6 and Chapter 4 p. 97ff.). The consequences are not limited to welfare expenditure but also to other, lato sensu social functions of the state, such as education.

25

80 70 60 50 40 30 20 10 0

20 15 10 5

19 68 19 70 19 72 19 74 19 76 19 78 19 80 19 82 19 84 19 86 19 88 19 90 19 92 19 94 19 96 19 98 20 00

0

Social expenditure as percentage of total government expenditure Figure 1.4 Social expenditure in Greece, 1968–2000 Source: Ministry of National Economy of Greece (2000: 30).

Social expenditure as percentage of GNP

Southern Welfare States 23 Table 1.6 Military and education expenditure Public expenditure on education (% of GNP)

Italy Spain Greece Portugal NATO average

Military expenditure (% of GNP)

1985

1996

1985

1996

5.0 3.3 2.9 6.1 –

4.7 4.9 3.0 7.2 –

2.3 2.1 5.2 – 3.3

1.9 1.5 4.5 – 2.7 (1992)

Sources: Katrougalos (1996, Tables 2a and 2b); UNDP (1999a: 188 ff; UNESCO (1998); UN (1993); World Bank (1993); World Bank (1999); SIPRI (1998).

The structure and scope of the social protection system In Italy and Greece (but not in Spain and Portugal) the bulk of income transfers is absorbed by old age pensions and to a lesser degree, invalidity pensions (Figure 1.2). These are, in principle, calculated on the basis of the previous salary and the contributions paid. The rates of these contributions differ widely across occupational categories and economic sectors, with private employees generally paying the highest rates. However, due to the fragmentation of the social insurance units and the plethora of related schemes, especially in Greece and Italy, there is a considerable divergence of the benefits paid to different categories of the retired population. In Greece, even the family allowances (except for a special allowance for the fourth child), unlike all other EU countries, are wage-related. They are equal to one per cent of the monthly salary, and in 1991 represented only 1.4 per cent of total social benefits. The amount of benefits that households receive in the domain of family allowances or childcare is far below the EU average. The disproportionate distribution of the social benefits between the elderly and the non-aged population is a salient characteristic of the state-corporatist model. Whereas the welfare state covers about 50 per cent of the day care needs of Swedish or Danish children, the coverage is below 5 per cent in Italy (EspingAndersen, 1994: 16) and below 3 per cent in Greece. Still, as already discussed above and shown in Figures 1.2 and 1.5, the analogy is exceptionally disproportionate in the South and more especially so in Italy and Greece. The basic reason for this underdevelopment of childcare is that it remains by and large the family’s responsibility. These services are traditionally provided by women (full-time housewives) and although this model is eroding gradually (especially amongst the younger generation living in urban centres) because of rising female employment, as we argue in


100% 80% 60% 40% 20% 0% StateGreece corporatist model

Italy

Portugal

Old age – survivors

Spain

Health

Family – children

Figure 1.5 Social expenditure by category Source: Eurostat-ESSPROS (2000); see also Figure 4.1.

Table 1.7 Social assistance expenditure as percentage of social security, 1980–92

Greece Italy Portugal Spain

1980

1985

1990

1991

1992

Change 1980–92

1.3 9.1 2.3 2.1

1.2 8.7 6.1 6.0

0.9 8.8 4.7 8.1

n/a 9.6 4.1 7.9

1.1 (1994) 9.1 3.8 8.4

⫺0.2 0 1.5 6.3

Sources: Kalisch et al. (1998: 11); Eardley et al. (1996).

Chapter 3, the state has not yet filled the emerging vacuum. The emerging needs of women are partly met by ‘third country’ migrant women who are employed as nannies or domestic workers (see Chapter 6). A factor of differentiation, which partly explains the dissimilar pattern of welfare benefit distribution in the Iberian countries, especially in Spain, is, since the beginning of the 1980s, the departure of their social protection systems from the traditional orientation of income protection towards a system focusing more on economic growth and employment support (Rhodes, 1997a: 38). The new paradigm has workfare characteristics and is targeting the excluded through means tests (Laparra and Aguilar, 1997). Another common characteristic in most Southern European countries, subsequent to the predominance of insurance-based benefits, is the very low expenditure on social assistance. This is particularly low in Greece and relatively higher in Italy (see Table 1.7). The situation remained stable during the last decade, with the exception of Spain, where the number of beneficiaries of means-tested benefits increased ten-fold from 1982 to 1992. In this year social assistance schemes covered 12 per cent of the population, as a response to high unemployment and job instability (see Chapter 2),


which constituted a very important danger for the social cohesion of Spain (Laparra and Aguilar, 1997). Nevertheless, the new social assistance programmes are rather extensions of the contributory ones, failing to reach the real outsiders of the market and those excluded from the market, thus reconfirming the ‘corporatist’ character of the system. In addition, and contrary to the median Continental ‘core’ countries, until recently the southern welfare systems lacked any kind of universal minimum income support scheme. Portugal was the first to introduce such a scheme (in 1996), while local and regional schemes exist in Italy and Spain. In Greece there is still no income maintenance for non-insured young persons, for instance first job-seekers, despite the existence of a very low universal non-contributory public assistance pension for the elderly over 60. The unemployment benefits are also dependent on previous employment, up to a maximum of 70 per cent of the last salary, and last for limited time periods (see Chapter 2). This situation reveals an important gap in the protection of the outsiders of the market. According to estimates of the European Commission (Commission Européenne, 1998: 11), in 1993, 25 per cent of the Europeans unemployed for more than three months did not receive any unemployment allowance (although they had access to some kind of non-contributory minimum income support system). The respective percentage for Portugal, Greece and Italy was 66 per cent. The lack of the safety-net provided by a nationally based minimum income support system in Greece and Italy makes the situation of the long-term unemployed rather precarious. Regarding the financing of the social security system, there is an absolute dominance of contribution based social insurance schemes (see Tables 1.8 and 1.9). Although the idea of an equal distribution of the expenses between the State, the employers and the employees has been discussed recently within the framework of a social dialogue prior to the adoption of the reforms of the insurance legislation in all four countries, the traditional institutional patterns remain almost intact. Only the National Health Systems and family allowances are financed principally by the state. Yet, in practice, the public purse also covers the deficits of the insurance units. Accordingly, as shown in Table 1.8, the pattern of financing is similar to the average of the state-corporatist model. The data provided by the European Commission in its third report on Social Protection in Europe in 1995 shows that the implicit tax rate increased from 35 per cent in 1981 to 42 per cent in 1995. In the latest figures, approximately two-thirds of the financing of social protection in the European Union still comes from contributions, some 60 per cent of this paid by employers. This includes voluntary as well as statutory contributions (that is, 40 per cent of total funding) and 30 per cent from taxation, virtually all of this from general taxes. In the Southern European countries there is a similar situation, as most revenue comes from contributions. The proportion derived from social

26 Southern European Welfare States Table 1.8 Receipts of social protection by type and category as percentage of total receipts Countries

Greece Spain Italy Portugal Average in statecorporatist model1 Average in Scandinavian model Average in liberal model EU15

General government contributions

Social contributions Employers

Protected persons2

1997

1990

1997

1990 1997

59.0 71.3 67.9 57.1 65.26

60.8 69.7 67.4 46.7 65.8

39.4 54.4 52.9 37.1 32.75

37.6 52.2 50.3 28.6 36.6

19.6 16.9 15.0 20.0 28.2

60.35 52.9

32.6

40.46

22.45

27.56

6.65 12.86

7.5

8.43

49.45 55.6

41.75

37.85

25.8

23.3

15.95 14.55

8.8

6.6

28.8

65.0

62.4

42.0

38.4

23.0

6.2

5.2

Employees’ contributions

Employers’ contributions

Tax

Other

16.8 3.7 29.6 37.3 23.6 12.5 13.9 25.6 36.8 15.9

39.2 10.0 40.2 37.4 52.8 23.0 53.3 33.1 31.1 31.8

39.8 81.5 26.8 21.7 20.5 63.3 30.6 32.8 18.6 43.4

4.2 4.8 3.4 3.6 3.1 1.2 8.5 13.5 31.8 8.9

1990

1997

33.0 26.2 29.0 33.7 28

29.6 27.1 30.5 43.3 29

32.4

Total

Other receipts

1990

23.2 17.5 17.1 18.1 29.25

24.0

1990 1997 8.0 9.6 2.5 3.3 3.1 2.1 9.2 10.1 6.55 28.4

Notes 1 Without the southerners. 2 Employees, self-employed, pensioners and others. Source: Eurostat-ESSPROS (2000).

Table 1.9 Financing of social security

Belgium Denmark Germany Greece France Ireland Italy Luxembourg Netherlands UK

Source: European Commission (1997c).

contributions is greater in Spain and Italy, accounting for over 65 per cent of total receipts, which is similar to the core countries of the corporate model (France, Belgium, the Netherlands, Germany) (Commission Européenne, 1998, p. 10; Eurostat, 2000b). It is only in Portugal that this type of financing is slightly less than 50 per cent.


The persistence of poverty The persistence of wide-scale poverty is not only a societal characteristic, but also a symptom of the reduced effectiveness of the social protection system in the Southern European countries. For this reason it is analysed in this chapter, which aims to describe the general characteristics of the welfare states of the European South. Due to the limited available resources and the overall delayed economic development, for a long time extended poverty was endemic in Southern Europe. In Greece for instance, according to some estimates, the percentage of the population below the poverty line, defined as the average income of the typical worker’s household, was approximately 73 per cent in the 1930s (Kremalis and Yfantopoulos, 1992: 84). Besides that, these countries were never prosperous (with the exception of northern Italy). Another reason for this situation was the very large inequality of income distribution. The Gini coefficient for Greece, for example, is estimated for the late 1930s at 0.6140, falling slightly to 0.5936 in the late 1940s (Kremalis, 1991; Kremalis and Yfantopoulos, 1992: 84). In the 1960s there was a definite improvement (G1963 ⫽ 0.3115), which continued in the 1970s (G1974 ⫽ 0.2921) and in the 1980s (G1982 ⫽ 0.2409 in the urban and 0.2307 in the rural areas) (Karagiorgas, 1990: 110, 117, 157). Despite the improvement in the 1980s, the fragmentation of the social protection systems still perpetuates flagrant inequalities and does not eradicate poverty (Da Costa, 1990). As shown in Table 1.10, in the four Southern Table 1.10 Distribution of income in the EU

Greece Portugal Italy Spain Austria Germany Belgium Ireland UK Luxembourg France Netherlands Denmark EU (without Finland and Sweden) Source: Eurostat (1998).

Income of the poorest decile of population (% of total)

Income of the richest decile of population (% of total)

Ratio of the income of richer 20% to poorer 20% of population

2.2 2.2 2.4 2.5 2.7 2.7 2.9 3.0 3.0 3.1 3.3 4.1 4.4 2.6

26.3 27.7 22.9 24.9 22.8 22.7 22.5 26.6 26.1 23.6 22.8 20.0 20.2 24.0

6.6 7.1 5.4 6.0 4.9 4.9 4.8 5.9 5.6 4.8 4.5 3.5 3.1 5.5


countries the poorest group of the population has the smallest percentage of national wealth in Europe. Taking into account the relatively low GDP in comparison to the median European average and the lack of any substantial minimum income support, one can easily understand the precariousness of the existence of these households. Another indication of the persistence of flagrant inequalities is the ratio of the income of the richer 20 per cent to the poorer 20 per cent of population, which is worse in all four Southern countries than in the rest of the EU. There are also a number of other specific determinants of differentiation within each of the countries. For instance, the uneven spatial application of social policies and its repercussion on poverty is a permanent characteristic of the less centralised countries, Italy and Spain. By and large, nevertheless, the redistributive impact of social security is negligible, as is the rule with the state-corporatist model in general (EspingAndersen, 1990: 27) but it has a more acute, more obvious character in the South. According to the findings of a recent analysis of inequality in Greece by income source, the social protection system actually contributes to the growth of income inequality (Papatheodorou, 1998), albeit marginally. While the income from social protection schemes represents 19.8 per cent of the total income, it contributes to 3.8 per cent of total inequality. In any case, as shown in Table 1.11, social transfers appear to be considerably less effective in mitigating poverty, especially so in Italy and Greece, than in the rest of the European Union. Their impact upon inequality also highlights similar patterns. As indicated in another recent survey (Heady, Mitrakos and Tsakloglou, 2001) analysing the correlation of social protection expenditure and inequality, the related Gini and Atkinson indices reach their highest values in the Mediterranean countries – Portugal, Greece, Spain and, to a far lesser extent, Italy. As a result of the aforementioned factors, Spain, Portugal and Greece (together with Ireland) display the highest incidence of poor households in the European Union. Italy’s figures are relatively lower, even lower than Table 1.11 Percentage of persons below the poverty line before and after social transfers (excepting pensions), 1995 Country

Before social transfers

After social transfers

Greece Spain Italy Portugal EU12

22 27 21 28 26

21 19 19 20 18

Sources: Eurostat (1999c); OKE (2000).


those of the UK and of France (see Table 1.12). Actually, ‘two Italies’ are also easily discernible in terms of poverty: in the Centre-North the average poverty rate is only 9 per cent, while in the South it reaches a rate of 26.4 per cent (Saraceno, 1992; Ferrera, 1997). Poverty in Greece and Portugal is considerably higher than the average of the EU (see Table 1.13). Until the late 1980s, the poor population was principally composed of ‘traditional’ categories of poor (Room, 1990), especially the elderly, the single parent families, the rural and large households (Bouzas, 1990). Consequently, poverty usually does not turn into exclusion and misery, as the ‘primary social net’ and principally the family alleviates the economic pressure. Moreover, the huge underground economy, especially in Greece and, to a lesser degree, in Italy, allows people to have a second job in the ‘black’ or ‘grey’ economy and, thus to gain an invisible, additional income that makes the difference for their survival (Mingione, 1998) (see Chapter 2). Still, circumstances are changing rapidly, as the new patterns of postindustrial development produce massive unemployment in many urban regions (through deindustrialisation) (Tsakloglou, 1999). Accordingly, a ‘new poverty’ is emerging, in addition to the traditional one, associated Table 1.12 Indices of poverty in the European South Real GDP per capita

Poverty

Poorest 20% Richest 20% Richest to (1980–94) (1980–94) poorest (20%)

Italy Spain Greece Portugal

6,174 5,669 – –

37,228 24,998 – –

UNDP Human Long-term Poverty Index unemployment

50% of Below median income $14.40 per (1989–94) day (1989–95)

6.0 4.4 – –

6.5 10.4 – –

2.0 21.1 – –

Sources: UNDP (1999b: 149 ff); OECD (1997b; 1998b).

Table 1.13 Poverty in the European South and the European Union as percentage of the population, 1993–5 Country

1993

1995


24 19 18 29 17

21 19 19 20 18

Sources: Eurostat (1997; 1999); OKE (2000).

Rank

5 14 – –

Value %

11.6 13.0 – –

8.1 12.5 5.6 4.1


with rural stagnation and decline (Pereirinha, 1997). As unemployment becomes endemic in many areas, the ability of the family to cope with the new situation should not be taken for granted. (It is true that the Spanish example has shown that exclusion can still be avoided even in societies with exceptionally high unemployment growth and job instability, mostly through interfamily redistribution (Laparra and Aguilar, 1997); however, this could happen because of the uneven distribution of economic strain in the Spanish population.) The situation is far from being uniform from one country to another. Hence, the rate of unemployment in Spain during the mid-1990s remained steadily above 20 per cent of the active population, while in its other Iberian counterpart it was below 7.3 per cent and in Greece and Italy it oscillated round 9 and 12 per cent respectively, in the case of Italy, slightly above the EU average. The same diversity exists with respect to long-term unemployment (more than one year). Whereas between 1985 and 1992 this kind of unemployment, as a percentage of the total, has fallen in the EU from 52 per cent to 43 per cent and in Spain and Portugal from 53 per cent to 30 per cent and from 60 per cent to 45 per cent, respectively, it has increased in Greece from 43 per cent to 50 per cent. Of the unemployed 45 per cent are young persons under 25 (data of Institute of Work INE/ GSEE for 1995; see Chapter 2). After this first ‘panoramic’ view of the welfare system in the European South, it is easy to reconfirm our initial assumption that, despite the important differences from country to country, it fits perfectly in the organisational matrix of the Continental model. It shares all the basic features of the latter (Esping-Andersen, 1994: 16), often to an exaggerated degree. Social insurance is highly occupationally segmented and inordinately biased towards pensions; social services are underdeveloped; entitlement is related to the employment and contribution record and emphasis is on the role of the family as the core unit of social care. However, its overall effectiveness is low, both with regard to its redistributive impact and the alleviation of poverty. In the chapters that follow we shall proceed to a more extensive analysis of its components.

2 The Carrot and the Stick: Employment, Unemployment and Labour Market Policies

Introduction In an era of recession and high rates of unemployment throughout Europe (see Table 2.1), all Southern European countries, and especially Spain and Greece, stand out as member states of the European Union who have serious labour market problems. Unemployment reached unprecedented heights in the 1980s and 1990s. Spain had the highest unemployment rate, hitting the 24 per cent mark in 1994. Greece, Italy and Portugal reached 7.3 per cent, 9.6 per cent and 12 per cent respectively in the mid- to late 1990s. The employment crisis confronting these countries since the 1980s is so serious that job creation was used in political campaigns for attracting votes. ‘Guaranteeing a future for our proud youth’ or ‘one million jobs’ were amongst the slogans heard during Papandreou’s and Berlusconi’s electoral campaigns in the early to mid-1980s and in 1994 respectively. This was done even though these countries found themselves in times of economic recession, with relatively large social security deficits and public debts.1 At the same time, during the 1980s and throughout the 1990s, we saw a move towards flexibilisation (numerical and functional); decline of employment regulations in terms of restrictions on the freedom of firms to use particular work practices; new forms of less secure work contracts replacing old traditions of paternalist and protective employment regulations; and the commitment to secure full-time employment. This move from a carrot to a stick approach will be analysed in the light of major policy initiatives for labour market reform and for creating jobs and tackling unemployment adopted within the limits imposed by the structure of the workforce, the changes in economic performance and the significant innovations in domestic policymaking in Greece, Italy, Portugal and Spain. In all four countries there is a division between the protected core of the labour market and the rest, 31

32

Table 2.1 Unemployment rates (percentage of civilian labour force) in the member states of the EU15, 1961–99 Year 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982

B 2.3 2.0 1.6 1.4 1.6 1.7 2.4 2.8 2.2 1.8 1.7 2.2 2.2 2.3 4.2 5.5 6.3 6.8 7.0 7.4 9.5 11.2

DK

D

1.3 1.3 1.7 1.2 0.9 1.1 1.0 1.0 0.9 0.6 0.9 0.8 0.7 2.8 3.9 5.1 5.9 6.7 4.8 5.2 8.3 8.9

0.7 0.6 0.6 0.5 0.4 0.5 1.4 1.0 0.6 0.5 0.6 0.8 0.8 1.8 3.3 3.3 3.2 3.1 2.7 2.7 3.9 5.6

GR 5.9 5.1 5.0 4.6 4.8 5.0 5.4 5.6 5.2 4.2 3.1 2.1 2.0 2.1 2.3 1.9 1.7 1.8 1.9 2.7 4.0 5.8

SP

F

IRL

2.4 1.6 2.0 2.8 2.6 2.2 3.0 3.0 2.5 2.6 3.4 2.9 2.6 3.1 4.5 4.9 5.3 7.1 8.8 12.0 14.0 16.0

1.3 1.4 1.6 1.2 1.5 1.6 2.1 2.6 2.3 2.4 2.7 2.8 2.7 2.8 4.0 4.4 4.9 5.1 5.8 6.2 7.3 8.0

5.3 5.2 5.4 5.2 5.0 5.1 5.5 5.8 5.5 6.3 6.0 6.7 6.2 5.8 7.9 9.8 9.7 9.0 7.8 8.0 10.8 12.5

I 5.1 4.4 3.6 4.0 5.0 5.4 5.0 5.3 5.3 5.1 5.1 6.0 5.9 5.0 5.5 6.2 6.7 6.7 7.2 7.1 7.4 8.0

L

NL

0.0 0.5 0.0 0.5 0.0 0.5 0.0 0.5 0.0 0.6 0.0 0.8 0.0 1.7 0.0 1.5 0.0 1.1 0.0 1.0 0.0 1.3 0.0 2.3 0.0 2.4 0.0 2.9 0.0 5.5 0.0 5.8 0.0 5.6 1.2 5.6 2.4 5.7 2.4 6.4 2.4 8.9 2.4 11.9

A

P

FIN

S

UK

1.4 1.5 1.6 1.5 1.5 1.4 1.5 1.6 2.0 1.4 1.3 1.2 1.1 1.3 1.8 1.8 1.6 2.1 2.1 1.9 2.5 3.5

2.0 2.3 2.4 2.5 2.5 2.5 2.5 2.6 2.6 2.6 2.5 2.5 2.6 1.7 4.4 6.2 7.3 7.9 7.9 7.6 7.3 7.2

1.2 1.3 1.5 1.5 1.4 1.5 2.9 4.0 2.8 1.9 2.3 2.5 2.3 1.7 2.3 3.9 5.9 7.3 6.0 4.7 4.9 5.4

1.5 1.5 1.7 1.6 1.2 1.6 2.1 2.2 1.9 1.5 2.5 2.7 2.5 2.0 1.6 1.6 1.8 2.2 2.1 2.0 2.6 3.3

1.2 1.7 2.1 1.4 1.2 1.1 2.0 2.1 2.0 2.2 2.7 3.1 2.2 2.0 3.2 4.8 5.1 5.0 4.6 5.6 8.9 10.3

EU15 2.1 1.9 2.0 1.8 2.0 2.0 2.6 2.7 2.4 2.3 2.6 2.8 2.6 2.7 3.9 4.6 4.9 5.1 5.3 5.8 7.4 8.7

1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

11.1 11.1 10.3 10.3 10.0 8.9 7.5 6.7 6.6 7.3 8.9 10.0 9.9 9.7 9.2 8.8 8.3

9.0 8.5 7.1 5.4 5.4 6.1 7.4 7.7 8.4 9.2 10.1 8.2 7.2 6.8 5.6 5.1 4.6

6.9 7.1 7.2 6.5 6.3 6.2 5.6 4.8 5.6 6.6 7.9 8.4 8.2 8.9 9.9 9.4 9.0

7.1 7.2 7.0 6.6 6.7 6.8 6.7 6.4 7.0 7.9 8.6 8.9 9.2 9.6 9.6 9.6 9.4

18.0 20.0 22.0 21.0 21.0 20.0 17.0 16.0 16.0 19.0 23.0 24.0 23.0 23.0 21.0 19.0 17.0

8.1 9.7 10.0 10.0 10.0 9.8 9.3 8.9 9.5 10.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0

14.0 15.5 16.9 16.8 16.6 16.1 14.7 13.4 14.8 15.4 15.6 14.3 12.3 11.6 9.8 7.8 6.0

7.7 8.1 8.5 9.2 9.9 10.0 10.0 9.1 8.8 9.0 10.3 11.4 11.9 12.0 12.1 12.2 12.2

3.5 3.1 2.9 2.6 2.5 2.0 1.8 1.7 1.7 2.1 2.7 3.2 2.9 3.3 2.8 2.8 2.7

9.7 9.3 8.3 8.3 8.0 7.5 6.9 6.2 5.8 5.6 6.6 7.1 6.9 6.3 5.2 4.0 3.6

4.1 3.8 3.6 3.1 3.8 3.6 3.1 3.2 3.4 3.4 4.0 3.8 3.9 4.3 4.4 4.4 4.3

7.8 8.5 8.7 8.4 6.9 5.5 4.9 4.6 4.0 4.2 5.7 7.0 7.3 7.3 6.8 4.9 4.7

5.5 5.2 5.0 5.3 4.9 4.3 3.2 3.2 6.7 11.9 16.6 16.8 15.6 14.8 12.7 11.4 10.1

3.7 3.3 2.9 2.7 2.2 1.8 1.6 1.7 3.1 5.6 9.1 9.4 8.8 9.6 9.9 8.2 7.8

11.1 11.1 11.5 11.5 10.6 8.7 7.3 7.0 8.8 10.1 10.4 9.6 8.7 8.2 7.0 6.3 6.5

9.1 9.7 10.0 9.9 9.7 9.1 8.3 7.7 8.2 9.3 10.7 11.1 10.7 10.9 10.6 10.0 9.6

Source: European Commission (1999b: 104–5).

33


especially those in temporary and irregular employment, those working in the informal sector and the unemployed. We have what Perez Diaz and Rodriguez (1994) have called ‘four cornered societies’, comprised of socioeconomic spheres with different income, job and welfare opportunities. These spheres, however, often crosscut and intercept each other. Within this kaleidoscope, people more often than not tend to combine the different job, income and welfare opportunities offered by the four spheres. Our aim in this chapter is to review the major aspects of employment and related developments in Greece, Italy, Portugal and Spain. In so doing, we will try to indicate features which are common to all four countries and highlight major disparities in labour market performance and policies adopted to combat unemployment. Some policy reforms are linked to strategies of social concertation, as for example was the case in Italy and in Portugal in the 1990s and in Spain in the late 1970s and early 1980s.

The context: changes in the economy and labour market trends The model of capitalist development followed by the Southern European countries is characterised by: late industrialisation; the persistence of traditional agrarian social arrangements; high rates of economic growth in the 1960s;2 relatively high numbers of small-scale units relying on the flexible use of family labour and flexible hired labourers from non-EU member states (many of whom are seasonal migrants from nearby regions – see Chapter 6); limited diffusion of a proletarianised manufacturing working class; until recently, low rates of female participation in the formal economy; and a dynamic process of informalisation of economic activity. Structural change in employment patterns from the 1960s onwards has its roots in a number of factors. These include the two oil shocks; the rapid transition to post-Fordism (before Fordist production structures had been fully developed); the expansion of service employment; the democratisation of union organisation after the fall of dictatorships in Greece, Portugal and Spain; and the preparations of these three countries for becoming full members of the European Community. Some important demographic, socio-economic and labour market characteristics have been summarised in a table compiled by Iosifides and King (1996), which is self-explanatory (Table 2.2). Italy had a high (3 per cent) annual average rate of growth of GDP from the mid-1970s until 1990. A positive climate was created by the economic expansion of the 1980. Within that decade, total employment rose by more than 1.5 million. Nevertheless, employment increased by a yearly average of 0.5 per cent in the period 1975–90. Restructuring and reorganisation in the industrial sector gradually reduced labour demand. As a result, and after two decades of positive growth, in the 1990s Italy experienced a drop in the

Labour Market Policies 35 Table 2.2 Population and labour force characteristics of Southern European countries, 1970–90 Italy

Greece

Spain

Portugal

1970

1990

1970

1990

1970

1990

1970

1990

52.8 20.9

56.9 24.3

8.8 3.2

10.1 4.0

33.6 13.0

39.0 15.3

8.7 3.3

9.9 4.7

14.9 6.0 59.5 86.8 33.5 5.3

15.4 8.9 61.1 78.1 44.5 10.8

2.3 0.9 57.8 85.8 31.2 4.2

2.5 1.5 60.9 75.8 43.5 7.2

9.9 3.1 62.1 96.4 29.2 2.5

10.0 5.3 58.8 76.8 40.9 15.9

2.7 0.9 N/A N/A N/A 2.5

2.7 2.0 73.1 85.6 61.3 4.6

Percentage employed in: Agriculture 20.2 Industry 39.5 Services 40.3 Percentage 33.3 self-employed

9.0 32.4 58.6 28.8

40.8 25.0 34.2 N/A

24.5 27.4 48.2 48.6

27.1 35.5 37.4 26.4

11.8 33.4 54.8 23.8

30.0 32.9 37.1 N/A

17.8 34.8 47.4 29.7

Population* Economically active* Male Female Activity rate % Male Female Percentage unemployed

Note * denotes millions Sources: King and Konjhodzic (1995); Iosifides and King (1996).

employment rate when, between 1990 and 1994, it fell by 3.7 per cent. In 1995, Italian unemployment reached the 11.9 per cent mark (see Table 2.1), 22 per cent in the South as opposed to 7.2 per cent in the North, with the long-term unemployment rate amounting to 7.6 per cent of the total unemployment rate (Ferrera and Gualmini, 2000: 194). In Spain, there was a dramatic fall in employment during the period 1975–85 when the employment rate fell by 1.5 per cent per year; 2.25 million jobs were lost. Most job losses were in the primary sector as well as in shipbuilding and manufacturing (especially textiles and the car industry), while employment in the service sector increased by 3 per cent (OECD, 1996b: 57). This was a dramatic departure from the years prior to Franco’s death – at that time, Spain had enjoyed one of Europe’s lowest rates of unemployment (around 1.5 per cent of the total population) – and a reflection of the departure from a tradition of paternalist and protective employment regulations and a commitment to full employment. Unemployment climbed to 21 per cent in 1986 and to 24 per cent in 1994 (see Table 2.1), ‘the most extreme condition of high unemployment among OECD countries’ (Encarnacion, 2000: 32). This can be partly explained by the collapse of formerly protected inefficient firms (Rhodes, 1997b); industrial restructuring


and modernisation; return migration; and partly by the populist policy of high real wage growth from 8 per cent of GDP in 1970 to 12 per cent in 1986 and the increase of social security contributions pursued in the late 1970s and early 1980s as well as the high redundancy costs (Argandona, 1997; European Commission, 1997b). Economic globalisation and integration has further exacerbated the bleak picture. Unemployment continued during the high growth of the economy (it increased by an annual average rate of 4.5 per cent) in the late 1980s as well as during the 1990s and reached a peak in 1994 when it soared to 24 per cent (European Commission, 1997b; Encarnacion, 2000: 32; Lazaridis, 1996: 10; Rhodes, 1997b). It is estimated to be around 20 per cent even if one discounts those who claim benefits while working in the informal economy (Dolado and Jimeno, 1995). Prior to 1973, unemployment in Portugal was virtually non-existent (less than 2.6 per cent; see Table 2.1). However, unemployment increased after 1974; within a year it had reached 3.5 per cent of the active population. It continued increasing and by the mid-1980s had reached 8.7 per cent of the active population (see Table 2.1). Despite the fact that employment expanded by an average yearly rate of 5 per cent of GDP in the late 1980s, this was not accompanied by a dramatic fall in the unemployment rate. Unemployment, although lower (4.7 per cent in 1999; see Table 2.1), has remained a major concern of the Portuguese government throughout the 1990s (Bacalhau and Bruneau, 2000: 138). Similar to Portugal, unemployment in Greece till the late 1980s was not such a major problem as in Spain (see Figures 2.1, 2.2 and 2.3). It was virtually non-existent during the 1960s and 1970s (unemployment was around 1.9 per cent in 1979; see Table 2.1). This can be explained in terms of the massive emigration of Greeks in the 1960s and early 1970s; the public sector which acted as a large employer;3 the large numbers of self-employed; and the ungenerous unemployment benefits on offer, which created a disincentive for people to remain unemployed. Female participation in the labour market increased at a high rate (the annual average rate being 3.8 per cent) during the period 1975–85, partly as a result of an equal opportunities campaign launched by the PASOK government in the early 1980s (see also Chapter 3). During the same period there was an increase in unemployment by an annual average rate of 22.2 per cent for men and 24.4 per cent for women. By the mid-1990s total unemployment had reached 9.6 per cent of the labour force (Table 2.1). This was brought about by a number of factors: the recession in the late 1970s and early 1980s, and the economic crisis due to intense competition from other low-wage economies in light-manufacturing goods which led to the loss of Greece’s market share, return migration, economic restructuring and deindustrialisation, the closing of numerous ‘ailing’ firms, and the stagnation of investments (Symeonidou, 1996: 74; Karakatsanis, 2000: 240–43). The youth and women were especially hard hit by unemployment. The rates of unemployment for these groups were approximately 29 per cent and 15 per cent respectively (OECD,

37 25

Unemployment rate (%)

20

15

10

5

Portugal

98

96

19

94

19

92

19

90

19

88

Spain

19

86

19

84

19

82

19

80

Greece

19

78

19

76

19

74

19

72

19

70

19

68

19

66

19

64

19

62

19

19

19

60

0

Italy EU15

Figure 2.1 Unemployment rates as percentage of the civilian labour force in Southern Europe, 1960–99 Source: Data obtained from European Commission (1999b: 104–5).

50 Youth unemployment rate (%)

45 40 35 30 25 20 15 10 5 0 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 Greece

Spain

Italy

Portugal

EU15

Figure 2.2 Youth unemployment rates as percentage in Southern Europe, 1986–98 Sources: Eurostat (1990; 1994a; 1995d; 2000a).

Male and female youth unemployement rate (%)

38 Southern European Welfare States 60 50 40 30 20 10 0

male 86

female 86 Greece

male 92 Spain

female 92 Italy

male 98

Portugal

female 98 EU

Figure 2.3 Male and female youth unemployment rates (seasonally adjusted percentage) in the EU, 1986, 1992, 1998 Sources: Eurostat (1990; 1994a; 2000a).

1996

1975 100%

100%

50%

50%

0%

0% GR

SP

I

EU*

P

GR SP

I

P

1985

EU 1999

100%

100%

50%

50% 0%

0% GR SP

I

P

GR SP

EU*

Agriculture

Industry

I

P

EU

Services

Figure 2.4 Employment by sector in Greece, Spain, Italy, Portugal and EU Note: EU* for 1975 and 1985 refers to the then EC. Source: European Commission (2000).

1996c: 63). This could be attributed to the idiosyncratic approach to labour market reform undertaken since the 1980s which brought about the proliferation of fixed-term contracts. As shown in the following section in this chapter, in an attempt to tackle unemployment, all four countries embarked on a deregulation programme in the 1990s. As a result there has been a proliferation of precarious fixedterm contracts, while the informal economy continues to grow.

Labour Market Policies 39

The above mentioned trends in job losses are closely related to changes in the economic performance of these countries. It is to this issue that we now turn our attention. The economies of Southern Europe experienced rapid growth in the period after World War II, with Italy gradually becoming one of the leading industrial economies in Europe. All four countries have recorded high growth rates with an average annual growth of GDP per capita ranging from 3.6 per cent in Italy to 5.8 per cent in Greece (Williams, 1984: 9). Since the mid-1970s, the Southern European countries have experienced a rapid decline in agriculture in terms of its contribution to GDP and its capacity to provide employment4 and the rapid shift to an alternative income source in the service sector (tourism, public sector, etc.) (see Figure 2.4). Employment in agriculture declined from an average of 26 per cent in the 1970s to approximately 13 per cent in the 1990s. Employment in the tertiary or service sector expanded in all four countries from an average of approximately 37 per cent in the 1970s to around 51 per cent in the 1990s (King and Konjhodzic, 1995). ‘The service sector contains three aspects that are particularly relevant to Southern Europe: the growth of the public sector and its relation to a traditional and contemporary form of the clientelist state; the development of tourism; and the expansion of banking and other financial services’ (Iosifides and King 1996: 72). These changes have been accompanied by urbanisation (Italy urbanised in the post-war period while the other three countries did not urbanise until the mid-1960s), increasing unemployment and high inflation. Before Fordist production structures were developed, Greece, Italy, Portugal and Spain had all experienced a leap forward to post-Fordism. Despite the rapid expansion of employment in the service sector, even as recently as the mid-1990s, there were regions in Italy (e.g. Lombardia, Veneto, Emilia Romagna, Piemonte), Spain (e.g. Navarra, Catalunia, Pais Basco) and Portugal where employment in industry exceeded 35 per cent of the labour force (Petmesidou, 1996b: 98). Industrial employment shows intercountry contrasts, with employment in this sector declining in Italy since the early 1970s, peaking in Greece and Portugal in the early 1980s and decreasing since then. Industrial employment peaked in Spain in the mid-1970s, decreased from 1975–84 and increased thereafter (Iosifides and King, 1996: 73). Moreover, in some areas, such as southern Italy, the whole of Greece and most of Portugal, the shift from agriculture to services has been more pronounced. The tertiarisation of the economy has been accompanied by flexible working conditions and, as mentioned above, an increase in female employment and the persistence of self-employment in all the four countries under study. For example, the percentage of selfemployed in 1994 ranged from 46.7 per cent in Greece to 27.3 per cent in Portugal. In all four countries it was above the average for the twelve countries then in the EU (17.4 per cent) (Eurostat, 1995a).


Multi-occupation and short-term contracts are observed in all four countries. The percentages of short-term contracts vary from one country to another. In 1994 these ranged from 7.3 per cent in Portugal to 33.6 per cent in Spain (the EU12 average was 8.9 per cent) (Eurostat, 1995b). Part-time work was, in all four countries, significantly lower than the EU average (15.4 per cent in 1994) (ibid.), and ranged from 4.8 per cent in Greece to 8 per cent in Italy. Of course one must bear in mind that a large percentage of second or short-term jobs are located in the informal sector. The informal sector is therefore an important form of ‘unemployment and/or sub-employment relief’: A basic feature of economic change has been its uneven nature: industrialisation has taken a different form in the different countries with the development of a ‘sophisticated manufacturing base in the areas of engineering and chemicals’ in Italy, for example, and the prevalence of traditional technologies in food and textiles in Greece and Portugal … there are also differences within countries, notably the dualist nature of Italian economic development and the disparities between northern and southern Italy with the growth of large-scale mass production industries in some northern regions and the development of more flexible smallscale industries in central and north-west regions. (Lazaridis, 1996a: 8; see also Bartlett, 1993: 113, 134–6) The North–South divide in Italy is also pronounced in terms of employment rates. In 1998, for example, employment in the (four) regions with the highest levels (accounting for 20 per cent of the population aged 15 to 64) – Trentino-Alto-Adige, Emilia-Romagna, Valle d’Aosta and Veneto – averaged 61.5 per cent of working-age population, some 22 per cent points higher than in the (three) regions with the lowest levels – Calabria, Sicilia and Campania – where it averaged only 39.5 per cent. (European Commission, 1999a: 69). This gap in employment rates is mirrored by a gap in unemployment rates between North and South Italy. The regional disparity in employment in Spain is narrower than in Italy. The average employment rate in the late 1990s in the North-east of the country (Comunidad Foral de Navarra and Catalunia) was some 16.5 per cent higher than in the region with the lowest rate, Andalucia in the South (European Commission, 1999a: 71). The rate of unemployment is higher in urban centres (Catalunia, Valencia, Madrid) and amongst women in low employment regions. There are also regional employment disparities in Greece. Virtually all regions, except Attiki, experienced a decline in employment during the 1990s. The Ionian islands, Crete and Epirus were most affected. Regional disparities in Portugal are wider than in Greece, with the Centro where the


employment rate was around 83 per cent in 1998 and Madeira, Alenejo and Acores where the employment rate was around 16 per cent in the same year (European Commission, 1999a: 73–4). In both countries, however, changes in employment have not been accompanied by corresponding changes in unemployment5 (ibid.). This suggests that most new jobs went to young, first entrants into the labour market, or that we have an exodus from the labour force, or that serious questions can be posed about the nature of unemployment figures in both countries. Over the 1970–90 period, male activity rates in Southern Europe have decreased, with the exception of Portugal. During the same period we have an increase in female activity rates from 30 per cent in 1970 to approximately 45 per cent in Italy, Greece and Spain in 1990 and 61.3 per cent in Portugal. The social significance of this increase, as well as changes in attitudes towards the role of women and ‘modest’ efforts made by the respective governments in encouraging women to participate fully in the labour market, will be discussed in Chapter 3. Activity rates have been influenced by a number of factors discussed in the introduction to this book, namely the processes of urbanisation and emigration, both of which created labour shortages in the primary sector, as well as social, political and cultural changes. Warren (1994: 92) has defined the informal economy as ‘market activity in legal goods and services that is not registered with the state, not taxed … and not subject to any other state imposed regulation on business’. Estimates of the percentage of the population in each country working in the informal economy vary according to region and sector of economic activity. The informal economy produces an estimated 22 per cent of the GDP in Portugal (Bermeo, 2000b: 270), between 30 per cent and 45 per cent of the GDP in Greece (Canellopoulos 1995; Eurostat 1995a) and constitutes 21–5 per cent of total employment in Spain (Bermeo, 2000b: 270). In Italy, this hidden economy seems to constitute 25 per cent of GDP according to some (The Economist, 1997), whereas according to others (Ferrera, 1997) the respective figure is closer to Greece than to the Iberian countries. The persistence and expansion of informal economic activities, as an alternative process of income generation, has had profound implications on employment in these countries. Informalisation reinforces labour market segmentation, which in turn involves the ‘compartmentalisation and isolation of different groups of participants in the labour market’ (Iosifides and King, 1996: 73). More stable and secure jobs are offered in the primary than in the secondary labour market. Flexible use of family members, in response to seasonal labour shortages in agricultural labour, goes back well prior to the tertiarisation process. These features, along with familism (see Chapter 3) and clientelism, constitute elements of a complex and distinctive mode of income generation and distribution with important effects on the implementation of employment policies. Individual and social group access to clientelistic networks does not favour collective solidarity but rather has strengthened the role of the family as


a strategic unit of decision-making regarding the employment opportunities of its members, especially in Greece and in southern Italy. It also acts as a safety-valve during times of economic distress such as unemployment. Hence familism is a key component of the clientelistic forms of social organisation in Southern Europe, which in turn are closely related to the practice of appropriating resources by political means. Related to this issue is the concept of soft-budgeting. Soft-budgeting refers to ‘an accounting practice by individuals, families/households and enterprises in which the strict condition that earnings must always be greater than, or at least equal to expenses is not obeyed, simply because someone else is paying the difference’ (Petmesidou and Tsoulouvis, 1994: 22). Imbalances like this are met via clientelistic means. In other words, statism, familism and softbudgeting are three pillars which compensate for and to a certain extent legitimise the lack of inter alia effective labour market policies. This brief outline of some important aspects of the southern European economic and labour market sets the scene for our subsequent analysis of some important aspects of the environment within which passive and active labour market policies have taken place.

Labour market policy reforms In the late 1970s and early 1980s, all four countries had relatively restrictive employment protection legislation (for example, strict job demarcations and work schedules; strict rules for dismissals). This was considered to be one of the factors contributing to the rapidly growing unemployment rates discussed above. At the same time, the informal sector allowed a degree of labour flexibility and deregulation. Employment regulations were easily circumvented and as a result, irregular and ‘concealed’ forms of employment, extensive second job holding and the evasion of juridical rules have been common phenomena. These were further exacerbated by the inflow of large numbers of undocumented third-country migrants in the 1980s and 1990s – accommodated by these less restrictive de jure sets of employment regulations. The latter may be among the factors that contributed to the lack of success of the implementation of the various regularisation programmes that have since been introduced in all four countries (see Chapter 6 ‘Migration into Southern Europe’). This phenomenon is ‘the Janus face of the Southern European labour market’, one side characterised by rigidity and the other by flexibility and irregularity. It is the Janus face of the labour market that partly allows for the relatively high levels of unemployment discussed in the previous section to be tolerated in an environment where unemployment insurance is a big burden on national budgets. As mentioned in the previous section, some of the unemployed hold jobs in the informal economy; others supplement underpaid regular or irregular jobs with a second job. Yet others are the young and women, that is people


not seen as family breadwinners in these ‘male breadwinner’ societies (it is the family’s responsibility to look after the young and the men’s to look after their wives, daughters, sisters, mothers – the role of the family as a buffer against the economic repercussions of unemployment will be discussed in Chapter 3). The situation described above is greatly facilitated by a ‘tango’ danced between employers and workers aimed at evading the law and circumventing employment regulations. This constitutes one of the main characteristics of the Southern European labour markets. Of course one must stress that the degree of labour flexibility and the deregulation of employment conditions and procedures as well as the mix between rigidity and irregularity varies from one locality to another. This variability depends on a number of factors such as: sector of production prevailing in the area; size and type of firms; adjustments to changes in the labour market and to pressures exerted by the EU convergence criteria; extent of state intervention and policy styles; and labour market reforms. Since the 1980s, labour market reforms have focused on ways to tackle unemployment and one of Janus’ faces, labour market rigidity. In an attempt to improve labour market performance and combat unemployment, governments introduced various employment policy reforms. Labour market reforms in the South tend to be highly politicised. This trend can be traced back to the years when these countries were under authoritarian regimes and the sensitivity of the unions and the left-wing parties to any shift of power between capital and labour in the period following the transition from dictatorship to democracy. Therefore attempts to reform usually provoked massive unrest and often strikes. Moreover, such reforms were more often than not introduced through public intervention and often aimed at fulfilling particularistic goals. The 1990s however, constitute a turning point for Italy and Portugal in particular, as reforms introduced were now based upon a consensus-building process and reflected wider social arrangements for redrawing the boundaries between the state and society. Governments introduced market forces into many parts of the economy and deregulation measures for labour markets. This manifests a departure from a logic of reciprocity, of an immediate exchange of benefits between the state and the social partners. In Greece, Italy and Spain on the other hand, the highly politicised and conflictual character of industrial relations limits the possibility of broad social arrangements on policy reform. We will now look in more detail at the labour market reforms introduced in each of the four countries.

Italy Employment policy reforms Italy has a mix of labour market policies, with little weight given to general employment benefits. The Italian system of social protection shares the basic characteristics of the corporatist welfare regime, in that it is a ‘combination


of employment-based insurance and universal provision, but … corporatism and patronage continue to play an important role’ (Hantrais, 1995: 222). Decision-making with regard to social insurance is highly centralised and policy implementation is highly fragmented. There is no comprehensive strategy of labour market intervention but rather policies are fragmented into numerous legislative acts adopted ad hoc in response to particular problems. They comprise a large number of schemes that roughly correspond to different professional groups of the unemployed and different causes of unemployment (for example, collective versus individual dismissals) (Papadopoulos, 1998a: 87): The fragmentation and disparities in the income support system for the unemployed, with extreme differences and gaps in the level of social protection given to core and marginal workers, are the result of a complex system guaranteeing full time, stable jobs for core workers (traditionally males in the middle age groups) through employment protection measures, income support to laid-off workers and a public monopoly in job placement. (Dell’Aringa and Lodovici, 1996: 177) Under this system, those who cannot secure full employment and establish contributive entitlements in the formal labour market are offered little protection. Unemployment policies are often linked with policies developed as substitutes for unemployment insurance, such as invalidity pensions. Moreover, Italy is the only European country without assistance benefits for those who exhaust the unemployment benefits (ibid.: 173). Italy introduced unemployment insurance in 1919, much earlier than Greece, Portugal and Spain. However, the level of insurance benefits has been low when compared to other European countries. Temporary wage subsidies were introduced in the 1940s. These were transformed into extraordinary subsidies for crisis-ridden industrial sectors in the 1950s. Moreover, regular unemployment benefits were introduced in the 1960s; these, however, were low. Until the end of the 1960s, state intervention took the form of ordinary allowances for total unemployment and an ordinary earnings replacement fund, known as Cig (Cassa Integrazione Guadagni [Wage Supplementation Fund]),6 for partial unemployment (reductions in working hours). This was unique in Europe in terms of its generosity and duration (Gualmini, 1997: 72–3). The Cig is subdivided into the Ordinary Fund (CIGO), which provides compensation for temporary reductions in working hours due to accidents or cyclical causes; and the Special Fund (CIGS) introduced in 1968, which provides compensation for reductions in working hours resulting from industrial restructuring. In the latter case, workers can maintain their contract with the firm even if they are out of


work for a relatively long period of time (years). In other words, CIGS compensates for total working time lost for a period of time (and since the 1980s, even permanently). These passive measures, together with the special earnings replacement benefits linked to the restructuring of firms and situations of crisis, made the Italian unemployment benefits the most generous in Europe (Ferrera and Gualmini, 2000: p. 189). From 1968–73, a number of measures were introduced, including early retirement for some categories of workers; that is to those unemployed under the CIGS scheme. Workers with a minimum of 15 years of social security contributions were eligible. All the above rested on a contribution-based mechanism. They operated together on the principle of numerical hiring lists, which was kept in place until the late 1980s. In the 1970s, a number of new instruments were created to cope with the rising number of unemployed at the local level. The aim was to guarantee income to the unemployed as a right. Public intervention in income support during unemployment was supported on the grounds that benefits allow an efficient search for work and job matching. Until the 1980s, the main approach followed was avoidance of redundancies and lay-offs through the use of collective action and public resources. In the 1980s, we see a shift from passive to active labour market policies, that is to say the emphasis on ‘the right to an income’ was replaced by ‘the right to a job’. Among the innovations introduced are: on-the-job training contracts; vocational training; part-time work; contracts of atypical work and so on. With the exception of on-the-job training, the other innovative measures did not expand as much as initially expected. Training competence was transferred to the regions. As Gualmini (1997: 71) remarks, ‘Italian unemployment policies are based on a very sectoral and incremental logic. They frequently overlap, and are often intertwined with policies in other policy sectors, as when early retirement and receipt of invalidity pensions became functional substitutes for unemployment insurance in the 1970s and 1980s.’ In the 1980s job creation was above the EC average (between 1980 and 1991 total employment in Italy increased by more than 1.5 million). However, since the late 1980s we have seen an increase in the level of unemployment (see Table 2.1), which in 1988 reached the 22.8 per cent level in the South, as opposed to 7.5 per cent in the Centre–North (Ferrera and Gualmini, 2000: 194). The main approach followed until the late 1980s was avoidance of lay-offs and redundancies through use of collective action and public resources. Solidarity contracts introduced in 1984 were based on collective agreements and aimed at promoting work-sharing initiatives. Moreover, early retirement schemes were used to solve industrial crises during a period in which there was an outcry for an increase in retirement age in order to ease the financial burden of pensions. Until the early 1990s expenditure on labour market programmes was rather low; it was 1.8 per cent of GDP compared to a European average of


2.9 per cent in 1992 (Dell’Aringa and Lodovici, 1996: 179). Active measures concentrated on promotion of fixed-term contracts and employment subsidies (reduction of social security contributions) for those at risk of losing their jobs. The latter were also favoured by the Wage Supplementation Fund (Cig), early retirement schemes, and solidarity contracts mentioned above. However, the level of ordinary unemployment benefits and the numbers of those eligible for income support are low. People with no employment experience and the self-employed, for example, are not eligible for any benefit. Income support depends on the type of job, the sector, the size of the firm and whether the job was lost due to collective dismissal or not. The least favoured under this system are those who work in small firms, particularly service firms. Unemployment insurance benefits are granted to workers who have been dismissed or have resigned from their jobs. There are two such benefits: 1. The so-called ‘ordinary unemployment benefit’ is equal to 30 per cent of a person’s remuneration during the last three months of employment. It can be obtained for 180 days and eligibility presupposes having paid contributions for at least two years. It is also used as a means for subsidising seasonal work. The unemployed worker has to register at the employment office and to be available for work (refusal of two job offers results in the loss of benefit entitlement). 2. The so-called ‘mobility benefit’ is equal to 80 per cent of a person’s gross remuneration during the first year of unemployment. Its duration varies from one region to another but can reach a maximum of four years in some regions in southern Italy. Eligibility presupposes an employment record of at least 12 months and lay-off within collective dismissals due to a crisis. In the case of ‘ordinary benefit’, the unemployed worker has to register at the employment office and to be available for work (refusal of two job offers results in loss of benefit entitlement). People with no previous employment record are not entitled to these benefits. The social assistance scheme (Minimo Vitale) provides some support to those who have lost entitlements to all other unemployment insurance benefits. This varies from one region to another; in general though, these are available to groups at risk of poverty, such as lone parents, families of prisoners and the elderly. They are calculated on the basis of the average daily net wages during the three months preceding unemployment. The replacement rate was 20 per cent of the reference earnings; in 1993 and 1996 it was increased to 25 per cent and 30 per cent respectively but could not exceed 584 ECU per month (Papadopoulos, 1998a: 89). The Minimo Vitale benefit is taxable. Often disability pensions are (mis)used as


assistance benefits thus increasing their duration. Also, one can use different benefits in sequence, for example one can combine Cig and mobility benefits. In the 1990s, with the recession and the socio-political changes that took place, including the ‘Mani Polute’ (clean hands) action, which threw the ruling class out of office in an attempt to combat corruption, the need for reform became a priority in public debates on labour market policies. Active policies aimed at job creation increased in the 1990s, especially at the regional and local levels. The government introduced legislation in favour of the modification of the system of shock absorbers so as to facilitate the deregulation of employment conditions and procedures. Reforms included the creation of temporary jobs especially for those whose benefit was about to expire. Therefore, workers on mobility lists, in Cig, or the long-term unemployed could, under the temporary job schemes introduced in 1993, be employed for two years in social works. The aim was to tackle the rigidity of the Italian labour market which was until then heavily regulated. Deregulation was supported by the unions and the employers’ association, Confindustria. Hence, labour flexibility in terms of working time and conditions increased; this reduced adjustment costs during industrial restructuring and recession. Passive labour market policies were modified (law 223/91) and the ban on collective dismissals was removed. Hiring procedures were changed in that the compulsory list established under Cig was replaced by the principle of free choice, thus improving the options available to employers. Moreover, the system of social shock absorbers was modified by extending the instruments of income protection, inter alia. The use of mobility benefits, solidarity contracts and temporary reductions of working time increased. Mobility procedures and the Cig were extended to the service sector and small firms, the level of ordinary unemployment benefits was raised to 40 per cent of previous earnings, and wage rigidities were reduced. The social pacts of 1992 and 1993 inter alia abolished the scala mobile (inflationlinked wage escalator) 46 years after its introduction. Reforms of the collective bargaining system (clearly defining the roles and interrelations between the national and company/local levels) had repercussions upon labour market policy (Gualmini, 1997: 70). Therefore, in the 1990s we have a return to concertation and experimentation with consensual solutions to combat unemployment and the introduction of structural reforms. The latter ‘reorganised the entire system of job placement, creating new space for private actors in the regulation of the labour market and promoting new active policies for local development’ (Ferrera and Gualmini, 2000: 194). However, the use of Cigs, mobility benefits and early retirement schemes had negative effects too. These are summarised by Dell’Aringa and Lodovici (1996: 188–9) as follows. Hirings and lay-offs were frozen. This discouraged labour mobility in the primary sector and increased the difficulties of finding secure jobs for those with little or no experience. The


black economy expanded as workers on Cig benefits and so on preferred to work in the informal sector during the period they had a right to benefits. We saw an increase of mass dismissals, with the unions in agreement, due to the greater generosity and fewer risks associated with mobility benefits linked to collective dismissals as opposed to unemployment benefits linked to individual dismissals. In the mid-1990s, long-term unemployment amounted to 7.6 per cent of total unemployment (ISTAT, 1995). The above reforms did not remedy the problems inherent in the economic, social and geographical dualism between North and South, the sectoral dualism between competitive and non-competitive sectors, or the low level of female and youth employment. Employment services remained underdeveloped, and the implementation of training and retraining schemes had not been successful. More reforms were needed. The objective of the ‘pact for work’ approved under the Prodi government by the Minister of Labour, Treu, in 1996/7 was the reform of the employment policies. This included: decentralisation of employment offices; dismantling of the public monopoly system of mediating labour supply and demand; reform of the system of vocational training and building links with the education system; introduction of temporary work; new policies for local development; grants for job creation in the Mezzogiorno; and the reorganisation of public job schemes. This was followed by a social pact – the so called ‘Christmas pact’ of the D’Alema government – in 1998. The decentralisation of employment services was introduced and the regions and provinces are now responsible for job placement and the promotion of pro-active employment policies. This is a radical innovation in the nature and style of public regulation of the labour market. Finally, the 1999 Budget Law included provisions for reform of the social shock absorbers (passive unemployment cash benefits). So in the 1990s, ‘concertation emerged as the formal and institutional model for the mediation of interests … concertation was not only consolidated, but was also extended horizontally and vertically’ (Ferrera and Gualmini, 2000: 202). It introduced concessions for both the employers and the labour force.

Spain Employment policy reforms Until the mid-1970s, there was little problem with unemployment in Spain. Jobs were protected by the state and those who could not find jobs emigrated. Under the Franco regime, high dismissal costs (redundancy payments and administrative procedures to authorise dismissals) protected permanent jobs; work organisation was governed by labour regulations (ordenanzas labourales). Hence, during the Franco era, Spain enjoyed one of Europe’s lowest rates of unemployment (Encarnacion, 2000: 32).


After Franco’s death and the consolidation of Spanish democracy (1977), Spain’s economy opened up to the outside world. The two oil shocks in the 1970s and the rapid liberalisation of the labour market meant job losses, high inflation, tax increases and workers’ grievances over loss of purchasing power. In an environment where the two most important unions (Union General de Trabajadores [UGT] and Confederacion Sindicat de Comisiones Obreras [CCOO], close to the Socialist and Communist parties respectively) defended laws protecting permanent employees, the government had to act swiftly. Its response was a form of ‘strategic neo-corporatism’. The government ‘conceded a substantial narrowing of wage differentials and the maintenance of Francoist employment protection, in return for wage moderation and an “implicit pact” between workers and economic managers under which the costs of economic modernisation would be accepted’ (Rhodes, 1997b: 114). The willingness of employers and unions to co-operate with the state has been attributed by Rhodes (1997b: 105) to their ‘organisational weaknesses and their joint concern to avoid social conflict given the fragility of democracy’. Thus unions legitimised themselves as social actors, employers were rewarded and the state promoted modernisation of the economy. Nevertheless, this tripartism was shortlived, as further attempts in the early 1990s by the government to unload responsibility for labour market policies onto the social partners failed, resulting in introduction of new measures unilaterally. Trade unions ceased to be a critical partner of either the state or the employers, and employers felt less need to compromise with the demands of a weakened labour movement in a highly fragmented labour market. When collective bargaining was introduced after the transition to democracy, the regulation of contracts was modified under the Moncloa Accords (signed by Spain’s democratically elected leader Adolfo Suarez in 1977) and the workers’ statute of 1980. The Moncloa Accords committed political parties from different parts of the ideological spectrum to cooperation aimed at economic and political stabilisation. These, together with newly formed trade unions and employers’ associations gave support to the government’s stabilisation programme. Moderation of wages was at the heart of the programme as a strategy to combat rising inflation and deal with the inflexible wage bargaining system. Wages were fixed on predicted inflation rates. The government adopted a ‘safety valve’ approach to the employment crisis (Rhodes, 1997b: 114). It is worth noting here that subsequent pacts negotiated between 1978 and 1986 were forged in the form of tripartite agreements between government, trade unions and employers’ associations or bilateral accords between employers’ associations and the unions (for example: the Interconfederal Framework Accord signed by the Confederacion Espanola de Organizaciones Empresariales (CEOE) and the UGT, which sought to stabilise and reform industrial and labour relations and regulate pay guidelines, working hours and productivity and also to draft


the Workers’ Charter which recognised the workers’ right to strike, legitimacy of trade union representation, etc.). The National Employment Accord signed in 1982 was the first accord to be signed by all the relevant actors (employers, government and labour). Its principal aim was to confront unemployment by creating jobs in the public sector. Another accord (the Social and Economic Accord) signed in the mid-1980s sought to inject more flexibility into the labour market by reducing restriction on part-time work and seasonal employment, increasing options for temporary employment and lowering the minimum wage standards for workers under 18 (Encarnacion, 2000: 39–40). Most of these pacts, however, negotiated increases in the ‘social wage’ and stipulated increases of state spending on education, housing and various welfare benefits. Hence, from the 1980s onwards, the government’s strategy for achieving wage moderation was based on encouraging further casualisation of employment. Since 1986, however, reforms have been introduced unilaterally by the government. These were not based on social concertation,7 which by the mid-1980s had broken down. The era of co-operation was not replaced by the era of confrontation in industrial–labour relations. Democratic institutions were no longer at risk, and the concertation process seemed to be a state-led strategy of regime change lacking the institutional foundations that characterised democratic corporatism (Bermeo, 1994: 609; Martinez and Blyton, 1995: 357). One other reason given for its demise is the rising unemployment which ‘conditioned the nature of the policies that [the socialist] PSOE felt were necessary for the country to overcome its economic problems’ (Encarnacion, 2000: 42) such as fiscal austerity and structural reform. Concertation had no place in an environment characterised by a quasi-Thatcherite economic and monetary discipline and marketdriven modernisation. A key component of the reform process was deregulation of the labour market aimed at reducing the costs involved in the hiring and firing of workers. Such reforms were cutting right through the heart of the working class. In an attempt to deal with restrictive dismissal procedures, low-cost, fixed-term contracts were legalised in 1980, despite the fact that the protection of permanent contracts remained in place. These reforms were introduced with the consent of the labour movement due to the economic recession and growing unemployment. Temporary contracts were seen by the unions as a quid pro quo for their demands for a reduction of overtime as a means of employment creation (Bentolila and Dolado, 1991: 85; Fina, Meixide and Toharia, 1989: 122–4; Rhodes, 1997b: 115). The irony is that casualisation of employment proved detrimental to their strength. At the same time, new restrictions on geographical mobility and mobility between occupational categories were introduced, which prevented adjustment to market conditions (Rhodes, 1997b: 107). The social dialogue failed during the late 1980s, which was a period characterised by economic


growth. As a result, labour market reforms in the late 1980s and 1990s were introduced unilaterally by governments in consultation with employers’ associations rather than by a tripartite agreement between government, employers’ associations and the unions. The effects on employment were dramatic; the reforms had an immediate effect on unemployment rates, which declined from 22 per cent in 1986 to 16 per cent in 1990 (see Table 2.1). Nevertheless, fixed-term contracts with no firing costs introduced in the mid-1980s had a detrimental effect on training, human capital formation, innovation and productivity as these tend to discourage investment by firms in personnel training. Moreover, deregulation of fixed-term contract work led to a segmented labour market (OECD, 2000b: 54). ‘Expansion of temporary employment – which was largely “involuntary” – strengthened the bargaining power of those on a permanent contract (insiders), leading to higher wage settlements …’ (ibid.). Hence, the dualism of the Spanish labour market continued with those ‘in’ permanent contracts and hence ‘insiders’ and those ‘on the margins’ and hence more vulnerable to changes in labour demand. Those ‘on the margins’ tend to be the young and women. Trade union reactions to government attempts to encourage youth employment by reducing employers’ social security contributions and fixing payment at the level of statutory minimum wage were far from helpful. These attempts were denounced as ageist and as undermining the principle of ‘equal pay for equal work’. New reforms were introduced in the early 1990s. A bill was introduced to amend the 1980s Workers’ Statute and a decree law was introduced in 1993 on measures to reduce the budgetary costs of unemployment insurance and to promote employment via further deregulation of the labour market. New contracts were introduced aimed at combating unemployment and the expansion of the informal economy. Some were training and apprenticeship contracts but the bulk of them were contracts used for specific tasks and seasonal work. ‘Most of the one third of the work force now employed on a fixed-term basis have been recruited on such contracts’ (Rhodes, 1997b: 108). These are renewable for up to three years, unlike for example the training and apprenticeship contracts that incurred annulment costs. The fixed-term contracts did not fall outside the regulations limiting functional mobility. Moreover, apprenticeship contracts were introduced with relatively low social security contributions and reduced wages (ibid.). In addition, restrictions on part-time work were lifted and restrictive dismissal procedures were relaxed. In theory the cost of dismissal from a standard contract has been 20 days per year of service up to one year. In practice, however, the agreed sum has been higher in order to prevent claiming unfair dismissal in which case the cost rises to 45 days per year of service. Redundancy payments for collective dismissals can be around 50 days per year of service for each worker affected. In 1993, organisational and production reasons were added to the existing grounds for collective


redundancies (namely technological and economic exigencies). Later, incentives in the form of public subsidies to employers and reductions in social security contributions were provided to employers for the transformation of temporary positions into more permanent jobs. This pact was triggered by the unions’ fear of the potential of privatisation by the rightwing government which came into office in 1996 and the relative weakening of left-wing parties due to corruption and internal divisions. Although it is difficult to estimate the effects of these reforms, the sharp distinction between temporary and permanent work contracts and the cultivation of this ‘culture of temporary contracts’ may have long-term effects. These include: a downward pressure on wages; insecurity due to potential dismissals; negative effects on productivity due to the associated reduced emphasis on training; and enhanced labour market dualism. Attempts in the early 1990s to revive concertation were not successful. For example a social pact designed to ease the introduction of recent unemployment measures collapsed, as the package put forward by the government was rejected by the unions. The government could no longer convince the unions to accept its proposed labour market policies on promises of welfare expansion – employers’ social costs are high and budgetary restrictions tighter than ever. Unemployment As illustrated earlier in this chapter, unemployment in Spain is much higher than in other Southern European countries, reaching its peak in 1994. According to Argandona (1997: 197), even if one takes into account participation in the informal economy, unemployment is only reduced by around 3.5 per cent, that is to approximately 20–21 per cent. One could include among the factors contributing to the rise in unemployment the rather generous unemployment benefits.8 In the 1980s we saw the expansion of the unemployment benefit coverage from 25–70 per cent of the workforce. Unemployment benefits became more generous. They were untaxed until January 1994, and paid on a sliding scale of 80 per cent of previous income in the first six months, 70 per cent from six to 12 months and 60 per cent from 12–24 months. In 1992, a number of changes were introduced in entitlements to unemployment benefits in order to reduce the disincentives to work. The minimum period of work to qualify for benefits was increased from six months to one year. The duration of benefits was reduced from an average of 20–12 months. Unemployment insurance9 coverage fell to 62 per cent in the mid-1990s. A lump sum unemployment insurance benefit was abandoned and eligibility requirements were tightened up. The beginning of benefits was delayed until the exhaustion of severance payments. Long-term unemployment was concentrated in groups which have no entitlement to unemployment


benefits such as the young and women with no work experience. A number of controls were introduced against fraud in addition to making unemployment insurance benefits subject to social security contributions. This succeeded in reducing the budgetary cost of unemployment insurance by 33 per cent. Other schemes which could contribute to a reduction of the unemployment rate are: lump sums to the long-term unemployed who decide to become self-employed; higher subsidies for employment and vocational training of people with special needs; and various initiatives related to working time and vocational training. It is to the last two that we will now turn our attention. Working time Work sharing was initially non-existent in Spain, while the extent of parttime work has been limited. Part-time work has not become popular despite the fact that it was facilitated by the 1984 employment reforms. In 1993, only 6.3 per cent of workers were employed part-time (Grubb and Wells, 1994: 31). This has to do partly with the fact that it incurred the same social security costs for employers as full time work. In 1993 new reforms were designed to make part-time work more attractive. Under these reforms, employers’ contributions have been relaxed for those employed less than 12 hours per week and they cover only industrial accidents, workrelated illnesses and payment of wages. Furthermore, in 1993 overtime was made less attractive to employees by replacing premium rates for overtime (75 per cent above ordinary rates) with standard ones. Moreover, a system of early retirement (without this being compulsory) allows companies to rejuvenate their workforce. For example, workers received 60 per cent of their state pension entitlement at the age of 60, 76 per cent at age 62, and 92 per cent at age 64. Jobs could also be created or saved by reducing hours of work to 35 hours per week, a policy proposal opposed by the Spanish government during EU negotiations. Since 1999, legislation concerning part-time and temporary work has been modified. The new legislation aims at boosting these by reducing social security contributions on new part-time permanent contracts and equalising accrued rights of pensions to those on full-time contracts. Vocational training Fixed-term contracts, labour market segmentation and high labour volatility have had a detrimental effect on training. Firms adopted a short-term outlook towards competitiveness and hence there was little investment in human capital formation (Rhodes, 1997b: 117). The national vocational training system has been deficient. This is partly due to poor co-ordination between the three basic training bodies, namely the Foundation for Vocational Training, the Ministry of Education and the Public Employment


Office. Under the National Programme of Professional Training (1993–6) some activities were transferred to the regions. Some regions (the Basque Country, Valencia) have more flexible and effective training structures than other regions depleted by unemployment such as Andalucia, where the institutional infrastructure remains inadequate (Rhodes, 1995). In 1999, active labour market policies received funding amounting to 0.7 per cent of the GDP, but no systematic research exists on the implementation of these policies and their effectiveness. Nevertheless, participation in training programmes is weak when compared to other OECD countries (Spain ranks 19th among the 24 OECD countries) (OECD, 1999a). Employment protection legislation tends to reduce the turnover of core workers and leads to employers treating temporary workers not covered by such legislation as cheap, rather than providing incentives for workers to embark on firm-specific training programmes by undergoing a period of lower earnings, or for firms to provide general training for their employees (OECD, 2000b: 55). Hence workers in temporary jobs experience difficulties in securing access to more stable jobs. Instead, they tend to move from one temporary job to another or to rotate from a temporary job to unemployment and then back to another temporary job. The young are especially affected by this phenomenon, as almost 75 per cent of them work on fixed-term contracts (ibid.). On the other hand, the plethora of fixed-term contracts and the high unemployment rate do not mean downward pressure on wages since wages are negotiated by core workers with stable jobs sheltered from unemployment risks. Lower wages paid to temporary workers tend to compensate for higher wages paid to core workers. The level of employment protection legislation was reduced through the 1997 labour market reform under which a new permanent contract with lower firing costs was introduced for the recruitment of those exposed to unemployment (for example: youth, long-term unemployed and so on). This was reinforced by cuts in social security contributions over a two-year period. Individual dismissals were justified with lower severance payments. Agreement to avoid renegotiations of wage settlements at different bargaining levels was reached between social partners. Since the reform was implemented, the unemployment rate has dropped while the number of permanent contracts has increased (OECD, 2000b: 57). However, the proportion of workers under fixed-term contracts has remained at approximately 33 per cent of total employment reflecting an increase of fixed-term contracts in the public sector, while there was an increase in part-time contracts as a result of a new subsidised part-time contract in January 1999. Permanent contracts increased as well (2 million such contracts were signed from January 1998 to October 1999) (OECD, 2000b: 27). Incentives will be extended and redesigned to benefit groups of workers whose employability in permanent employment has not increased.


Portugal Employment policy reforms In the late 1970s and the early 1980s the Portuguese economy suffered from severe structural problems associated inter alia with a large inefficient primary sector, an inefficient secondary sector, high state intervention in price regulation and market processes, and bad infrastructure. Despite these problems the Portuguese labour market has performed very well since the mid-1980s. Labour supplies continued to be absorbed and unemployment remained low by EU standards (see Table 2.1). This was in spite of job losses in the primary sector and increasing female participation rates in the secondary and tertiary sectors, low educational qualifications (resulting in low-skilled labour) even by South European standards and a relatively low percentage of salaried workers when compared with Greece, for example. This is partly due to the fact that the Portuguese labour market displays a high degree of flexibility in spite of the rigidity in much of labour market legislation. Since 1990, Portugal has been ahead of Greece in terms of GDP per capita. Greece now occupies the lowest position among the EU member states. Of course wage dispersion and earnings differentials are high. Legislation supporting atypical forms of work was introduced earlier in Portugal than in Spain: legislation on fixed-term contracts was introduced in 1976. At the time, despite reforms introduced as far back as in the 1960s to permit collective agreements on wages, unions had little power to negotiate salaries, work conditions and labour relations. Wages were low, often supplemented by agricultural production for self-consumption, petty-trade and remittances from emigrants. It was after the revolution of 1974 that union rights improved and collective bargaining, minimum wages and social security-related reforms were introduced (many of which were included in the 1976 constitution). Among the most important changes were the establishment of minimum and maximum wages; paid vacations; a shorter working week; limits on collective and individual hiring and firing; and the payment of a 14th wage. Fixed-term contracts were important for employment growth in the 1980s, when employers were trying to cope with the stringent restrictions associated with dismissal regulations (no severance payment was due for workers employed on an atypical basis). In 1983, non-permanent contracts accounted for approximately 23 per cent of wage employment. By the end of the 1980s, new legislation introduced measures which made non-permanent contracts more difficult. For example, severance payments for atypical work were introduced; nonpermanent workers were given an incentive to move to permanent jobs and the conditions under which such contracts could be used were limited. As a result, there was a decline in temporary contracts in the 1990s and by the mid-1990s non-permanent contracts accounted for approximately 12 per cent of wage employment.


The present mechanism of social concertation was introduced in 1984. Since then, wide social pacts have been concluded in the context of a strategic framework for improving national competitiveness in the sphere of the economy. As a result, changes in incomes policy, tax regimes, pensions, benefits and vocational training were introduced. One of the most important agreements reached was the Economic and Social Agreement of 1990. It focused on improving the international competitiveness of Portuguese firms and on promoting the growth of real wages, the target being the EU average, under non-inflationary conditions. The 1990 agreement paved the way for a wider reform of labour law in line with employers’ pressures. In addition, a recommendation on working time to be reduced to 40 hours per week by 1995 was introduced and flexibilisation of work schedules was encouraged; implementation would be decided by collective agreements. However, due to problems with implementation, the socialist government imposed the 40-hour work week by law in 1996. Another important step towards the reinforcement of social concertation is the so-called ‘short-term social pact’ signed in 1996. The agreement, inter alia introduced regulations for child labour, adopted a policy of local initiative programmes for job creation and facilitated the implementation of measures such as a more flexible organisation of working time based on functional flexibility. In addition, the regulations governing temporary and part-time work were revised, the goal being to create incentives for part-time work. Changes in the social security system initiated by this accord are discussed in Chapter 4. Moreover, a minimum income scheme was introduced, while the maximum period for unemployment assistance payments was increased to 15 months for those whose unemployment insurance benefits had been exhausted and to 30 months in other cases. The pact also introduced training measures, including on-thejob training. Portugal still suffers from a low level of educational attainment as many young people tend to leave school without qualifications. The mechanisms for the transition from school to working life tend to be insufficient. Consequently, the development of skills and competencies is a priority. This is important as it is likely to facilitate re-employment and reduce the vulnerability of those who lost their jobs and those at risk (for example, young people who want to enter the labour market for the first time). A specific programme aimed at developing youth information and educational guidance (AZIMUTE) was introduced in the late 1990s and employment training programmes are being restructured to meet the needs of target groups; programmes are now monitored more systematically (introduction of performance indicators). A quarter of all the unemployed can benefit from active labour market policies (OECD, 1999b: 113). Such schemes are also preventive in that their purpose is to ensure adaptability of the target groups to changing needs.


In 1998 and 1999 employment increased at an annual rate of about 2.5 per cent (OECD, 1999b) because of the boom in the construction industry and services. Youth unemployment is one of the lowest in Europe (10.3 per cent in 1998). Self-employment is higher than in the other OECD countries (with the exception of Greece and Turkey). Its share is approximately 26 per cent of total employment, while the proportion of part-time work remains one of the lowest in the OECD (estimated at approximately 11 per cent of total employment) (ibid.). Long-term unemployment is, however, of some concern. Unemployment Before the mid-1970s, unemployment figures were so low (see Table 2.1) that the terms ‘unemployment’ or ‘unemployed’ were rarely mentioned in labour market studies in Portugal. Most preferred to include the unemployed in a wider group of ‘non-active’ individuals, which included the retired. In those days surplus labour was absorbed by emigration and the military. In the mid-1970s, unemployment started to rise. It increased from 1.3 per cent of the active population in the early 1970s to 7.9 per cent in the late 1970s (see Table 2.1). This was a result of the oil shock, the aftermath of de-colonisation and the half a million retornados (returnees) from former colonies10 as well as the tightening up of immigration laws in receiving countries which up till then served as a destination for surplus labour. Despite efforts made to create jobs, unemployment has remained relatively high in comparison to the early 1970s. Nevertheless, in the mid1990s, Portugal’s unemployment rate (7.3 per cent in 1995 and 4.7 per cent in 1999) was far below that of Greece, Italy and Spain, and of the EU average (10.7 per cent in 1995 and 9.6 per cent in 1999) (see Table 2.1). The gap between male and female unemployment is small compared to Spain, for example. Female youth unemployment decreased between the mid1980s and the early 1990s. Young workers seem to have better prospects of finding a job than adult women over 24. Those at risk are mainly women with an intermediary level of education and job experience who have taken time off to attend to family responsibilities. Large-scale restructuring, plant closures and downsizing during the recession that erupted in 1991 increased the risks of unemployment. Regional inequalities in terms of unemployment are less marked in Portugal than they are in Spain (for example, Andalusia, Extremadura) and Italy (mainly the South). Having said that, unemployment is lower in northern and central regions and highest in the South (for example, the unemployment rate in Alentejo is nowadays above 11 per cent; in Setubal in the mid-1980s it reached the 20 per cent figure) (Marques, 2000: 188). Today, ‘because of the central role ascribed to the state, the ideology and political action of political parties place a great deal of emphasis on the problem of employment and unemployment’ (Bacalhau and Bruneau,


2000: 138). Three nationwide surveys were carried out in 1978, 1984 and 1993 by Bacalhau and Bruneau (2000) on public perceptions about unemployment covering the whole of Continental Portugal. In the 1993 survey in particular, unemployment was perceived as a very important social problem faced by Portuguese society. Respondents pointed to the government as agents for resolving the problem. Therefore unemployment is politically important in Portugal. Since the mid-1970s however, social security in Portugal is governed by the parameters of the 1976 constitution. The unemployment insurance scheme was introduced in 1974. Decree Law No. 20 of 1985 extended unemployment benefit rights, calculated as a direct percentage of former earnings, to those who had lost their jobs. The unemployment compensation system consists of two schemes: unemployment insurance (which applies to all the insured); and unemployment assistance (which applies only to full-time employees and is a means-tested benefit). Unemployment insurance benefits are granted to those who have been rendered unemployed involuntarily, are available for and capable of work and have registered at the employment office. They must not be in receipt of invalidity or old age pensions (for details on the latter see Chapter 4). If one has exhausted the entitlement for unemployment insurance benefits, one can claim unemployment assistance. Moreover, there is an early retirement scheme. In 1997, a scheme for a guaranteed minimum income was established. This was an important development in a climate of slow economic growth (0.7 per cent on average in the early 1990s as opposed to 4.8 per cent on average in the late 1980s) (Hampson, 1997: 172). The duration of benefits depends on the age of the claimant. For example, the entitlement to unemployment insurance benefits is up to ten months for those under the age of 25 and up to 33 months for those aged 55 or over. In 1988, significant reforms contributed to the improvement of benefits and the widening of coverage to include new entrants into the labour force. Nevertheless, access to unemployment benefits is limited. Entitlements to unemployment benefits are strict in that they require three years’ uninterrupted insurance contributions. Earnings from part-time work lead to the suspension of unemployment insurance. An unemployment assistance scheme provides means-tested benefits to those who are not entitled to unemployment insurance. In the mid-1990s, people receiving financial aid received on average ‘the equivalent of the minimum wage (about US $350 per month) which is less than half of the national average earnings, which in turn are the lowest in the European Union … [Moreover] redundancy payments and unemployment benefits rose together only from 0.2 to 0.4 per cent of family incomes’ (Cabral, 2000: 232). Hence, the incentives to indulge in voluntary unemployment are simply not there. Pluriactivity and participation in vocational training schemes conceal pervasive underemployment.


Vocational training Vocational training was traditionally linked to schools and in the past there were few guidance services specifically for adults. In the mid-1980s, only 5 per cent of young people were receiving any technical or vocational training. By the end of the 1980s, vocational guidance was only available in about one-third of schools. Various attempts have been made to rationalise non-school vocational training in recent years. These are managed by the Employment and Vocational Training Institute. It is organised on a regional basis and is responsible for the implementation of employment policy, management of employment grants and training programmes. A new institution (INFONOR) established in 1996 aims at enhancing innovative procedures in training. Nowadays, a large number of young people are kept off the ‘dole’ thanks to a set of ‘vocational training courses’ financed by the EU and a series of schemes subsidising self-employment. The number of people estimated to be kept off the ‘dole’ in the mid-1990s was around 150,000 (Cabral, 2000: 232). Many of the resources for the development of active labour market policies come from the European Social Fund. In the period 1994–99 the funds allocated to Portugal amounted to 2,654 million ECUs. Despite this, in comparison with other Southern European member states, educational opportunities remain limited, which makes training important as a mechanism for compensating for the lack of general educational opportunities (Rhodes, 1995: 312–13). However, the success of the existing training system is low and requires further development ‘establishing nationally recognised standards in skill and development’ (OECD, 1996a, 1991). An individualised programme with systematic interaction combining training, guidance, and job entry was introduced in mid-1998 for the long-term unemployed.11

Greece Employment policy reforms The Greek ‘formal’ labour market seems to be more inflexible than that of the other three countries. The 1980s were characterised by strong government intervention in setting higher minimum wages not always in line with changes in productivity or levels of unemployment. This may have been necessary, because the minimum wages have been among the lowest in Europe, but it had a negative effect on unemployment, which became an acute problem especially among the young and women. To tackle the problems of rising unemployment, policy reforms were introduced in the 1990s by the government in a unilateral way, that is without the consensus of the trade unions. These included the abandonment of the automatic inflation indexation system for wages. The employment laws which were passed in 1996 and in 2001 provided incentives for


job creation and improvement in the functioning of the OAED.12 Reforms in the vocational training system and regulations for the funding of vocational training were also introduced in an attempt to avoid corruption and to improve its functioning. Moreover, the launching of the social dialogue between social partners (employers, employees) and the state in 1997 and again in 2000 put the issues of work flexibility and the shift from passive to active labour market measures on the agenda. The policy measures put on the agenda by government officials were inter alia the following: ●

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In times of high demand for labour, employees can work up to ten hours per day or 40 hours per week, while at times of low demand their working time can be reduced. Work time flexibility is aimed at reducing overtime work and associated costs and provides incentives for job creation. Hence workers who in the past were employed for extra hours during peak seasons now lose their overtime pay. Institutionalisation of part-time work in the public sector. Setting a ceiling as to the maximum percentage of part-time workers in the private and public sectors. Introduction of early retirement schemes and cuts in pensions of those who have a job generating an income of around or above 800 euros per month. Social protection measures for those in atypical work. Reduction in the non-wage labour costs for employment by enterprises of people in groups hit by unemployment (for example, the unemployed over 50 years of age, the young or the unemployed in sectors hit by recession such as textiles, the steel industry and shipbuilding). Measures combating evasion of contributions to IKA by firms which have proceeded to dismissals but failed to pay off their debt to IKA. Encouragement of the formation of local employment pacts between enterprises, OAED and various social actors by providing subsidies to enterprises operating in areas hit by deindustrialisation and hence unemployment (for example, subsidies towards non-wage labour costs, subsidies towards training programmes, and so on) willing to enter into such pacts. Decrease of dismissal compensation paid by firms to salaried workers.

These issues have been opposed by representatives of the Confederation of Trade Unions of Greece (GSEE) and parties of the opposition. The employment pacts were seen by GSEE as a way of introducing flexibilisation through the back door. GSEE has proposed the reduction of working time to 35 hours per week without reduction in salaries, as a measure for combating unemployment. The Association of Greek Industrialists (SEV) however, proposed the introduction of two-speed unemployment benefits: one for six months from OAED and one for a longer period from the state budget. They also suggested more work flexibility, flexible wages, work sharing,


relaxation of the strict conditions concerning group dismissals, exemption of up to two years for employers from paying contributions for newly employed persons and reduction of employers’ contributions to LAEK (the Fund for Employment and Vocational Training managed by OAED). Due to the great divergence of positions of the two parts, the social dialogue produced no concensus and hence the government decided to introduce new legislative measures unilaterally covering most of the above mentioned measures aimed at the deregulation of the labour market. Such ineffectiveness on the part of the unions may further erode union credibility and strength, unless the particular demands of those employed in the informal sector (women, the young, migrants) and the unemployed can effectively be articulated along with those of the rest of the union movement. Working time Elaborate labour market legislation regulating working time was introduced in the 1980s and much of it still remains in place. Law 1387 of 1983 sets limits on the number of employees who can be dismissed (around 2–3 per cent per month). Other pieces of legislation regulate overtime, weekly rest periods and night work. Legislation aimed at increasing flexibility of working time was introduced in the 1990s. Part-time work as well as fixedterm contracts were strongly supported alongside the possibility of using a fourth shift. These were seen by the government as steps towards stimulating productivity and job creation. However, little use of these types of contract has been made, due perhaps to the large informal sector, where most of these jobs are to be found. ‘Plant-level flexibility has led neither to productivity-increasing technological upgrading nor to sustaining job creation’ (Seferiades, 2000: 65). Informal activities do of course contribute to unemployment relief (Leontidou, 1993). The paradox is that at the same time we have a growing ‘crisis of informalisation’ with an increase in the informal/invisible jobless rate (Seferiades, 2000: 65). New legislation introduced in 1998 encouraged further flexibilisation (see above) in an attempt to preserve existing jobs and the formation of new ones. The five main innovations stipulated are the following: 1. reduction of overtime costs by calculating working time over a longer period (thus permitting work of up to ten hours per day with a limit of a 48-hour week); 2. introduction of employment contracts based on a national minimum wage in areas of high unemployment (opting out, in other words, from collective agreements signed at the firm or the sectoral level); 3. promotion of part-time work as this amounts in Greece to only 4 per cent of total employment; 4. increasing the effectiveness of existing active labour market programmes – new employment subsidy programmes run by the Organisation for the


Employment of the Labour Force (OAED) through new centres for the promotion of employment, providing the young unemployed the opportunity to gain work experience; 5. use of labour inspectors. (OECD, 1998a: 70–72) Unemployment13 Until the mid-1970s unemployment was not seen as a major problem in Greece. Unemployment was kept low by means of massive emigration during the period 1955–75, a bloated public sector,14 a long tradition of selfemployment and ungenerous unemployment benefits (see below) creating a disincentive for people to remain unemployed. The situation has changed since then. Although unemployment in Greece is not as high as it is in Spain, Greece is cited as the second highest unemployment country of the EU in the relevant literature (Symes, 1995). The rates of youth (29.8 per cent of the total number of unemployed in 1995) and long-term unemployment (52.4 per cent in 1995) have been particularly worrisome (Seferiades, 2000: 60). Reasons cited in the literature include: structural rigidities associated with the employment protection legislation mentioned above, which in turn restricts flexibility and raises labour costs (European Commission, 1997a: 38); increased participation of women in the labour market; contraction of employment in the primary sector; and lack of investments, especially by the private sector. Nevertheless, one has to acknowledge that these structural rigidities operate alongside a flexible informal economy. Unemployment is characterised by dualism, hitting certain social groups, such as first-time job-seekers and women, hard (Karakatsanis, 2000: 241). This reflects traditional cultural norms and practices, whereby the male breadwinner is expected to be the main provider in the family. It is worth noting here that ‘social criteria’ (such as family status, number of children, level of family income, etc.) rather than professional qualifications and work experience per se, were in the 1980s an important factor for getting a job in the public sector, especially in low-ranking posts. One of the most important coping mechanisms is the strong support offered by the family to its unemployed or underemployed members (see Chapter 3). ‘The quid pro quo relations inherent in both Greek political clientelism as well as in personal familism have protected most Greeks against the negative consequences of unemployment by informally institutionalising several stop-gap measures’ (Karakatsanis, 2000: 245). One such measure has traditionally been the extensive patronage-based recruitment to the Greek public sector, the latter acting as the main source of employment creation especially during periods when governments sought to bolster their electoral support. As people retired (early retirement was encouraged with generous pensions) freeing up public sector positions, new party faithfuls entered. ‘From 1981 to 1990, general government employment grew at three times the rate of


private-sector employment, increasing at a rate of approximately 30 per cent of the Greek workforce – about double the OECD average’ (ibid.: 251). The public sector, alongside a highly rigid labour market awarding generous severance payments to dismissed workers, restricting dismissals and preventing unilateral reductions in working hours by management, were acting as a shield against increases in unemployment rates. Since 1994 and the introduction of law 2190/1994, which aimed at establishing an objective and transparent system of recruitment to the public sector, the traditional clientelistic practices have allegedly subsided. Moreover, because the process of joining the EMU has exerted pressure towards the retrenchment of public expenses (due to the criteria thresholds of article 109 of the Treaty of the European Union which Greece has tried to fulfil) there has been a slight decrease in the numbers employed in public administration. In consequence, the public sector can no longer play its traditional role as a safety valve against the pressures of unemployment. This gap in social protection by the public sector is partially filled by the civil society, especially by family and kin (see Chapter 3). Passive measures for the unemployed In Greece, there is no national minimum income scheme for individuals and families with insufficient resources. No general non-contributory minimum exists (European Commission, 1999a: 458):15 Thus, a person who is neither old nor has special needs, but has neither a job nor contributory entitlements nor source of income, is not entitled to any support from the state, as evidence of low income and of living in poverty are not in themselves enough to entitle one to any support from the state. (Ferrera, 1996: 20) An unemployment benefit scheme is available for first-time job-seekers between 20 and 29 years of age and for some repatriate groups (European Commission, 1999a: 412, 518). Unemployment benefits are granted on a contributory basis (financed by employers’ and employees’ contributions – the two parties contribute 3 per cent and 1 per cent of gross salary respectively).16 The benefits are not generous and last for a relatively short time. Eligibility depends on a number of factors: the applicant must have worked at least 125 days during the 14 months prior to the termination of employment (different regulations exist for those employed on a seasonal basis). Hence, of those registered as unemployed, only about half receive unemployment benefits. The duration of the benefit depends on the number of days the applicant has worked over the 14 months prior to dismissal, as well as on the person’s age. Those who have worked 125 days receive the benefits for five months


whereas those who have worked for 300 days or more receive them for a year (Demekas and Kontolemis, 1997: 35). Such meagre benefits are unlikely to create work disincentives or the risk of an unemployment trap. Young people who have never worked are not entitled to receive unemployment benefits. The only allowance given to the young unemployed (aged between 20 and 29) is of short duration (five months only) and rather modest (25,000 drachmas per month) (Law 1545/1985), that is approximately one-fifth of the minimum salary. Those eligible must have been registered as unemployed within three months after having completed either their 20th year of age or their military service or obtained a degree or finished their studies. The benefit is granted after having remained unemployed for a year or having earned less than 80 wages within a year. This gap in social protection by the public sector is filled by other sectors, namely the family and kin. Parents have the obligation to support their children until they get full employment. Other actors include some particularistic networks, the informal sector and the Greek Orthodox Church (Leontidou, 1993; Symeonidou, 1995; Cavounidis, 1996; Karantinos et al., 1992: 34–5; Katrougalos, 1996: 56). Vocational training A coherent and systematic policy of vocational training is still lacking in Greece. The low unemployment rates of the 1970s and early 1980s (see Table 2.1) provide a partial explanation. During the 1980s, ‘the active labour market policies, especially in the field of vocational training and reorientation of unemployed people remained rudimentary and did not have any considerable influence on the overall structure of the social protection system (Law 1116/1981, Law 1262/1982)’ (Katrougalos, 1996: 54). Spending on labour market programmes increased rapidly in the 1980s – between 1985 and 1987 public expenditure on such programmes increased by 63 per cent in nominal terms (Karantinos et al., 1992: 27; Stathopoulos, 1996). However it still remains the lowest in the EU, absorbing 0.39 per cent of the GDP in 1992 (Katrougalos, 1996: 54). With regard to active employment measures such as vocational training and subsidised employment, these are rather rudimentary when compared with other EU countries, such as Portugal (0.33 per cent, 0.07 per cent), Denmark (0.47 per cent, 0.43 per cent), Germany (0.42 per cent, 0.34 per cent), France (0.44 per cent, 0.26 per cent) and Ireland (0.48 per cent, 0.43 per cent) amounting to only 0.16 per cent and 0.08 per cent respectively of the GDP in the early 1990s (OECD, 1995, cited in Petmesidou, 1996a: 341). The active labour market policies (training, subsidised employment) in operation since the late 1980s are mainly funded by the European Social Fund (ESF) and other EU programmes.17 These mainly aim at providing vocational training to young people with no qualifications (school drop-outs) and at helping those who have skills to update them, as well as promoting


self-employment (Symes, 1995: 40). These came about as part of the European Community’s transition programme (1982–7) aimed at facilitating the transition from school to work for those aged 14–18 and to prepare young disadvantaged people for a better entry into adult and working life (Blakely, 1990: 16). Other programmes were introduced under the third phase (1984–9) of the Young Worker Programme whose objectives were, inter alia, to enable participants (aged between 18 and 28) to gain vocational experience. An integrated approach started to emerge from 1989 onwards, when the social dimension of the then European Community was advanced further. Young people also benefited under the Social Charter of 1989 that Greece had signed. They were to be entitled to ‘initial vocational training of a sufficient duration to enable them to adapt to the requirements of their future working life’ (point 23). Moreover, Greek ‘youth’ benefited from programmes introduced in the late 1980s, such as Petra (1987) which aimed to enhance the participation of young workers in networks of training activities, and Youthstart, which brought the problem of youth unemployment in the forefront of the political debate and agenda for action. It identified young people as one of the groups especially encountering problems in the labour market, a cohort in need of special attention. Regarding national efforts, the Greek Manpower Employment Organisation (OAED) provides subsidies to employers for hiring young unemployed people (aged between 18 and 25). It also gives subsidies to young people for creating their own micro-businesses and especially to those who set up a business in a ‘high in unemployment area’ (mainly deindustrialised areas such as Lavrion, North Evia, Patra etc.). In addition, it provides financial assistance to those who employ disadvantaged groups, such as young delinquents, refugees, migrants, people with special needs, ex-drug addicts and lone parents. Moreover, since the late 1980s the resources for vocational training schemes have been increasing, as Community aid helped to increase the percentage of GDP devoted to education by an average of 0.22 per cent, and contributed to the introduction of some active labour market measures (European Commission, 1995b: 22). A thorough evaluation of the impact of ESF funding in Greece is lacking. Nevertheless, as Petmesidou (1996a: 342) notes, quoting a former minister of labour, ‘the 700 billion drachmas of the first CSF [Community Support Framework (1989–93)] for the labour market policy were spent “without planning, without a developmental and social policy orientation and, consequently, without any substantial impact on the enhancement of human resources” ’. During the implementation of the First Support Framework, a large number of fictitious centres for vocational training (KEKs) sprang up. These totally lacked any experience and know-how in organising and delivering such training courses. Their primary aim was to appropriate the financial resources available from the ESF ‘while workers and the unemployed cooperated with this colossal manipulation in return for meagre benefits’


(Petmesidou, 1996a: 342). The picture has slightly improved since the implementation of the Second Support Framework (1994–99); this is due to the introduction of new legislation aimed at rationalising vocational training by allowing only certified centres to deliver training courses (ibid.). An evaluation of these projects and their success in combating youth unemployment is, however, lacking. Moreover, the institutions responsible for the implementation of the programmes do not keep records of who benefited and in what way. As a result, an evaluation of these programmes becomes almost impossible (interview with officials in the National Institute of Labour).

Conclusion This chapter has concentrated on employment and labour market policies in Southern Europe. Policy-makers had to deal with demands for flexibility and efficiency in a labour market which is highly heterogeneous and fragmented, creating cohorts of marginalisation and different forms and degrees of exclusion, especially amongst undocumented migrants, the young, etc. In all four countries the debate among policy-makers about how best to tackle unemployment focused in the 1980s and more so in the 1990s on labour market flexibility as a way of boosting the employment figures. The labour market flexibility issue, whether numerical, wage-level or working-time flexibility (fixed-term, part-time or temporary), is, however, much more complicated than was once thought to be. It is closely linked to unemployment benefit systems as well as to demands for vocational training and new support structures promoting collaboration between various social actors and the state. At the level of wages, all four countries have accepted the EU minimum wage regulations. Could these be reformed to allow for sub-minimum wages at regional and local levels thus taking into account variations in supply and demand of labour, skills etc.? Would this contribute to the creation of jobs? Unemployment in Southern Europe is not always associated with the loss of a steady full-time job, as it may result from inability to get a job in the first place by those outside the labour force who face difficulties in making the initial entry into employment (for example, the young and people in early retirement). Often regular and marginal employment go hand in hand. Full-time employment in the informal sector may result in uncompensated unemployment. Variations in labour market structures and policies, and the interrelation between the formal and informal sectors make conclusive interpretations of such issues and related policies risky and cumbersome and invite relative, partial and inconclusive answers. As shown in the next chapter, household organisation and social structures impact on patterns of economic activity and on the degree of protection different people seeking work may have. For example, eligibility


requirements for job-seekers can become flexible if someone has the right connections in the public sector. The case of participation in training programmes which affect prospects of recruitment is similar. Also, women tend to concentrate on atypical forms of employment. Hence ‘eligibility conditions based on a continuous employment history and minimum weekly hours or earnings thresholds exacerbate women’s unequal access to benefits’ (Grimshaw and Rubery, 1997: 293). Finally, the family may be assigned a subsidiary welfare role that may lead people to consider themselves inactive rather than unemployed. This is particularly relevant to young people and to women. In terms of other types of flexibility, although all four countries have a weak welfare state, elaborate labour market legislation has been introduced, aimed at regulating employment and working time. Moreover, the informal sector and clientelistic networks may reduce the risk of unemployment through atypical forms of support for participation in active labour market policies, for instance. Regarding social dialogue, in Italy and Portugal we have the re-emergence of concertation in the 1990s, with wide-ranging social agreements which have led to reforms in working conditions, welfare provision, etc. In Spain on the other hand, social concertation slowed down after attempts at promoting social pacts in the late 1970s and early 1980s. The fixed-term, unemployed and informal workforce remain beyond the reach of the major unions, like GSEE in Greece, linked to the PASOK and UGT (Union General de Trabajadores) which are under the umbrella of the Socialist Party and CCOO (Confederacion Sindicat de Comisiones Obreras) in Spain which is close to the Spanish Communist Party. As the social solidarities of the past are weakening, organised labour finds it difficult to find a means to successfully represent the interests of the highly segmented labour force in Spain (Burgess, 2000; Encarnacion, 2000) and Greece (Seferiades, 2000). In all four countries trade union support has dropped over the last two decades and trade union discourse has lost its appeal as ‘the voice of labour against capitalism’. Other forms of solidarity and alliances are currently in the process of being built along ethnic rather than class lines. Rising unemployment has become a salient political issue in Southern Europe in general and in Spain in particular. Compensatory policies for the unemployed have been key components of trade union lobbying. However, the benefits offered vary from one state to another and from one region to another. Italy’s benefits are very modest when compared to Spain’s and Portugal’s (Fawcett and Papadopoulos, 1997: 15), while in Greece benefits are the lowest in the EU (Symeonidou, 1996: 73). Moreover, access to benefits varies in that large numbers of people lose their benefits over time, while others do not qualify for state compensation schemes as the work they do is not bound up with official definitions of work, namely that recognised and regulated by the state. As Bermeo (2000b: 269) puts it, ‘the


wage economies of Portugal, Spain, Italy and Greece are supplemented by sizeable non-wage and informal economies and both of these supplemental economies help to mitigate unemployment’s most negative effects’ by providing an important source of income for those officially unemployed. A wide range of activities, including clandestine work in all sectors of the economy, provide an alternative process of income generation intimately bound up with the formal economy of these countries and is deeply embedded in the social fabric of Southern European societies (Mingione and Magatti, 1995).

3 Gender Inequalities, Family and Social Welfare: Continuity and Change

Introduction Until the 1990s, comparative work on the gendered dimensions of systems of social provision in Southern Europe was rather scarce. The short-sightedness of male-centred approaches has contributed to mystifying the bases of male domination and female subordination in these societies. Recent years have seen the proliferation of single-country studies, formulating generalisations and thus overlooking differences in the form and degree of gender inequality within these countries. In this chapter we shall show how the triad of institutions – the welfare state, the family and the labour market in Greece, Italy, Spain and Portugal – interact, shaping the specific gender orders by which relationships between men and women are constructed. Taking into account cultural assumptions and legal stipulations about the rights and obligations attributed to men and women, we will look at the different aspects through which gender inequality is manifested (especially, participation in the labour market, women’s role in the family and household, the discrimination of women within social security), touching upon themes of change and continuity across systems of social provision. As Orloff (2000: 2) put it, ‘the relationship among welfare states, families and labour markets provides an explanation for the prevailing “gender cultures” in Southern Europe’. The following questions are addressed: how do women and men in Southern Europe reconcile employment and family life? To what extent does social policy in Southern Europe reinforce a male breadwinner/female care-provider model of the family? We will try to answer these questions by looking at labour-force participation for men and women in brief (for more details see Chapter 2), the role of the family and of the church in encouraging traditional gender roles, and the role of the Southern European welfare states in discouraging gender equality. 69


A rapid transformation in the role of women in Southern European societies has taken place during the last two decades or so. As a result the gap between old and new generations and also between rural and urban settings has broadened. Young women and especially those living in large cities, do seem to aspire to greater involvement in paid work than their parents’ generation; older patterns of behaviour are breaking; as we shall show below; there is a rural–urban difference as well as a difference between cohorts of population depending on their age, education, income etc. As Gonzalez, Jurado and Naldini (2000: 11) put it, ‘this situation defines, as it were, a transitional phase in between two different gender orders, when elements of tradition and modernity continue together’. Hence, the importance of cross-national and sub-national differences on issues such as family change or women’s involvement in the labour market must not be overlooked; it is important to stress these two dimensions of change and continuity of gender roles in both the private and public domains. Moreover, although the lack of services and employment opportunities vary from one location to another, a distinctive familistic culture in all four countries encourages reliance on the family. The primacy of the family in welfare provision raises questions about the type of gender relations within and outside the household that family policies in Southern Europe sustain and legitimise.

Gender, family and the welfare state The family in Southern Europe is a strong institution. It is defined as a social unit founded on heterosexual marriage. Discriminating effects result from the privileged treatment of this special kind of living arrangement (for example, constitutional rights are offered only to heterosexual married couples) which in turn determines eligibility for tax relief and social security entitlements. Thus different forms of interpersonal relationships and personal living arrangements, such as, for example, same sex partnerships and other forms of relationships outside the traditional form of marriage, are either not supported by social policies or not equally protected and discriminated against by the social security systems of the Southern European member states. An exception is Italy, where since the late 1980s cohabiting couples could officially register their partnership (Hantrais, 1995: 88–9). This intolerance to difference has to do with values and beliefs embedded in Southern European cultures which prescribe different kinds of behaviour for men and for women and imply restrictions on women’s freedom. According to the so-called ‘honour and shame value system’, a woman must preserve her sexual purity whereas a man must defend his and his family’s honour. Women have to be protected from the sexual advances of men, as men’s reputation/honour largely depends on this. A man’s ability to protect his honour will, as Goddard (1989: 168) writes, ‘provide a guide to his reliability and effectiveness in the public spheres of economic and

Gender, Family and Social Welfare 71

political activity’. ‘This value system legitimises patriarchal control or codes of conduct that men try to reinforce over women’ (Lazaridis, 1995: 283). The control of women is supported by the church, be it Catholic or Orthodox, according to which women are associated with the morally weak, easily deceived and prone to sin Eve, whose sexual powers must be controlled.1 The majority of offspring live with their parents until they get married, with the exception of those who migrate for studies or for work. Therefore we have lengthier periods of cohabitation between generations than in other Central/Northern European countries. During this time, they are financially supported by the family irrespective of whether they have a separate income. Family obligations are of course defined and redefined during various stages of the life-cycle. Personal connections, kin, neighbours and the extended family are an indispensable resource. The family continues to be the primary system of social protection and care; when the children become adults and parents older, the caring roles change in that the younger generation is now responsible for the care of the elderly. At the same time, ‘for every young working woman there is at least one older woman (mother or mother-in-law) who may not live in the same household but who plays an active part in taking care of children’ (Ruspini, 2000: 108). So although the family often appears to be nuclear in reality its form is often extended. The traditional family arrangement based on the ‘male-breadwinnermarriage’ is still the norm, not so much in large cities like Athens, Barcelona, Lisbon, Madrid or Rome – although traces of it have not disappeared especially amongst middle-aged people – as in rural areas. Idealising this traditional family arrangement means reproducing personal relationships of power and dependence among family members; as Leitner (2001: 103) argues, in earnings-related benefit provision, ‘the husband is employed (full time) and acquires social security entitlements for himself and his dependants, whereas the wife is the family worker and receives social protection only indirectly through her husband’. What does this two-tier system mean for women? If we take retirement benefits as an example, the benefits granted to those elderly who do not have matured contributive entitlements, which is the case with women who may have had a history of discontinuous employment or have been in part-time employment due to the need to look after a dependant family member, is much lower than the benefits received at the age of retirement by someone who has had a full career in the formal economy (see Table 1 in Ferrera, 1996: 20). This disruption of career is often encouraged by limiting the supply of public social services to a minimum, an issue which will be discussed later in this chapter. A minimum duration of insurance coverage is required to acquire eligibility to earningsrelated pension; whereas in Italy this minimum qualifying period is as low as five years of contributions, Greece, Portugal and Spain require 15 years of coverage (Leitner, 2001: 103). Thus those working discontinuously, who


are most likely to be women, do not meet the qualifying conditions and are thus restricted from access to pension schemes. With regard to those women who decide to retire earlier in order to look after a grandchild, or an elderly infirm spouse, the final benefit received is affected as the calculation takes into account the period of insurance coverage – the maximum period of insurance coverage is 35 years in Greece and Spain and 40 years in Portugal, whereas in Italy there is no limit to it. However, women’s economic dependence on the family is not seen as a social problem (Saraceno, 1994). The family constitutes a safety net against social exclusion and the help provided by public or private services is less crucial; dependency on welfare provisions is regarded as ‘bad’, which is often used in political discourse to justify keeping the supply of social services to a minimum. Only in the last resort does the welfare state step in to substitute the family carer or the breadwinner. In Southern Europe, the notion of ‘subsidiarity’ means family first, state last resort. The state, in other words, intervenes when family resources are exhausted and does not have the ‘socialising’ approach one would find in, for example, Esping-Andersen’s (1990) social-democratic regime. It also requires a specific organisation of work within the household where one adult member functions as the family breadwinner while the other cares for the family. This is crucial in understanding gender relations in Greece, Italy, Portugal and Spain as when care is provided by the state institutions this is not without associated stigma. The role of the market as a provider of social services has expanded in recent years with the influx of undocumented migrant women who take up caring jobs. Thus the price of allowing women to enter the labour market is by and large falling either on to the family budget (for example, hiring informal paid work – see Chapter 6), or on to family and kinship support networks. Earnings-related social insurance schemes exclude non-working wives, thus treating them as their husbands’ dependants. The breadwinner is, of course, entitled to social protection on the basis of social rights earned by contribution payments, whereas the unpaid family carer derives entitlement only indirectly from her husband. Family benefits help maintain the traditional division of labour. Earnings-related schemes often grant additional credits for unpaid care work, such as care of children, thus partially compensating for time spent undertaking caring work. The length of periods credited varies from one country to another; for example, this is up to six months of coverage per child in Greece and Italy (in both cases available only to mothers), two years in Portugal, one year in Spain. Italy also has a subsidised pension scheme for housewives. In addition, there are old age benefits available for spouses and survivors of persons who are covered by an earnings-related scheme; in Greece for example, the spouse receives a flat-rate supplement for a dependent spouse, whereas a survivor receives 70 per cent of the deceased’s pension. In Italy and Portugal the survivor receives 60 per cent


of the deceased’s pension (in Italy this is income-tested), and 45 per cent in Spain. However, such benefits are low when compared to entitlements gained from employment. Hence gender discrimination is being maintained. Entitlement for family work ‘does not result from direct but indirect social rights’ (Leitner, 2001: 108). Furthermore, such benefits reflect the norm of heterosexuality combined with the institution of marriage. There is a discrimination against alternative forms of living together. The privileged treatment of traditional family arrangements based on the principle of subsidiarity on the one hand and entitlements for spouses alongside a limited supply of public social services, helps maintain the traditional division of labour where one person functions as the family breadwinner and the other as the family carer. During the last three decades, the number of women employed has increased. This has forced policy-makers in the respective member states to concern themselves with the issue of making care work public and thus helping couples (and especially women) to combine family life and employment. We will now turn our attention to the extent to which Southern European welfare states support parents in reconciling family and working life. As we shall show, although there are variations, all four countries rank low in terms of childcare provision (especially for children up to three years of age), levels of maternity benefits, and welfare support for families with children. This is in great contrast to other member states of the EU, such as Denmark, France, Belgium, which have extensive public provision of childcare for children under the age of three. Childcare provision All four Southern European countries have the sixth year as the age of compulsory schooling. In terms of childcare provision for children up to three years of age, as mentioned above, all four countries have minimum provision; only 3 per cent of children up to three years of age are covered in Greece, 2 per cent in Spain, 6 per cent in Italy, with only Portugal offering a slightly higher coverage (12 per cent). This is very low if compared with the 50 per cent in Denmark, 33 per cent in Sweden, 30 per cent in Belgium and 23 per cent in France. However, child provision for children between three and six years of age is better; at the low end of the provision continuum is Portugal (48 per cent) followed by Spain and Greece2 (at 64 per cent being close to the EU average) and Italy at the high end of the continuum (91 per cent) (Ruxton, 1996; Papadopoulos, 1998b). Underprovision of services implies that a large amount of the work to be done is carried out by women and assumes that there are women at home ready to do it, be they citizens (traditional full-time housewives) or strangers (hired help) (see Chapter 6). As Addis (2000: 129) writes, ‘some of the pathologies of the Italian welfare state are linked to the unrecognised need to provide care to families … caregivers are recognised as useless dependants; not as providers of domestic


goods, but as consumers lacking an adequate source of case’. This is true for all four countries. Hence early retirement, false invalidity pensions and misuse of hospitals to park frail elderly people, are ‘creative’ attempts to finance care (ibid.). Often the replacement costs for the services a woman no longer offers for her family are high. But the net gain for her is smaller than for a person who can rely on extended family to perform such care and domestic work. Maternity, paternity and parental leave The arrangements for paid maternity leave in the four countries differ. In Greece paid maternity leave is given for 16 weeks with 100 per cent income replacement; but it pays the lowest maternity benefits of the four. Similar to Greece, in Spain this is given for 16 weeks on 75 per cent income replacement, whereas this is more generous in Portugal (18 weeks on 100 per cent replacement rate) and in Italy (22 weeks on 80 per cent replacement rate). Spain and Portugal provide the right to paternity leave (two days and five days respectively with 100 per cent income replacement). Arrangements for parental leave vary: in Spain, Greece and Portugal there is no statutory entitlement to paid parental leave. People who interrupt their career to look after their children have to do so without pay. Italy offers six months, Spain 12–36 months, Portugal six to 24 months, while Greece offers the shortest period of parental leave in the EU, three and a half months (six months for lone parents), which is offered only to those employed by companies with more than 50 employees, thus excluding all those employed by small companies (Ruxton, 1996; Ditch et al., 1996; Papadopoulos, 1998b). The lack of adequate state provision of childcare, generous maternity, paternal and parental leaves, in combination with the fact that nowadays women either cannot afford or do not wish to leave the labour force to raise children, may be contributory factors to the reduction of the birth-rate. Changing family structures: demographic similarities and differences According to the European Observatory on National Family Policies, in order for a population to reproduce itself, each woman needs to have 2.1 children (European Commission, 1998a: 5). Every country in the EU has a fertility rate3 below replacement level. However, there are variations in the timing of the decline in fertility rates. For example, although in most Northern member states of the EU fertility rates began to fall in the midto late 1960s, it was not until the mid- to late 1970s that the Southern member states followed a similar path. Italy and Spain experienced a rapid decrease in fertility rates from the mid-1960s and early to mid-1970s respectively (see Table 3.1), in spite of legislation which until 1975 in Italy and 1978 in Spain prohibited abortion, dissemination and use of contraception, and the strong influence of the Catholic Church. They now have the lowest fertility rates in Europe

Gender, Family and Social Welfare 75 Table 3.1 Fertility rates in Southern European member states, 1965, 1990, 1995 Country

1965

1990

1995

Greece Italy Spain Portugal

2.30 2.66 2.94 3.14

1.41 1.27 1.33 1.43

1.32 1.17 1.18 1.40

Sources: Eurostat (1993a); European Commission (1998a: 6).

(in 1995 the respective numbers were 1.17 in Italy, 1.18 in Spain, 1.32 in Greece and 1.40 in Portugal (European Commission, 1998a: 6). However, both Italy and Spain have ‘heterogeneous fertility patterns between the regions’ (Delgado Perez and Livi-Bacci, 1992) indicating the existence of different family cultures within each country.4 Birth outside marriage is not common. Therefore there may be a correlation between declining fertility rates and delayed marriages. Another explanatory factor for the drop in fertility is the late entry of women into the labour force and the lack of a corresponding development of related social services, family allowances and child benefits etc. Some therefore have argued that instead of pro-natalist policies, improvements in policies designed to help women reconcile family demands and child-rearing and paid work may lead to higher fertility rates (Del Boca, 1996; Fagnani, 1996). Such policies may include increasing the availability of flexible working hours, part-time work and job-sharing and a more flexible childcare system provided by welfare authorities, etc. Moreover, women are having their first child at an older age than previously. The mean age of women at first birth has risen by around one to two years since 1970, which may mean an increase in lone motherhood, as cohabitation in these countries is rare. We also have an increase in births outside marriage; the largest increase was in Portugal (from 7.3 per cent in 1970 to 18.7 per cent in 1995) and Spain (from 1.4 per cent in 1970 to 10.8 per cent in 1995), while in Greece the respective numbers remain low (1.1 per cent in 1970 and 3.0 per cent in 1995). In Italy women have fewer babies outside marriage than in Spain and Portugal (2.2 per cent in 1970 and 8.1 per cent in 1995) (European Commission, 1998a: 15). Concerning teenage pregnancies, there are large differences between Southern European countries: the number of births per 1,000 women aged 15–19 was 25 in Portugal and 22 in Greece, while the fertility rates in Spain and Italy in this age bracket were lower (12 and nine respectively) for the 1990–95 period (UNICEF, 1996). The majority of teenage pregnancies end in abortion. Patterns of family formation and dissolution are changing throughout Southern Europe and point to a greater degree of instability and a gradual move towards a more complex and diverse set of behaviour in terms of family formation. The crude marriage rate in all four countries is lower in 1995


than in 1970. There is a variation between the four countries. In Italy the reduction in the number of marriages began in the 1970s. However, throughout the 1980s marriage remained the central choice of young adults; despite a moderate increase in family breakdown by the mid-1990s the crude marriage rate was only 4.9. This trend is evident especially for women younger than 25, in all regions, especially in the North and Centre. In spite of the fewer marriages, around 90 per cent of children under 24 live with their parents irrespective of whether they are financially independent. (European Commission, 1999c: 34). In Portugal during the 1990s, the crude marriage rate was 6.6. In Spain a similar reduction in number of marriages to that observed in Italy began in the early 1980s, especially among people marrying before the age of 25. The delay of marriage in both countries has been attributed to a number of factors, such as high unemployment rates (see Chapter 2) especially for young people, opting for higher education, cultural shifts concerning sexual relations before marriage (Jurado Guerrero and Naldini, 1996: 47). Regarding alternative living arrangements, according to Jurado Guerrero and Naldini (1996: 47–8), ‘in Italy and Spain, existing data point to the low degree of cohabitation … the percentage of unmarried couples in Italy is … very low …’. Cohabitating couples with children represent only 0.1 per cent of all households in Greece and Italy, 0.7 per cent in Portugal and 0.9 per cent in Spain (European Commission, 1998a: 16). In the mid-1990s, lone parent families with children under 16 as a proportion of all families with children under 16, ranged from 6.7 per cent in Greece to 7.1 in Spain, 7.3 in Italy and 8.4 in Portugal (European Commission, 1998a: 22). Nowadays in the EU an increasing number of children are living in a more diverse range of family types, such as with one of their parents as part of a lone parent family, or with their non-married parents in cohabitating couple families (heterosexual or same sex), or in reconstituted families involving only one of their natural parents. However, it is still very uncommon in Southern Europe to be living with non-married parents (0.4 per cent in Greece, 2.0 per cent in Spain, 0.1 per cent in Italy and 1.8 per cent in Portugal) (European Commission, 1998a: 26). In both Italy and Spain most unmarried couples live in urban areas. ‘Alternative living arrangements such as cohabitation and single-person living arrangements are not yet institutions, and are still viewed as acts of the individual will which break with routine, and may well not be positively sanctioned’ (ibid.: 50). Divorce laws were introduced in 1970 in Italy and 1981 in Spain. Divorce is not a substitute for separation but ‘added to separation as a legal step’; many couples go no further than the separation stage. Divorce rates are lower than in other European countries. In Greece, for example, the crude divorce rate was 0.7 per cent in 1980, amongst the lowest in the EU alongside those of Portugal (0.6 per cent) and Italy (0.2 per cent); the rate of divorce has increased since, the respective figures for 1995 being 1.1 per cent for Greece, 0.5 per cent for Italy and 1.2 per cent for Portugal (European


Commission, 1998a: 13). Nevertheless, marriage as an institution seems to still be very important and childbirth outside wedlock in Greece remains low (2 per cent in 1994) (Symeonidou, 1996: 80). The average age at which women marry for the first time has increased since 1970. The increase has been greatest in Italy (two and half years) and least in Portugal (six months). Remarrying is also in decline which means that fewer people are marrying overall (European Commission, 1998a: 9–10.) As already mentioned, cohabitation still remains a rare form of relationship formation in Southern Europe (Kiernan and Estaugh, 1993). So, it seems that ‘romantic love’ which Giddens (1992: 61) associates with the idealised notion of falling in love for ever, is gradually, but only gradually, giving way to confluent love, which incorporates an ‘active, contingent love’, without any expectation of permanency. Traditional expectations of older generations, that people will get married and have children, still hold, but as the process of detraditionalisation goes on, partners will have to reconcile decisions about living together (whether to institutionalise their relationship or not, whether to have children and if so when and how) with their labour market position. The changing family structures and behaviour, the decreasing fertility rates and emerging female employment patterns will affect the division of labour by sex. The crucial question which Southern European societies are likely to be faced with in the next decades is ‘who will take care of the elderly?’ The elderly In all countries of the EU the proportion of the population aged 65 years and over is increasing. Within Southern Europe, there are variations between the respective countries in relation to ageing. Indeed, one can identify three groups, each with a different balance between the proportion of the population aged up to 19 and the proportion aged 60 plus. First, we have Italy, where ageing is advanced; as Sgritta in the Family Observer (European Commission, 1999c: 34) says, ‘in 1996 Italy became the only country in the world in which the number of older people exceeded that of the young’. Pension payments in Italy make up more than 70 per cent of social expenditure (ibid.). Second Greece: while ageing is not so advanced as in Italy, it is becoming more so as the years go by; in 1996, half the social budget was spent on social insurance (mainly pensions) (European Commission, 1999c: 31). Third, we have Spain and Portugal where the proportions of young and older people are relatively balanced (European Commission, 1998a: 7). The largest increase in life expectancy at birth between 1970 and 1995 was observed in Portugal with an increase of 7.1 years for men and 7.8 years for women and the lowest in Greece with an increase of 4.9 years for men and 6.4 years for women. What is of interest to us here is that in all four countries life expectancy for women has increased by a greater degree than for men. In 1995 life expectancy for


men at birth ranged from 75 years in Greece to 71.3 years in Portugal, and for women, it was highest in Spain (81.5 years) and lowest in Portugal (78.6 years) (ibid.). The aged dependency ratio (balance between the proportion of the population aged 65 years and above to that aged 15–64) in the period 1970–96, increased from 17 to 25 in Italy, from 17 in Greece and 15 in Spain to 23, and from 16 to 22 in Portugal. The burden of ageing, in spite of cash benefits (see Chapter 4), falls on the shoulders of women. However, as mentioned earlier, this is reciprocal as one has to take into account the contributions older people make in terms of informal care of children and sick relatives, as well as volunteering work (formal and informal). These indirect contributions are central to the survival of the Southern European ‘nuclear’ family. The interdependencies between the population of working age and older people should not therefore be underestimated. The family has to provide care for its elderly as there are few social services available. For example, in Greece there are now around 233 Open Care centres (KAPI) run by local government providing facilities for those capable of looking after themselves and with no need of serious medical care. Men see it as a place for recreation, while women attend only occasionally for health check-ups as looking after their children’s house or children leaves little time for recreation. However, it is socially stigmatising for a family to place a parent in an old people’s home or nursing home even if the old person suffers from a chronic health problem. As Symeonidou (1996: 81) points out, ‘in Greece the overall population in old people’s homes and geriatric clinics is only 8 per cent of the total population aged 65 years and over as opposed to 8–11 per cent in western Europe’. As a result many women stop working in order to look after a dependent parent and hence become economically dependent on their husbands. Doing this is an important element of reciprocity in family care. In Greece the institution of ‘home help’ and ‘care at home’ was introduced in 1992; however, the implementation has been weak. A number of programmes for care of dependent old people are run by the Church of Greece and by the Red Cross. Some criticism could be levelled at the criteria on which those who receive help are selected (for example, frequent church-goers). In Italy, according to the Indicatore della Situazione Economica (ISE) scheme introduced in 1998, a family which requires some form of social service should answer a questionnaire and provide information on family composition and wealth. Depending on the number of people who live on a given income, whether the parent is single, whether there is a person with special needs in the family etc., one assumes an income. Income transfers to families Family allowances (income-related) and tax allowances5 Family benefit refers to any benefits granted to offset family maintenance costs (Council of Europe, 1972: 4). Family allowances refer to cash benefits


granted to families based on either family characteristics such as number of children, family income, family structure, or child characteristics, such as age of child, mental and physical ability of child (Dumon and Nuelant, 1994: 9). Income-related family benefits and tax allowances are available in all four countries. But unlike other EU member states, Greece, Italy and Spain do not have a system of universal child or family allowances paid regardless of incomes (European Commission, 1998a: 58). In Greece and Spain family benefits vary according to number of children6 and in Italy according to number of persons in the household. Tax allowances vary according to number of dependants in Greece and Portugal, and number of children in Italy. The value of child benefit packages varies between the four countries. Table 3.2 below shows how the child benefit package is constructed for a couple with two school-age children where both parents are earning one and a half average earnings (rich family), whereas Table 3.3 shows the same for a couple with three school-age children, with one earner on half the average earnings (poor family). As we can see, at low earnings only Italy delivers some of the child benefit package through child tax

Table 3.2 Structure of the child benefit package (i) (i) Couple with two children. Two earners, 1.5 ⫻ average male earnings and 1.5 ⫻ average female earnings. ECU purchasing power parity. Before housing costs. May 1996 Country


Child tax allowance/ credit 19.46 9.31 28.98 22.58

Non-meansMeanstested child tested child benefit benefit 15.31

40.74

Health costs ⫺37.61 ⫺11.05 ⫺15.82 ⫺18.73

School costs

Total

⫺152.22 ⫺155.06 ⫺66.32 ⫺68.06 13.16 ⫺8.54 36.05

Source: European Commission (1998a: 59).

Table 3.3 Structure of the child benefit package (ii) (ii) Couple with three children. One earner on 0.5 ⫻average male earnings. ECU purchasing power parity per month. Before housing costs. May 1996 Country


Child tax allowance/ credit

Non-meanstested child benefit

Meanstested child benefit

40.74

50.99 278.65 66.83 31.61

27.92


Health costs

School costs

Total

⫺56.41 ⫺332.63 ⫺338.05 ⫺16.87 ⫺79.12 210.59 ⫺23.73 43.09 ⫺28.65 ⫺11.64 32.06


allowances or credits. Moreover, in Greece and Italy families with higher earnings have negative child benefit packages as cash benefits do not compensate for the charges parents have to pay for health and educational costs for children (European Commission, 1998a: 50). Regarding unemployed lone parents, if one looks at the net disposable income of a lone parent as a proportion of the net disposable income of a couple with the same earnings and number of children, it becomes clear that Greece is the only Southern European country where lone parents are consistently worse off than couples and Spain is the only country in Southern Europe where lone parents are consistently better off than couples. In general, in Italy and Portugal, lone parent families are treated slightly more generously than couples by the tax/benefit system. The picture, of course, varies with number of children and earnings. For example, with one child on half average earnings a lone parent in Portugal is 5 per cent better off than a one-earner couple on half average earnings. However, if the lone parent were on one and a half average earnings they would have only 98 per cent of the net income of a couple. With two children on half average earnings a lone parent in Italy is 6 per cent better off than a oneearner couple on average earnings. If the lone parent were on average earnings they would have the same net income as a couple, and if the lone parent were on one and a half average earnings they would have only 96 per cent of the net income of a couple (see Table 3.4). A comparison of the benefit income packages to which unemployed lone parents are entitled shows that earnings-replacement rates increase progressively with each child. However, the rate of increase differs from one country to another; for example, in Greece, replacement rates of the benefit packages available to an unemployed lone parent with one child aged seven and an unemployed lone parent with four children is 20 percentage points; in other words, a form of income redistribution takes place towards

Table 3.4 Net disposable income of a lone parent As a proportion of the net disposable income of a couple with the same earnings and number of children. Before housing costs. May 1996 Country

Half average earnings 1 child


85 100 104 105

Half Average Average 1.5 ⫻ average 1.5 ⫻ average average earnings earnings earnings earnings earnings 1 child 2 children 1 child 2 children 2 children 68 106 107 107

92 97 101 103


82 100 102 105

94 98 101 98

88 96 101 100


lone parents with children. In Italy, Portugal and Spain, this difference is 6, 5 and 9 percentage points respectively, which is far below the European average (Papadopoulos, 1998a: 132–3). Moreover, in Italy there seem to be no significant differences between the treatment of lone parents and that of couples with children; the same is true for Spain, with the exception of lone parents with very young children (under a three years old), who are treated more favourably (ibid.: 13). In Italy these may be either contribution-based or tax-based and are paid to workers for their spouse and children. Each person who has a dependant has a right to a deduction of tax otherwise due. Moreover, there are family allowances (assegni familiari) given to workers; these are means-tested, based on the worker’s income bracket (there are 16 brackets) and number of dependants. An amount is given for the dependent spouse and an amount for each child. Since 1978 these are tax exempt. They were increased in the mid-1990s in order to deal with the fertility rates crisis. Entitlement to these is lost if the wife’s income takes the family income above a threshold and hence encourages women to stay at home. ‘Besides being job centred, the “assegni” are patriarchal in that they assume that whatever is given to the head of the family will be fairly redistributed to the wife and to the other members of the family’ (Addis, 2000: 135). There are no programmes to help the children of people who are divorced or enter single parenthood and have no job. The fact that the welfare state in all four countries is insurance-based implies that unless a woman is working, the main route of access for her to transfers from the welfare state is through marriage to a worker. The welfare state is therefore ‘not only familist, but also patriarchal, in that it assumes and reproduces women’s dependence on men’ (Addis, 2000: 127). The family allowance for dependent children was increased in 1997 in Spain in line with inflation forecasts. A small percentage of a family’s real expenses is deducted from its taxable income; this weakens the fiscal protection of the family (European Commission, 1999c: 38). As in Greece, there are special benefits for larger families. Family benefits (non-income-related) Non-income-related family benefits are not available in Italy and Spain whereas they are in Greece and Portugal where they depend on number and age of children. Portugal has the lowest age limit; benefits are paid for all children up to the age of 15 and can be extended for another ten years for those who continue in education. In Greece, Italy and Spain benefits are paid for children up to the age of 18, but whereas in Greece the limit can be extended up to the age of 22, Italy and Spain have no such provision (Hantrais, 1995: 90). Other cash benefits include a marriage benefit in the form of a lump sum paid at the wedding, which exists only in Greece and Portugal, and a marriage allowance which is paid monthly by the employer (this exists only in

82 Southern European Welfare States Table 3.5 Overview of family benefits in Southern Europe, 1993 Country

Child allowances

Birth allowances

Greece

Vary according to income

Benefits exist – but is not available to all

Italy

Means-tested

Benefit does not exist

Spain

Means-tested

Benefit does exist

Portugal

Universal

Benefits exist

Income-related family benefits

Non-income-related family benefits

Benefits exist – vary according to number of children and whether lone parent – tax allowances Benefits exist – vary according to number of persons in the household – special allowance for lone parents – tax deductions (esp. pre-school care costs) Benefits exist – vary according to number of children – tax deductions (esp. pre-school care costs) Benefits exist – various schemes – tax deductions

Benefits exist, some are taxable – vary according to number of children and age of child Does not exist

Does not exist

Benefits exist, are non-taxable – vary according to number of children and age of child

Sources: Compiled from Dumon and Nuelant (1994: 17); Papadopoulos (1998b: 52–3).

Greece). In addition, there are birth allowances (see Table 3.5); these are universally granted in Portugal (indexed). In Italy (with the exception of Trento-Alto-Adige) and Spain these do not exist, whereas in Greece they are indexed and restricted to those working in the public sector and to some persons covered by certain forms of insurance in the private sector (Dumon and Nuelant, 1994: 12). There are also non-financial benefits, such as exemption for military service for family reasons and preference in job allocation and location. Family policy and familism Although all four countries may be described as countries with a strong ideological commitment to the family, as shown above, family state support is minimal, with the possible exception, recently, of Portugal. This


rests in the ideological assumption that the family is the main provider of welfare for its members. The family unit is operating as ‘a social clearing house mediating the difficult relationships between a variegated labour market and equally variegated income maintenance systems’ (Ferrera, 1996: 21). This process is defined as ‘familism’. The family is also perceived by its members as the main vehicle for social mobility. In the Greek case: this belief is embodied in the social practices of almost all social classes though a system of attitudes, visions and expectations which produce a special kind of solidarity within the family collective … solidarity remains firmly within the private sphere, as an inter-generational responsibility towards the family unit … the development of notions of social responsibility or social solidarity, essential for the creation and functioning of a civil society, encounter enormous obstacles. (Papadopoulos, 1998b: 55) Therefore, reciprocal obligations associated with bonds of kinship and marriage are very important. A principle of mutual solidarity between family members is the norm. The importance of such linkages is attributed by some to the inadequacies in social welfare; the family is thus filling the gaps in the welfare state, which in Southern Europe is very inadequately developed (Martin, 1996: 34). They can be seen as substitutes of public intervention or as complementary to it (ibid.). The familistic nature of the Southern European welfare model explains the embryonic form of the regime as regards family policies. As mentioned above, it is primarily women who are contributing a lot of the non-market work that helps families survive. Despite the importance of the family in caring for children well into adulthood and in spite of the strong moral and ideological emphasis on the role of the family in holding society together, there is a lack of family policy (Gauthier, 1995). In the Italian case, the reasons for this are summarised by Bimbi (2000: 72) as being the following: first, a reaction to fascism which produced ‘explicit pronatalist family policies and categorical policies for lone mothers’; second, the model of welfare which stipulates residual state responsibility for family welfare and puts emphasis on family care for children and relatives supported by a law on relatives’ obligations; third, the importance of traditional forms of matrimonial and intergenerational ties despite changes in demographic trends – this points to the ‘hegemony of a shared cultural model, whose hallmark is the importance of the family group’. In terms of gender relations, a pattern of power relationships among members of the family and the residual family policy reinforce the role of women as the main carers of children and the elderly. It also reinforces the reproduction of private patriarchal relationships (Walby, 1990), whilst a shift towards public patriarchal relationships still remains in an embryonic


form. Women’s different experiences and structural position seem to militate against their full access to the rights of citizenship (Walby, 1997: 173). Social citizenship depends upon being a worker for full access to citizenship rights, as ‘significant aspects of income maintenance payments by the state, pensions, and related welfare provision are provided as a result of wage employment’ (ibid.). As shown earlier in this chapter, those women who are not employed fall back on meagre levels of support (such as pension benefits), often derived via their spouses, so long as they stay married. Women who work part-time or have interrupted their employment for a period of time, in order to be able to meet their commitments to the care of children and/or elderly relatives, are often not able to get access to a decent pension, as this is incompatible with the role of carer. Walby (1997: 173) rightly poses the questions: ‘should women only be entitled to citizenship if they behave like men and have lifetime commitment to paid employment’? ‘And if so, what are the implications for those who need care’? These are important questions as under the rules of the Southern European welfare systems paid employment is the main route of access to decent support in old age. One solution would be for women to stop being exploited at home and enter the labour market and at the same time demand that their position as carers is supported by coherent childcare policies which would reflect the value of caring work to society ‘whether it be done in private or in public’ (Lister, 1990: 464). She also states that the entry of women into the public sphere in order to obtain economic and social rights should be actively encouraged. As we show in the following section, during the last couple of decades, the younger generation of women in Southern Europe has entered the public sphere. This has rendered them a double-shift worker, juggling the responsibilities of paid employment and caring work. To quote Lister (ibid.), ‘if women are to be fully integrated into full democratic citizenship, radical changes in personal and domestic life are required’. In Southern Europe, such changes are yet to take place. At the same time, one could argue that such changes must be made in order for women to gain full-citizenship. As Walby (1997: 178) argues, ‘the male-dominated family-household is incompatible with full citizenship. Social citizenship for women is incompatible with, and unobtainable under, women’s confinement to the family and the vagaries of a dependency relationship upon a private patriarch’. Having discussed the limitations of the welfare state in Greece, Italy, Portugal and Spain to socialise some form of privatised domestic labour through more nurseries, publicly provided care for the elderly and other dependants at levels which would satisfy women’s needs, and having looked at tensions between social citizenship for Southern European women and their location as carers in the family, we will turn our attention to these women’s economic citizenship and the extent to which they have been included in or excluded from effective participation in paid work.


Gender inequalities in the labour market Different welfare regimes have a different impact on women’s labour market participation. Here we will try to explain how the labour market in the four countries under study is gendered and look at factors which determine women’s employment. As Langan and Ostner (1991: 130) argue: different gender categories have different relationships with the process of commodification and decommodification. Men are commodified, made ready to sell their labour power on the market, by the work done by women in the family. Thus men and women are ‘gendered commodities’ with different experiences of the labour market resulting from their different relationship to family life. Such social rights as these are deeply embedded in local traditions and differ according to gender. Men’s position in the labour market is protected; in contrast, women are often disadvantaged by restricting their access to employment and emphasising their role as carers. However, as Langan and Ostner (ibid.: 131) argue, ‘women might be commodified and decommodified by welfare regimes depending on their relationship to the family’. In other words, the family plays an important role in the welfare state of Southern European societies by providing services but also ‘a sense of continuity, stability, belonging, and of mutual obligation’ (ibid.). Therefore ‘an appreciation of the domestic division of labour and women’s pivotal role in the processes of reproduction of modern societies is crucial in understanding the gendered nature of the welfare state and its associated social stratification’ (ibid.). As shown in the previous section, the role of women as carers places them at a disadvantage in access to income (Glendinning, 1990). Women’s private dependency in the family is an obstacle to women’s citizenship. Women are not treated as individual wage earners although changes in the labour market and in living standards have called for double-earner families. Also reforms in law and ‘woman-friendly policies’ have encouraged women’s entry into the labour market. To sustain employment levels the civil service in the Southern European member states has become a major employer, thus shifting women’s partiarchal dependence from the husband to the state. Working women often rely on other women (migrant women) to provide childcare so that they remain in full or part-time employment. It is thus women who enable other women to go out to work. Comparable data reveals trends in women’s employment patterns which are common in all four countries. During the 1950s and until the mid1960s the participation of women in the Spanish labour market increased, while in Italy it decreased. Since the early 1970s the proportion of women working kept increasing in both countries (from around 20 per cent in the


1970s to around 35 per cent in the 1990s). Nevertheless, in 1996 the female participation rate for Italy was 43.7 per cent of the working population, whereas for the EU15 it was 57.4 per cent (Bettio and Villa, 2000: 158). Women were incorporated into paid work at a time when the tertiary sector was expanding. In the early 1990s, Spain had the highest proportion of non-employed women in OECD countries with 72.6 per cent of workingage women being either unemployed or non-working (Cousins, 1999: 78). In the case of Italy, the low participation of women in the labour market is because of the lack (or scarcity) and low quality of services substituting for women’s traditional care-giving work, which makes the participation cost high. In addition, as Addis put it (2000: 123), ‘some of the direct transfers are regulated so as to give incentives for non-participation’. There are also labour market policies which prevent hiring and promoting women in the private sector. These policies, which Addis (ibid.: 124) calls ‘handicap-privileges’, range from long maternity leave which prevents the hiring of marriageable women (in the case of Italy, five months mandatory at 80 per cent pay at birth, plus six months elective at 20 per cent of the wage within the first two years), to mandatory retirement age at 55 for women in the private sector preventing women from re-entering the labour market at an older age (now abolished by the Dini reforms; see Chapter 2); long weekly hours curtailing the time available for childcare for a couple who are both working full time. As a result, women enter the labour market relatively late, but continue to work full-time after the birth of the first child ( Jurado Guerrero and Naldini, 1996: 56). In Italy, a North–South economic dualism exists which is mirrored in the welfare services. Among southern families, the male-breadwinner regime prevails, marked by little presence of women in the labour market and high male unemployment (Ruspini, 2000: 89). This interacts with the peculiarities of the Italian welfare state model, which is characterised by a strong heterogeneity of social policies due to decentralisation (even provincial and local authorities have developed different criteria and means tests for the allocation of benefits and services). In Portugal, during the colonial wars and emigration which took place in the 1960s, there was a demand for female labour. ‘By the beginning of the 1970s, female participation in the labour market was superior to that of other more developed European countries’ (Andre and Feio, 2000: 55). The economic modernisation which took place in the 1970s contributed to the greater equality of opportunities between men and women in finding jobs in the professional sectors, characterised by instability. In the mid-1980s growth of the economy was accompanied by increase in the employment of women, especially in commercial areas and tourism, personal and domestic services, catering, health and social services. The highest increase in the rate of female activity was observed in the Azores and Alentejo. Nevertheless, weak development of social structures and services, especially


regarding childcare and care for the elderly, hinder the promotion of female labour activity in spite of the fact that the idea of the ‘woman at home’ is fading away as an outdated stereotype as the contribution made by women’s earnings is an indispensable addition to the family income. Men have been particularly hit by unemployment in areas where cost reduction strategies are in operation in sectors of traditionally intensive industrial labour (mainly in the North and Centre of the country). Nevertheless, increasing flexibility has hit both men and women. However, the vulnerability of female employment is experienced in different ways in different parts of the country; for example in Lisbon and the South, we have unemployment and growth of temporary contracts whereas in the North and Centre, an externalisation of professional work. Finally in the 1960s, Greek women represented less than 30 per cent of the total working population in the country, whereas in the 1990s this figure has risen to around 35 per cent (Lazaridis and Syngellakis, 1995; Vaiou, 1996). Regarding sectoral distribution of women’s employment, most are concentrated in the service sector (47.5 per cent), followed by agriculture (35.4 per cent) and industry (17.1 per cent). The relatively high activity rates in the primary sector are not shared by Spain and Portugal, the respective numbers being 13.7 per cent and 22.6 per cent. We can observe occupational segregation in agricultural activities and service-type jobs (health and social services in particular) for women and in civil construction for men. Family responsibilities weigh unevenly with highly educated professional women on the one end, able to externalise a significant part of the domestic shores by hiring migrant labour and less favoured groups of women who need to work in order to supplement the family income, on the other (see Table 3.9). Social policy offers little to support working mothers and by and large counts on strong female solidarity and the notion of mutual obligation in families. Clientelism plays a crucial role. In all four countries, the way in which women allocate their time has changed. They are spending less time child-bearing (as mentioned earlier on, fertility rates have fallen), but the time they spend in caring for the increasingly frail elderly makes the likelihood of them spending less time in caring doubtful (Lewis, 1993: 6). At the same time, there is little evidence to suggest a change in Southern European men’s behaviour. There are of course significant differences in terms of the attitudes on the part of men in different regions and amongst different age cohorts within the different Southern European countries; however it is difficult to give an accurate picture without detailed attitude surveys and an elucidation of region-specific social, economic, cultural and political conjunctures; but such data is hard to subject to comparative analysis. During the 1990s, in Greece and Spain, women’s employment rates have remained lower than the EU average (43.4 per cent). It seems that despite legislation at EU and at national levels aiming at improving women’s


opportunities at gaining access to jobs and increasing women’s participation in the labour market, women find it more difficult than men to pursue economic activity. Women’s increasing participation rates are connected with the growth of self-employment and expansion of the public services. Changes in the occupational structure of all four countries, which resulted in a sharp decline in the percentage of workers in agriculture (see Tables 3.6, 3.7 and 3.8) result in many women nowadays working either in lower-skilled service jobs in the public sector, or in the informal economy. Hence women’s employment is polarised to a large extent between work in the public sector and work in the informal economy. The growth of flexibility in Southern Europe has by and large depended on the availability of women as part-time workers in the informal sector, which provides employment opportunities for women albeit under worse conditions of service. According to official statistics, part-time work is rare (see Figure 3.1) but data may underestimate the amount since many women work in the informal economy and their activities go unrecorded in the official employment statistics. Unrecorded also is home-working, a widespread form of employment in Southern Europe as Table 3.6 Employment by economic sector and gender in Southern European countries as percentage in 1999 Agriculture

Greece Spain Italy Portugal EU

Total

Male

17 7.4 5.4 12.6 4.4

15.6 8.6 5.9 11.2 5.1

Industry

Female Total 19.3 5.3 4.5 14.4 3.5

22.9 30.6 32.4 35.3 29.3

Services

Male

Female

Total

29 40.3 38.8 44.4 39.3

12.7 13.6 21.1 24.1 15.6

60.1 62 62.2 52.1 66.3

Male Female 55.4 51.1 55.2 44.4 55.6

68 81.1 74.4 61.5 80.9

Source: European Commission (2000: 85, 89, 90, 93, 97).

Table 3.7 Employment by economic sector in Southern European countries as percentage, 1975, 1985, 1996, 1999 1975*

Greece Spain Italy Portugal EU

1985

Agr

Ind

Ser

Agr

Ind

33.2 22.1 15.8 33.9 11.1

29.2 38.3 38.5 33.8 39.5

37.5 39.7 45.7 32.3 49.4

58.9 16.2 11 22.2 8.3

25.7 31.9 33.5 39 34.4

1996 Ser

Agr

Ind

45.4 20.3 22.9 52 8.6 29.4 55.5 6.7 32.2 38.8 12.6 36.1 57.3 5.1 29.9

Note * data for Greece 1977. Source: European Commission (2000: 85, 89, 90, 93, 97).

1999 Ser

Agr

Ind

Ser

56.9 17 62 7.4 61.1 5.4 51.3 12.6 65 4.4

22.9 30.6 32.4 35.3 29.3

60.1 62 62.2 52.1 66.3

89 Table 3.8 Male and female employment by economic sector in Greece, Spain, Italy and Portugal, 1977, 1985, 1996, 1999 Agriculture

Industry

Services

Male

Female

Male

Female

Male

Female

Greece 1975 1985 1996 1999

26.8 24.3 18.2 15.6

48.1 37.9 23.9 19.3

33.9 30.4 28.1 29

18.4 16.5 13.7 12.7

39.3 45.3 53.7 55.4

33.5 45.6 52.4 55.8

Spain 1975 1985 1996 1999

22.7 17.2 9.8 8.6

20.5 13.9 6.4 5.3

42.6 38.1 37.9 40.3

26.8 16.8 13.6 13.6

34.7 44.7 52.3 51.1

52.7 69.3 79.9 81.1

Italy 1975 1985 1996 1999

14.4 10.7 6.8 5.9

18.1 11.5 6.4 4.5

42.8 37.8 38.1 38.8

28.5 24.5 21.7 21.1

42.8 51.5 55.1 55.2

53.3 64 72 74.4

Portugal 1975 1985 1996 1999

– 19.6 43.4 44.4

– 26.2 13.6 14.4

– 45 43.4 44.4

– 29.9 26.9 24.1

– 35.4 44.8 44.4

– 43.9 59.5 61.5

Rate (%)

Source: European Commission (2000: 89–90, 93, 97).

60 50 40 30 20 10 0 Greece

Spain

Italy

Portugal

Southern Europe Women’s labour market participation rate Women working part-time as percentage of all working women Figure 3.1 Women’s labour market participation rate, 1998 Source: European Commission (1999c: 31).

90 Southern European Welfare States Table 3.9 Employment rates by educational achievement for the 25–9 age group, 1994 Country

Low women

Low men

Medium women

Medium men

High women

High men


42.1 36.7 31.7 64.9

91.1 84.3 75.1 89.7

48.7 62.4 49.6 74.7

90.4 85.9 79.7 88.7

78.4 78.4 66.0 93.9

91.2 90.5 83.8 94.9

Source: Eurostat (1996).

well as other forms of atypical work, such as agricultural work on family farms, family helpers in small businesses, informal seasonal work in the tourist industry and personal services. The most prevalent flexible work in Southern Europe is overtime. It is often preferred by firms over part-time work. In Greece, for example, changes in the legislative framework in 1990 enabled firms to remain open for longer hours and to integrate greater flexibility in working time. Men (48 per cent of the labour force) are more likely than women (34 per cent of the labour force) to work extra hours (Karantinos et al., 1997). However flexible work, including piecework and fixed-term contracts, is more widespread than official data suggests; as Stratigaki and Vaiou (1994) put it, ‘atypical’ work is so typical that that word is a misnomer. Advocates of flexibility stress that it may provide solutions to a range of issues, including problems related to equal opportunities. By enabling women to work at varying times of day and for varying lengths of time, it may lead to a fair division of labour by sex. This can be achieved by helping women to reconcile family and working life and by contributing to a restructuring of family roles. On the other hand, part-time workers’ opportunities for training and advancement are meagre (see Chapter 2). The paradox here is that on the one hand, atypical work opens up opportunities for women in that it facilitates entry into the labour market, but on the other hand, the short duration contracts where applicable and the low opportunities for advancement inevitably mean that women often are likely to remain economically dependent on their spouses. Hence, although flexibility provides a much needed supplement to the family income, women’s role in the family largely remains unaltered. Moreover, women who work part-time are heavily penalised under social security arrangements which provide for earnings-related benefits; they therefore continue to rely on the male spouse to ensure welfare entitlements. Women’s concentration in these types of jobs is due to a lack of alternatives and of accessible and affordable social infrastructure that would enable women to look for such alternatives (Vaiou, 1996: 67). ‘Restrictions


are stronger among low-income women who do not have access to private caring services and usually live in areas where public social infrastructure is inadequate and/or deteriorating (ibid.).

Conclusion In this chapter we have analysed the interaction between the welfare state, the family system and the labour market in Italy, Greece, Spain and Portugal. Southern European families present indicators of deep change and continuity. The most important changes include increase in female employment, a drop in the number of marriages, the appearance of free unions, the sharp decline in numbers of extended family households, conjugal instability and a decline in fertility rates. However marriage as an institution is still important and hence cohabitation and birth outside marriage are rare. Despite the secularisation process, the influence of the church and traditional values still remain and can be associated with a high intensity of family ties and the way in which obligations are perceived between generations. This makes individualisation of living arrangements difficult. We discussed gender inequalities in the welfare state of the aforementioned countries and the way in which certain policies (or lack of policies) reinforce the male-breadwinner, female-carer model; of course there are important signs of change as regards women’s position; for instance, the growing participation and higher performance of women in education increases their employment chances. The difficulties of combining family and employment for women have been outlined; we have shown how flexibility in employment facilitates women’s entry into paid employment (albeit more often than not in the informal sector), but at the same time strengthens or encourages the persistence of traditional gender relations within the family. We have also looked at the extent to which the absence of family policies and the meagre development of services in these countries have contributed to the persistence of the ‘family paradigm’ where care is the responsibility of women. The massive entry of women into the labour market from the 1970s onwards, which was motivated either by particular political contexts or by the pattern of specific economic development, has led to a slow but progressive mutation of gender roles within families and society. The cultural valorisation of the professional work of women prevents family life and duties from keeping young educated women away from the labour market even when a dual wage is not necessary. On an optimistic note, a great deal has been achieved for Southern European women since the 1970s. As Cousins (1999: 131) claims, in terms of women’s rights and opportunities, labour market participation, decline in fertility rates and the like, it is possible to distinguish a break in the experiences of different generations of women, ‘two biographies’ (Garrido, 1992), in that the life experiences of


the younger and older women have progressively diverged. However, two forms of discrimination remain; first, women’s participation in public life, employment, politics, etc. is lower than in other countries of the EU. Second, work is still very unequally divided in the home, in that many women still spend a lot of time on activities traditionally considered women’s work (housework and caring). A lot of progress needs to be made towards a more equal sharing of domestic chores. To quote Andre and Feio (2000: 70), ‘while the dynamics of wider social change induced by changes in the labour market are extensive, there remains a significant degree of inertia in the sphere of family organisation’. Informal care is becoming an increasingly important issue in Southern Europe where the family is regarded as a welfare state substitute. The absence of family substitution services in an era where the rest of Europe is looking for ways to reactivate the family in its role of carer, makes life difficult for women as ‘compulsory altruists’ (Land and Rose, 1985). Many would argue that solidarity between family members must be safeguarded. How could this be achieved first, without overburdening women, second, in an era of great geographical mobility, third, with the proliferation of new family forms and lifestyles, and fourth, in an era where informal networks which have traditionally sustained the family are breaking down? Organised voluntarism could play a crucial role alongside new forms of interactions between the ‘public’ and the ‘private’. Will this Southern family model persist in the future or change? The current crisis of the welfare state will make it difficult to develop more generous family benefits. The importance of family and kinship networks is likely to inhibit change because of the greater probability of social control within the networks. The negotiation of relations between genders has started and will continue in favour of a more symmetrical relationship. The decline in fertility and increase in longevity will have an impact on the ability of women to care for the elderly. This may lead to the deinstitutionalisation of family solidarity and marriage as the dominant family institution. Existing structures may collapse as we move towards a united Europe with new opportunities for a new division of labour and the care of children and the recognition and acceptance of new family forms and the individual’s freedom of choice in the field of sexuality and reproduction.

4 Social Security: Pensions and Social Minima

Introduction In Southern Europe, old age pensions are by far the largest single social security benefit. Throughout the 1970s and the early 1980s, a rapid increase in pension spending took place in all four countries. The driving forces for this change were the lack of proportionality between pensions and contributions, as well as the deteriorating ratio between pensioners and the active working population. We will deal elsewhere in this book with the basic challenges faced by social security systems today, such as demographic pressure and the ageing of the population (Gronchi, 1996; Chand and Jaeger, 1996), changes in the labour market and family patterns. (see Chapters 2 and 3). As a result of factors such as demographics, changes in family patterns and lifestyles, social security systems have been under mounting pressure as pension expenditures systematically exceed contribution receipts. Pension fund deficits and debt accumulation of public pension schemes inevitably increase the burden on the government budget in periods of retrenchment. For these reasons, the future of the public pension system has been a critical issue on the political agenda in all the recent general elections in Spain, Italy, Greece and, to a lesser degree, in Portugal. This is due both to the critical financial situation of the social security accounts and the political necessity to reduce the public deficit in order to meet the Maastricht fiscal criteria. Due to the commonality of problems, all Southern European countries have been pursuing pension reforms in the two last decades, introducing major changes in the structural characteristics of the pension system, preventing early retirement, reducing benefit revaluation, modifying the calculation formula by increasing the level of contributions and raising the retirement age. Emphasis is being placed on reductions in pension generosity, the homogenisation of pension arrangements and the abolition of the privileges of special categories (Kalisch and Aman, 1999). In addition, the presence of complementary funded schemes, which should provide additional coverage to the compulsory schemes, has been rapidly growing. 93


Private pension arrangements are also being promoted. They are not yet, however, of significant importance. Following the general structure of this book, the pensions systems will be examined from a ‘bird’s eye view’ in part one of this chapter, with the scope of the analysis focusing on their structural characteristics and their relative position in the European context. The findings of this analysis confirm the initial working hypothesis of this book that the Southern European social protection systems generally fit into the Central European ‘state-corporatist’ welfare model. Their internal differentiation into two clusters, with one comprising Italy and Greece and the other the Iberian countries, also seems justified. Special attention is paid to the alleged ‘generosity’ of the systems and the recent implementation of minimum income schemes. This is done because the presence of the first and the absence of the second are supposed to be two of the basic attributes of the ‘Southern Welfare Model’. In the second part we examine facets of the social security systems of the four countries. It is not, of course, possible to describe the social security systems and their related provisions in depth or in detail. This is not only because of the limitations of space, but also because of the continuously changing landscape of the related legislation. Therefore we try to present a comparative view of the services provided, in order to show the general status and the ‘ethos’ of the systems and to highlight the most important organisational features, as shaped by the reforms of the last decade.

General overview Constitutional and legal aspects The constitutions of all four countries provide for the right to social security for their citizens.1 The case law of the courts generally accepts the binding character of these provisions and their character as a fundamental right (Katrougalos, 1998; Kontiades, 1997; Kremalis, 1991; de Vergottini, 1991; Vida Soria, 1991; Alarcon Caracuel, 1993; Hoffmann, 1983). However, it usually conditions their fulfilment on the availability of public resources (see, for instance, the judgements of the constitutional courts of Italy, Cor.Cost. 160/1974, 64/1975, and of Spain 146/78). Although in principle constitutional protection covers only citizens, legal immigrants generally enjoy similar rights, due to a number of international conventions (Katrougalos, 1995). The International Convention on the Protection of the Rights of all Migrant Workers and Members of their Families (18 December 1990), guarantees the equal protection of rights for all immigrants. In article 7 it stipulates that the member states ‘undertake, in accordance with the international instruments concerning human rights, to respect and to ensure to all migrant workers and members of their families within their territory or subject to their jurisdiction the rights provided for in the present Convention without distinction of any kind’.

Social Security 95

Among other related treaties is the ILO Convention on Equality of Treatment (1962, ILO No. 11), which provides that each member state shall grant within its territory to the nationals of any other state member equality of treatment regarding the benefits of social security. Two conventions of the Council of Europe are of special importance: the European Convention on the Juridical Status of Immigrant Work (1977); and the European Convention on Social Security (1972). The latter (see also article 77 of the European Code of Social Security 1964) ensures equality of treatment for the nationals of all contracting parties, for refugees and for stateless persons with regard to the benefits of social security. The structure of the pensions system The proponents of the existence of the Southern European welfare model emphasise, not unreasonably, the highly fragmented character of the income maintenance system. In particular in Italy and Greece the public pension system is highly segmented and complex, with over 200 funds in Italy and over 300 in Greece, with many different regulations for pension rights. Moreover, there is sometimes segmentation within some funds, with distinct rules for various occupations covered by them. However, the situation is not exactly the same in the Iberian countries, where the social protection system is less fragmented, not only in comparison to Italy and Greece but also to other, more typical countries of the state-corporatist model, such as France. The reason for this difference is the absence of the pressure of clientelistic policies, which impose the introduction of ad hoc and incrementalist social legislation. In Spain and Portugal the long dictatorial rule of Franco and Salazar has shaped a state-dominated system, characterised by the exclusion of organised interests and a more uniform ‘state-charity’ pattern of welfare (Santos and de Sousa, 1994; Guibentif, 1997; Rhodes, 1997b: 9). Actually, in contrast to Italy and Greece, in both Iberian countries, despite the existence of specific schemes, there is a General Scheme (Regime Geral) of social security. In Portugal, for instance, it had already been implemented in the 1960s, by Law 2115/1962. The General Scheme, introduced by this legislation, has differentiated the district funds which are responsible for short-term benefits (sickness, maternity and family benefits) from the new National Pensions Fund (established in 1965) which was responsible for long-term benefits (old age, and invalid and survivors’ pensions). The funding of the new system has changed from a pure capitalisation system to a mixture of a capitalisation and a pay-as-you-go system (Guibentif, 1997: 227). Financing Pension expenditure, as a percentage of total social expenditure, is rather high, peaking at more than 15 per cent of GDP, but not higher than in


most countries of the state-corporatist model, including Germany, Austria, Belgium, and France. The small deviations that do exist reflect differences in the relative generosity of pensions and in elderly dependency ratios. Still, due to the politics of cost containment those differences tend to become minimal. With regard to the structure of expenditure, the system is biased towards old age protection. As already discussed in earlier chapters, this is one of the most salient common features of the state-corporatist model as a whole. For example, in Italy, and to a lesser degree in Greece, the percentages of social expenditure on old age and survivors’ pensions are even more disproportionate (see Figure 4.1). On the other hand, the respective figures for the Iberian countries do not depart from the European state-corporatist average (approximately 45 per cent of total receipts) (Eurostat, 2000b). This relatively more balanced equilibrium of the social protection system in the Iberian countries, and particularly in Spain, is mostly due to the introduction and expansion of programmes of employment and minimum income support. As shown in Table 4.1, for instance, whereas from 1975–95 the expenditure on pensions doubled, almost, that is, at the same rate as the total social expenditure, expenditure on unemployment increased five times. Another common feature of Italy and Greece, not shared by the Iberian countries, is the disproportionate number of pensions for invalids. These, due to the laxity of regulation and related controls, are given even to

70 60 50 40 30 20 10 0 1990

1991

1992 Greece

1993 Italy

1994

Portugal

1995

1996

1997

Spain

Figure 4.1 Old age and survivors’ pensions expenditure, 1990–97 Source: Eurostat, 1999b.

Table 4.1 Evolution of social expenditure in Spain, 1975–95 (percentage of GDP)

Total social expenditures Pensions Health Unemployment

1975

1980

1985

1990

1995

16.2 5.6 3.8 0.5

21.7 8.6 4.5 2.2

24.8 10.2 4.7 2.8

25.0 9.9 4.9 2.8

27.8 11.6 5.9 2.6

Sources: European Economy, no. 3 (1996); table adapted from González-Páramo (1998).

Social Security 97

healthy persons as a mechanism of income redistribution closely interrelated to clientelistic policies. In the early 1990s, about 50 per cent of the pensions of IKA, the largest Greek insurance fund, were pensions for invalids, whereas in southern Italy there were twice as many pensions for people with special needs as old age pensions (Ferrera, 1996: 27). According to the chairman of the Greek National Confederation of Invalids, J. Vardakastanis, 45 per cent of the recipients have used phony certificates in order to qualify for the pensions (Georgakis, 1999). A peculiarity of the Greek social security system is the pressure exerted upon social expenditure by gigantic defence expenditures, resulting from the continuous political conflict with Turkey. Defence expenditures are not only higher than in any other European country, but, till the 1980s, they continued to rise even in years when GDP was stagnating (Table 4.2). The relation between social and defence expenditures can be used as a very practical and instrumental barometer of the change in Greek state policies towards more social options (see Chapter 1). It was after the ascent of the socialists to political power in the 1980s that the increase of social expenditure surpassed that of expenditures on defence (see Figure 4.2) (Katrougalos, 1996). Despite that, defence expenditure as a percentage of GDP remains today more than double than that of the other Southern European member states (Tables 4.2 and 4.3). Table 4.2 Gross domestic product and defence expenditure: annual variation as percentage 1970–74


5.3 6.5 6.2 3.4 5.4 7.4 6.4 6.3

1975–79 0.5 5.3 4.6 5.0 ⫺0.2 5.5 ⫺9.5 2.5

1980–84

1985–89

1989

1990

1991

1.2 0.5 8.0 0.7 2.4 1.1 0.1 0.8

⫺0.5 1.6 ⫺3.7 3.2 3.1 4.5 4.7 4.5

⫺0.1 3.5 ⫺5.4 2.9 ⫺0.9 5.2 4.6 4.8

4.6 ⫺0.1 1.0 2.2 ⫺5.3 4.4 2.0 3.6

⫺7.7 1.8 ⫺5.2 1.4 ⫺1.9 2.1 0.2 2.4

1992

1993

5.1 0.5 0.4 0.7 0.3 0.4 0.7 0.8

⫺6.5 2.0 0.1 1.5 0.1 0.6 ⫺2.0 ⫺0.8

Note: The first row for each country represents the annual variation of GDP and the second the variation of defence expenditure. Based on constant prices. Source: NATO Statistical Data (1993: Tables 2[a], [b]).

Table 4.3 Defence expenditure as a percentage of GDP, 1995 Greece Italy Portugal Spain

4.9 1.7 2.0 1.5

Source: Kalisch and Aman (1999).


In all four countries, the financing pattern of the pension systems is generally the same as in the other countries of the state-corporatist model, that is, based on the insurance principle and the contributions of employers and employees. Still, contributions alone do not cover the full cost of current public pension payments, the remainder being covered by the general state budget. Portugal differentiates itself slightly from the average EU pattern showing a more important participation of the general government in overall expenditure, especially after the reforms of the 1990s (see Figure 4.3).

8

Social Defence GDP

6 4 %

2

91 19

90 19

89 19

–9

4

85

–8

19

19

80

75 19

19

–2

70

–7

–9

4

0

–4

Figure 4.2 Annual evolution of social and defence expenditure, in relation to the GDP variation as a percentage, 1970–91 Sources: NATO (1993); OECD (1994). See also Table 4.2.

Spain 1997 Spain 1990 Portugal 1997 Portugal 1990 Italy 1997 Italy 1990 Greece 1997 Greece 1990 0%

10%

Employers

20%

30%

40%

Figure 4.3 Financing of pension systems Source: Eurostat (1999b).

50%

Employees and other protected

60%

70%

80%

90% 100%

General government

Social Security 99

Still, the economic balance of the social security system in all four countries is at stake. In Spain for instance, the system’s superavit of 0.5 per cent of GDP in 1987 changed to a deficit of 0.5 per cent in 1996. Further, the financial liabilities of the social security system increased from 0.6 billion pesetas in 1987 (1.6 per cent of GDP) to 3.3 billion pesetas in 1996 (4.5 per cent of GDP) (González-Páramo, 1998). In 1995, the social security deficit, that is, the future pension liabilities, was estimated to be approximately 238 per cent of GDP. However, the situation is even worse in Italy and much more serious in Greece. In Italy for the same period, the deficit was estimated to rise to 400 per cent of GDP. This was lowered to 290 per cent after the Dini reform (see Pizzuti, 1998). In Greece, public spending rose considerably during the first term of the socialist government (1981–5), reaching 10.8 per cent of GDP in 1985, as compared to 6.4 per cent in 1980, increasing in real terms by 11.3 per cent per year, compared with the EU average of 1.6 per cent (Leandros and Loufir, 1999). During this period the deficit in social insurance funds reached 16.7 per cent of their total revenue and 3 per cent of GDP. The alleged generosity of the social protection system A number of international organisations, with the most prominent example the OECD (Mylonas and de la Maisonneuve, 1999), consider ‘generosity’ as one of the basic features of the Southern European social protection system. This iper garantismo, at least in favour of the insiders in the labour market, is one of Ferrera’s central points in support of the argument for the distinct character of the Southern European model. The evidence, however, does not confirm this. According to OECD figures (Kalisch and Aman, 1999; Table 4.2), the replacement rate of income for Greece is estimated at 60 per cent for the basic pension and 20 per cent for the auxiliary pension of pensionable earnings, after 35 years of insurance. Currently, in total, 79.57 per cent of income is ensured, when calculated according to article 66 of the European Code of Social Security. In Italy, prior to the 1995 reform, the maximum replacement rate could be 80 per cent, with full benefits for a 40-year contribution. However, after the reform, the replacement rate is expected to be between 47 per cent and 60 per cent (Pizzuti, 1998: 46). Eurostat estimates indicate that the pension for a new Italian retiree with 20 years of contributions will be equal to 45 per cent of the average gross wage. According to other estimates, because of the elimination of the indexation of pensions, the ratio between pension and current earnings would decline from 47 per cent to about 30 per cent and be further reduced for every additional year after that (ibid.). In Portugal, the retirement pension ranges from 30 per cent (minimum) to 80 per cent (maximum) of average earnings. A non-contributory supplement is added when the calculated benefit is less than the minimum rate set by law. According to OECD data, on average, newly retired workers in


1994 received benefits equal to 50.8 per cent of median wages (Roseveare et al., 1996: 61). In Spain, as a result of the reforms of the last decade, the ratio of the initial pension in the General Regime and the average net wage in industry and services fell from 65 per cent in 1984 to 53–6 per cent in the 1985–90 period (González-Páramo, 1998). Actually, other countries, such as Denmark, Austria, France, Germany, Iceland, Norway, and Sweden, also provide approximately 60 per cent of income replacement (especially for the lowest incomes). In other countries, such as the Netherlands, the public pension is related to net minimum wage (100 per cent, 90 per cent, 70 per cent for couples, single parents and single persons respectively). Final benefits exceed by far what the pensioners of the South receive not only in absolute terms but also in terms of purchasing power. It should be noted that countries with low public pension replacement rates may in fact have high replacement rates through private schemes, which are not reflected in this comparison of public pension benefits (Kalisch and Aman, 1999: 11). What is more important is the fact that the comparison between percentages estimated on the basis of the wage, conceals the fact that the minimum wage in most of the Southern European countries is barely above the level of poverty and the average one is quite modest. In Greece, for instance, the average wage corresponds to 65 per cent of the European average, whereas the Greek worker is obliged to work 89 per cent more, time-wise, than his average colleague in order to purchase a similar package of basic goods (Robolis, 1999: 189). Consequently, if pensions were actually lower than wages, they would not allow the survival of the pensioners, since many of them are already below the poverty line threshold. For example, in Greece, 100 per cent of the OGA and 70 per cent of the IKA pensioners (521,621 of the total number of 754,964 pensioners) receive pensions which are less than 50 per cent of GNP per capita. With regard to the other insurance funds, only 9,500 beneficiaries receive a pension equal to or greater than GNP per capita, which is the second lowest in the EU (approximately 800 ECU per month); 75,000 receive pensions even below the lowest IKA pension (Robolis and Kollias, 1998). Similarly in Portugal and Spain half of the pensioners receive benefits lower than the minimum wage (Ayala, 1994: 171). The real situation of the level of pensions, far from being generous, can be determined only with reference to the calculation of pension benefits in PPS (Purchasing Power Standards). The official statistics of the European Union (Eurostat, 1994d) distinguish three groups of countries based on the criterion of the ‘generosity’ of their social protection systems, calculated on the basis of average benefits paid to retired persons. Italy and Luxembourg belong in the most generous group. All the other Southern European countries, however, belong to the least generous group, together with Ireland (see Table 4.4). As Table 4.4 shows, the Italian pensioner receives 135 per cent of the average benefit of the EU, and his/her Greek counterpart gets only half and the Portuguese a third of this amount.

Social Security 101 Table 4.4 Average old age-survivors’ benefit per person aged 65 or over (in PPS, EUR ⫽ 100)

Belgium Denmark Germany Greece Spain France Ireland Italy Luxembourg Netherlands Portugal United Kingdom Europe

1980

1992

110.5 94.9 122.9 40.7 61.6 115.3 45.9 123.4 152.6 123.8 28.9 75.7 100.0

103.9 87.9 109.5 52.5 61.1 117.2 44.9 135.6 172.0 116.8 36.8 79.6 100.0

Source: Eurostat (1994d).

One should also take into account that contribution rates are generally higher than the European average. In Portugal these are up to 34.25 per cent of the real wage, in Spain 28.3 per cent and in Italy 27.27 per cent, whereas the respective figure for Germany is 17.5 per cent, for Belgium 16.36 and Sweden 19.45 per cent (González-Páramo, 1998; US Social Security Administration, 1999). The argument of generosity seems, therefore, fully justified only for the Italian pension system and especially for the pensioners at the high income end. This is so not only because of the much higher level of the average pension in comparison to the other countries of the South, both in absolute terms and in purchasing power, but because of the very high replacement rate of high incomes. According to Modigliani and Ceprini (1998) for instance, the difference in the income replacement rate between an Italian and a French pensioner was 11 per cent for the lowest income but 37 per cent for the highest one. Moreover, the recent Italian reforms of 1992, 1995 and 1997 seem to subsidise above-average incomes at the expense of lower ones (Pizzuti, 1998). Minimum income schemes One of the most striking deviations of the social protection systems of the Southern European countries (Ferrera, 1999: 38) used to be the complete lack of minimum income schemes. This is not true any more for all the countries concerned, and there are differences between the countries covered by this study. Portugal had the first national scheme that was introduced in 1996 (Laparra and Aguilar, 1997). Spain has a nationwide programme administered by the 17 autonomous states (Estvill, 1993). On the other hand, Italy has only regional programmes, whereas Greece is still


lacking a similar scheme, with the exception of a special allowance for the low-income elderly. The EU has stressed the importance of the existence of similar programmes. The 1992 recommendation of the European Commission on sufficient resources and social assistance (Official Journal L 245, 26 August 1992) established common principles for the minimum income schemes. These were seen as an important factor to combat poverty, demonstrating that they are more effective when they actively help beneficiaries to become integrated into the labour market (European Commission, 1998b). The schemes adopted by the Iberian countries came as a response to this necessity. They have a lot in common with the French IRM (Insertion Revenue Minimum) programme, in the sense that their basic objective lies in the reintegration of the beneficiaries into the labour market. Not only are there penalties for people who turn down a job or refuse to participate in integration measures, but some autonomous communities in Spain have maintained a strict ban on receiving minimum income and being employed. Benefits may be suspended for a few months, and the suspension can be extended in the event of a further refusal. There are few statistics available on the actual application of penalties (for example, 2.1 per cent of the recipients in Portugal) (European Commission, 1998b). The recipients undertake the responsibility to accept an occupation through a ‘social insertion contract’ – in Spain the proyecto de integracion, in Portugal the acordo de inserio. In the case of Portugal this also involves the local communities, represented within specific integration committees. These agreements are not direct employment contracts, but can deal with education, health and/or social support; in Portugal, one out of ten also covers housing needs. The aforementioned schemes are not yet as efficient or inclusive as in the core EU countries. In Spain for instance, despite the fact that all regional governments now have a ‘salario social’ programme (Navarra being the first in 1985 and the Balearic Islands the last in 1995), there are vast differences from one region to another. Whereas the Basque Ingreso Minimo de Insercion and the similar schemes of Madrid, Catalonia and Navarra are based on the French IRM model, other regions have only discretionary workfare assistance programmes and occupational training courses. Moreover, there are time limits for the provision of benefits, which in many regions are very short (Laparra and Aguilar, 1997). The situation is worse in the other two Southern European countries. In Greece there is not yet a generalised minimum income scheme. Law 1296/82 of the first socialist government established a means-tested noncontributive pension, for the elderly (over 65 years of age) with low incomes and without any insurance. In 1996, a special allowance (EKAS) was provided for pensioners with very low incomes. This is the first example of the application of means testing in the Greek pension system. In 1996, 1998 and 1999 new legislation has meant an increase in the number

Social Security 103

of beneficiaries (estimated in 2000 at 360,000) and of the amount received, which is still however, very low – below the subsistence level. In Italy a special allowance (‘pensione sociale’) is provided by the INPS (Istituto Nationale della Providenza Sociale) to the low-income elderly over 65 years of age, regardless of whether they have paid any insurance contributions. There is also a special scheme (Integrazione al minimo) which guarantees a non-contributive pension to persons who do not satisfy the minimum contributions required. The budget of 1998 has also included the introduction of pilot schemes of minimum income support and reinsertion at the local level (Ferrera, 1999: 62). However, in Italy the territorial dimension is of paramount importance, as the regions have, since 1972, responsibility for social assistance programmes with very unequal outcomes. In particular, the minimum income schemes are ‘virtually non-existent in southern Italy’ (Fargion, 1997: 151), a geographical area where they are needed more than elsewhere.

Facets of the social security systems in the four Southern countries Services and benefits All public retirement income pensions are of a Bismarckian type, funded on a pay-as-you-go (PAYG) basis, where current pension financing sources from the current working population are used to fund the retirement benefits of the currently retired population. The typical public earnings-related pension schemes generally require contributions for at least a minimum period, with the government responsible for some portion of the costs. In total, the replacement rates generated from these public pension schemes generally far exceed the ILO Convention No. 102 and the Council of Europe European Code of Social Security standards, according to which public old age pensions should have a replacement rate of at least 40 per cent per household. The methods by which pensions are calculated according to prior earnings vary considerably. However complicated the benefit formulae maybe, they follow the general rule of the state-corporatist systems, reflecting average earnings as well as length of coverage and contributions made by the insured. There are two methods of indexing final benefits, according to changes in price inflation or wage growth (see Table 4.5). Women (especially those with under-age children) and civil servants have traditionally had generous eligibility requirements. This is especially true for Italy and Greece, where married women working in the civil service, especially before the reforms of the 1990s, could retire in their 40s, with less than 20 years of contributions. Despite differences in detail, the similarities in the ‘ethos’ of the pension systems of Italy and Greece are shown in Table 4.5 (for instance, the age of retirement, the provisions for survivors’ and disability pensions, etc.).

Table 4.5 Qualification requirements and services Italy

Portugal

Spain

65 Men 60 Women (After the reform of 1997, flexible retirement, under various qualifying conditions, see below.)

65 Men 65 Women (since 1999) Special retirement ages: Miners 50; longshoremen, fishermen and merchant seamen 55.

65 Men 65 Women (64 if the pensioner is replaced by an unemployed worker) Exceptions of special earlier pensionable age for harsh, dangerous jobs.

Insured person: 11% of earnings. Self-employed, 25.4% for mandatory coverage and 32% for voluntary coverage. Employer: 23.75% of payroll. Includes 0.5% to cover employment-related illness. Government: Subsidy for social pension and any overall deficit.

Insured person: 4.7% of covered earnings based on wage classes that vary according to 11 occupational classes. Employer: 23.6% of earnings according to 11 occupational classes. Government: Annual subsidy and any overall deficit.

Age of retirement

65 Men 60 Women Many exceptions of special earlier pensionable age.

Financing

Insured person: 8.89% of earnings for Insured person: 6.67% of earnings; 8.87% if in arduous earnings up to 65,280,000 lira per year; 9.9% for earnings exceeding that or unhealthy employment. Employer: 13.33% of payroll; amount. Employer: 23.81% of payroll. 14.73% if in arduous or Government: Full cost of means-tested unhealthy employment. allowance and any overall deficit. Government: 10%, full cost of means-tested allowance and any overall deficit.

Qualifying conditions

Retirement age flexible from age 57 in (IKA) Minimum of a (General Regime, run by contributory scheme, or even at age 52 IGFSS) Old age pension: certain number of days of with 35 years of contributions. Old age 15 years of contributions contribution (standard: 4,500 days) or at least 3,600 pension is divided into three and 120 days of registered categories: work days in arduous or pay per year. 1 New entrants to the labour force unhealthy employment, as of 1996. Age 57 and five years of including at least 1,000 contribution. Retirement necessary. days in the last ten years No seniority pension. before retirement. 2 Insured persons with less than 18 years of coverage under the old law. As of 1 January 1999, age 64 (men) or 59 (women) and 19 years of coverage. As of 1 January 2000, age 65 (men) or 60 (women) and 19 years of contributions.

(General Regime) 15 years of contributions, including 2 years of contribution in last 15 years. Reduced pension at age 60: reduced by 8% for each year less than 65, or by 7% if 40 years or more of contributions and involuntarily unemployed.

104

Greece

As of 1 January 2001, age 65 (men) and 60 (women) with 20 years in 2001. Seniority pension: as of 1 January 1999, age 55 and 35 years of contributions; in 2002, 40 years of contributions, or age 57 and 35 years of contributions. 3 Insured persons with more than 18 years of coverage under the old law. Same as category 2 except that 15 years of contributions must have been prior to 1992. As from 1 January 1999, age 55 and 35 years of contributions gradually are rising to 40 years in 2008. Disability pension Loss of 80% of normal earning capacity for 100% disability; at least 50% loss for partial disability. Worker must have 4,500 days of contribution or 1,500 days, including 600 days in five years preceding disability.

Benefits

Disability pension Disability pension Disability pension (Pensione per invalidi civili) Loss of 2/3 of earning capacity. Loss of normal earning Five years of contribution, including at 60 months of contribution. capacity. If under the age of least three years in five years preceding 26, contributed for 1/2 the application. time between age 16 and Disability pensions are subject to an date of disability; over age income test. 26, contributed for 1/4 the time from age 20 to date of disability, with at least five years of contribution and with at least 1/5 of the required contributions in last ten years. Old age pension 2% of average annual earnings during highest ten of last 15 years times years of insurance. Minimum monthly pension: 30% of average earnings or a minimum fixed amount depending on the number

Old age pension 50% of benefit base for the first 15 years of contribution, plus 3% for each year between 16 and 25 years, and 2% for each year beginning with the 26th year, up to a maximum of 100%.

105

Old age pension 30% to 70% Old age pension For category 1: pension based on of average earnings during amount of accumulated contributions last five years, varying times coefficient that varies according inversely with earnings to age, ranging from 4.72 at age 57 to level, according to 28 wage 6.136 at age 65. classes, plus 1% of earnings for each 300 days of contri- 2 For category 2: service prior to December 1995 based on progressive bution between 3,300 and

106

Table 4.5 (Cont.) Greece

Italy

7,800 days, and 1.5 to 2.5% (depending on earnings level) for each 300 days beyond 7,800. For persons who first start working after 1993, 1,714% of average earnings during last five years. Pension reduced 0.5% for each month of early retirement. Maximum limit of earnings in calculating contributions 10%.

percentage (0.9 to 2) of salary times years of contributions. Service after December 1995 is the same as category 1. 3 For category 3: based on progressive percentage (0.9 to 2) of salary times years of contributions. Minimum pension: 709,550 lira a month. Schedule of payments: monthly with a 13th payment in December. Means-tested old age benefit (social pension): up to 615,800 lira a month payable at age 65, if resident citizen (13 payments a year).

Portugal of contributions, whichever is higher. Maximum monthly pension: 80% of average earnings.

Disability pension Disability pension Disability pension Same as full old age pension, Same as old age pension plus increment Same as old age pension (2% in cases of serious disability, based on number of years until normal of average annual earnings loss of 80% of normal earn- pension age. Benefit reduced 25% if during highest ten of last ing capacity. beneficiary earns equivalent of four to 15 years times years of Ordinary disability, loss of five times the minimum annual social insurance). 67–79% of earning capacity: security pension; reduced 50% for 75% of full old age pension. earnings that exceed five times. Partial disability, loss of 50–66% of earning capacity: 50% of full old age pension.

Spain Minimum pension at age 65: 56,990 pesetas a month (67,050 pesetas with spouse). Reduced pension if under age 65, minimum 49,735 pesetas (58,690 pesetas with spouse).

Disability pension Same as old age pension for permanent total disability for all work, base up to maximum earnings for contribution purposes. For permanent total (occupational) disability (reduction of 100% of capacity to work in own trade or profession), 55% of benefit base, plus 20% if age 55 or over. For permanent partial disability (33% reduction of capacity to work in own trade or

profession), lump sum equal to 24 monthly payments of 75% of benefit base.

Adjustment

Survivors’ pension 70% of basic pension of insured (50% for persons starting working after 1993) payable to widow or dependent disabled widower. Orphans: 20% of basic pension of insured, or 60% for full orphans, if under age 18 (24 if student, no limit if disabled).

Survivors’ pension 75% of pension paid or accrued to insured for those with earnings of three to four times the annual minimum social security pension. 60% for those earnings between four to five times annual minimum social security pension; 50% for those earnings above five times annual minimum social security pension. Benefit equal to 70% if young, dependent child, student or disabled. Maximum survivors’ pensions: 100% of pension of insured.

Survivors’ pension 60% of pension of insured. Limited to five years to widow unless over age 35, disabled, or having a child responsibility. Orphans: 20% of insured’s pension for first, 30% for two, and 40% for three or more orphans under age 18 (25 if student, no limit if disabled); maximum, 40%, 60% or 80% if full orphans. Maximum survivors’ pensions: 100% of pension of insured.

Survivors’ pension 45% of either the benefit base for survivors (computed by dividing by 28 the worker’s covered earnings in any uninterrupted 24 month period during the last seven years) or, for pensioners, the base used for determining the pension, whichever is more advantageous. Orphans: 20% of the benefit base (minimum, 16,860 pesetas a month) for each orphan under age 18 (or less than 21 if not working, no limit if disabled). Maximum survivors pensions: 100% of pension of insured.

No automatic adjustment. Public pensions indexed to salaries of civil servants.

No automatic adjustment. The annual adjustment based on average increase in gross domestic product within the last five years has been stopped after the Dini reform.

According to changes in annual cost of living.

Automatic adjustment referred to the annual cost of living (CPI).

Sources: US Social Security Administration (1999: 145, 188, 289, 330); MISSOC Reports (1995, 1996, 1998); Kalisch and Aman (1999: Tables 1 and 14).

107


Greece In Greece, public pensions are provided through a great number of funds, all with the status of public entities of public law and belonging to the public sector, as defined by the law in force (law 2190/94). Recourse to private pensions is still very limited, but growing. According to research undertaken by the Economic Section of the National School of Public Health (1998) for the period 1994–8, the average annual increase in expenditure for private insurance schemes was 7.57 per cent, compared to an average increase of GNP in the order of 1.92 per cent. The funds are permitted to retain cash surpluses. This reflects the system’s original conception as a funded system, something that is also common in the other Southern countries. However, they essentially operate as pay-as-you-go schemes (see Tables 4.6 and 4.7). The affiliation to a fund depends on the nature and the type of work performed. The system is comprised of over 300 of these, divided internally in some cases into a large variety of schemes. The main insurance institution is the Institute for Social Insurance (IKA), members of which are the greater majority of salaried workers and other categories of assimilated employees. Rural workers and those self-employed in agriculture are insured in the insurance scheme for agricultural employees (OGA – Agricultural Insurance Organisation). The majority of selfemployed are insured by OAEE, a new fund with 850,000 insured persons and 220,000 pensioners, which has replaced the three large primary funds for the non-agricultural self-employed (TEVE, TSA, TAE). The new regulations aim at introducing a gradual convergence of pension benefits to the more generous levels of the previous larger fund (TEVE). There are several other schemes for persons belonging to various socio-professional categories. Each insurance institution is subject to different legislation, with a variety of regulations for qualifying conditions, benefits and procedures. There are two types of public pensions – basic and supplementary. The majority of funds providing supplementary pensions (over 200) were created after World War II, in order to supplement the low level of primary pensions, often based on collective agreements. Two large supplementary funds were created in the 1980s. One covers approximately 50 per cent of private sector employees who did not have supplementary coverage, and a second covers agricultural workers, who account for about 50 per cent of the self-employed. The 1998 pension reform unified the 12 supplementary funds for civil servants and the 47 funds for lawyers of all the other Bars besides that of Athens. Moreover, the seven supplementary funds experiencing the most severe financial difficulties were merged with the large supplementary fund for private sector employees (IKA-TEAM). Four major insurance laws were enacted between 1990 and 1996 and another one has been announced for 2002, in an attempt to support the

Table 4.6 Detailed breakdown of social protection expenditure (Greece) – millions, national currency

Social protection expenditure Social benefits Non-means-tested Cash benefits Periodic Lump sum Benefits in kind Means-tested Administration costs Other expenditure

1990

1991

1992

1993

1994

1995

1996

1997

3,052,631

3,546,824

4,033,126

47,108,821

5,353,941

6,065,091

6,849,091

7,717,039

2,868,779 2,690,624 1,981,981 1,855,268 126,714 708,642 178,155 155,040 28,813

3,374,264 3,176,658 2,341,659 2,191,085 150,574 834,999 197,606 153,194 19,366

3,913,498 3,690,634 2,653,356 2,462,774 190,583 1,037,278 222,863 114,360 5,268

4,542,906 4,260,602 3,051,892 2,856,331 195,561 1,208,710 282,304 137,942 37,973

5,154,417 4,829,455 3,487,506 3,256,669 230,837 1,341,949 324,962 190,913 8,611

5,860,560 5,524,132 3,946,381 3,674,056 272,324 1,577,751 336,428 187,670 16,861

6,594,121 6,155,826 4,428,796 4,125,101 303,694 1,727,030 438,295 246,097 8,873

7,438,685 6,749,841 4,768,048 4,421,772 346,276 1,981,793 688,844 267,678 10,676

Source: Eurostat (1999b: Table B 3.4, 22).

109

110

Table 4.7 Detailed breakdown of receipts by type and sector of origin (Greece) – millions, national currency

Receipts by Type Social contributions Employers’ social contributions Social contributions by the protected persons Employees Self-employed persons Pensioners and other persons General government contributions Receipts by Sector of Origin Corporations General government Households Non-profit institutions serving households

1990

1991

1992

1,818,595 1,214,383

2,144,773 1,398,264

2,466,540 1,630,709

604,212

746,509

498,829 105,383 0

1994

1995

1996

1997

2,943,170 1,893,546

3,407,020 2,170,629

3,972,991 2,439,561

4,447,371 2,802,311

4,889,740 3,023,703

835,832

1,049,624

1,236,391

1,533,431

1,645,060

1,866,037

617,781 128,727 0

665,908 157,223 12,700

807,556 209,153 32,915

949,603 237,434 49,354

1,175,802 299,531 58,098

1,241,783 332,035 71,242

1,402,055 379,309 84,674

1,016,456

1,204,681

1,353,047

1,458,626

1,679,287

188,242

2,040,391

2,376,888

885,793 1,518,896 605,303 36,824

1,039,138 1,785,434 747,856 48,164

1,225,754 2,036,284 837,389 46,562

1,493,334 2,235,738 1,051,378 54,314

1,734,562 2,551,219 1,238,382 59,787

1,974,999 2,847,552 1,535,662 64,526

2,238,730 3,120,897 1,648,101 68,920

2,388,963 3,552,121 1,869,342 84,247

Source: Eurostat (1999b: Table D 3.4, 220).

1993

Social Security 111

most endangered insurance units and to promote unification of the regulation as well as a gradual harmonisation of social security contributions. The legislation of the 1990s focused mainly on the financial side, as the deficit of social security organisations increased dramatically from 1.1 per cent of GDP in 1980 to 6.1 per cent in 1989 (Katrougalos, 1996; Venieris, 1994; Robolis, 1995). The retirement age has been fixed at the median EU standard of 60 for female and 65 for male workers. Measures have been taken towards the reduction of pension replacement rates and the raising of eligibility standards, especially in the public sector. Incentives for continuation of work and disincentives for premature retirement have also been enacted. The eligibility criteria for pensions for people with special needs have been made stricter and new procedural controls have been implemented (law 2643/98), in an effort to assure transparency and objectivity in defining whether or not and the extent to which a person is an invalid. The outcome of this effort has been the reduction of pensions for people with special needs to below 15 per cent of the total pensions, from more than 20 per cent in the late 1980s (Mylonas and de la Maisonneuve, 1999). The corrective measures of these consecutive statutes seem to have borne some fruit at the fiscal level as, presently, both the funds deficit and the number of pensioners has slightly decreased. In 1994, 297,432 persons retired, compared to 329,839 in 1990 (Ministry of National Economy of Greece, 1995). However, there is an absence of social consensus on the reform, as the new legislation limited many of the rights of the past, in some cases even for unprivileged social categories. Regarding the equity of the system, the results are ambivalent. According to some authors (Petmesidou, 1996b: 113), the new legislation has increased the polarisation between high- and low-income pensioners. The number of pensioners receiving the minimum pension of IKA (the main insurance fund) reached 71 per cent of the total, while the amount of the pension has been reduced almost by 15 per cent. On the other hand, the setting of new levels of insurance contributions has resulted in a more equilibrated balance between IKA and the other funds. According to research by the Federation of Employees of the Insurance Funds, although the pensions of IKA are still 30 per cent or 40 per cent lower than those of other funds, the contributions of those insured under IKA are much lower. At the same level of contributions, the IKA pension is 44 per cent higher than the pensions of other funds (Asfalismenos, 2000: 12). Some effects of the reforms include: the rationalisation of the contributions; the relative homogenisation of the social legislation and a reduction of the fragmentation of the insurance funds. However, the social security system still faces the spectre of economic collapse, without being able to eradicate poverty (Spraos, 1997). The present value of future pension liabilities is estimated by the OECD to be in the order of 200 per cent of GDP


(Mylonas and de la Maisonneuve, 1999), whereas, according to the pensioner organisations, approximately 80 per cent of the pensions of the private sector are below or around the poverty line. In April 2002 the government announced its main proposals of a new reform, to be fully effective in 2007. The basic elements of the reform are the following: ● ●

●

● ●

●

Gradual increase of retirement age to 65 years for both sexes and all funds. The calculation period for pension benefits will be based on the best ten-year earnings of the last 15 years of work and not on the last five years, as in the past. A 40-years’ work or 12,000 work days’ requirement for a full seniority pension. Minimum pensions will be reviewed on the basis of income criteria. The number of jobs considered as ‘unhealthy and hazardous’, allowing earlier retirement will be reviewed and reduced. The 46 main insurance funds and the 42 main supplementary funds will be merged into eight.

These propositions, with the exception of the last, seem to repeat the pattern of the measures taken in 1990: they focus exclusively on the financial side of the problem, as it is aggravated by the demographic pressure. In addition, they curtail benefits, especially those available to the lower social strata, and do not give a viable solution to the endemic problems of lack of equity and efficiency of the system. Therefore, they met the general opposition of all political and social forces, the trade unionists affiliated with the ruling socialist party included. The socialist president of GSEE rejected the proposals as ‘arbitrary, antisocial and inefficient’. Under these circumstances, the necessary consensus for such sweeping reforms was impossible to attain; the proposals have been withdrawn and the Government promised the beginning of a new round of negotiations with the social partners.

Italy In Italy, as in Greece, there is a plethora of public pension schemes, with a wide variety of rules regarding eligibility and benefits. The social protection expenditure and receipts are also very similar in these two countries (see Tables 4.6, 4.7, 4.8, 4.9). The main organisation, the National Social Welfare Institute (Istituto Nazionale della Previdenza Sociale [INPS]), is the largest social security institution, covering about two-thirds of the population, including farmers and those self-employed in trade and commerce, for whom there are special schemes within the INPS. Civil servants and employees of the local administration are insured by the National Welfare Institute for Employees of Public Authorities (INPDAP). The majority of the liberal scientific professions are insured in special, privatised schemes. The most

Social Security 113 Table 4.8 Detailed breakdown of social protection expenditure (Italy) – thousand millions, national currency


1990

1991

1992

1993

1994

1995

1996

1997

316,030

351,479

387,541

403,540

423,430

442,502

474,539 505,410

300,129 277,559 203,058 186,266 16,792 74,501 22,570 11,817

332,822 308,867 225,024 203,878 21,146 83,843 23,955 12,857

367,877 341,959 254,727 229,934 24,793 87,232 25,918 13,366

382,520 353,676 266,660 242,221 24,439 87,016 28,844 13,793

400,857 370,686 283,802 256,075 27,727 86,884 30,171 14,036

424,247 394,881 309,578 281,103 28,475 85,303 29,366 13,747

455,486 424,912 332,711 304,144 28,567 92,201 30,574 14,255

486,041 455,186 355,191 325,859 29,332 99,995 30,855 14,827

4,084

5,800

6,298

7,227

8,537

4,508

4,798

4,542


Table 4.9 Detailed breakdown of receipts by type and sector of origin (Italy) – thousand millions, national currency

Receipts by Type Social contributions Employers’ social contributions Social contributions by the protected persons Employees Self-employed persons General government contributions

1990

1991

1992

1993

1994

1995

218,599 170,344

241,827 185,521

259,690 198,078

274,824 203,049

276,633 204,678

304,581 225,224

48,255

56,306

61,612

71,775

71,955

79,357

85,100

87,714

32,838 15,417

37,745 18,561

40,486 21,126

44,601 27,174

45,599 26,356

49,103 30,254

55,275 29,825

58,398 29,316

93,213

108,159

121,865

124,831

147,905

134,589

361,292

394,885

415,951

440,460

:

:

:

138,761 161,650 60,881

147,505 180,574 66,806

151,407 186,326 78,218

150,109 212,628 77,723

: : :

: : :

: : :

Receipts by Sector of Origin All resident 321,946 institutional units Corporation 128,098 General government 141,744 Households 52,104

1996

1997

326,750 345,271 241,650 257,557

144,262 156,558


important public special schemes and insurance organisations for the private sector are: ●

● ●

the National Welfare Institute for Industrial Managerial Employees (INPDAI) for managerial employees in industrial enterprises; the National Welfare Institute for Journalists (INPGI) for journalists; the National Welfare and Assistance Institute for Artists (ENPALS) for artists and football players.


Tripartite governing bodies manage all public insurance organisations. The general supervision of social security belongs to the Ministry of Labour and Social Welfare. The implementation is carried out for the majority of the population by INPS, through its branch offices and a number of special schemes for civil servants and other professions. For those workers without sufficient years of contributions to qualify for the earnings-related scheme, there is also a means-tested flat-rate pension. The reforms of 1992 (Amato), 1995 (Dini) and 1997 (Prodi) were conditioned by two main goals (Pizzuti, 1998): the curtailment of deficits and the re-establishment of the equilibrium of the government budget through the reorientation of the system towards the market. The Amato reform considerably reduced the possibilities of early retirement for private-sector workers and curtailed the final benefits pensions by nearly 30 per cent. This ‘shock therapy’ was somehow watered down by the subsequent reform enacted under Lamberto Dini. The Dini Reform of 1995 (law 335/1995) has linked pensions to contributions instead of wages and raised the old age pension retirement age by requiring 40 years of contributions in order to retire before the fixed retirement age. It also removed the fixed retirement age, providing for flexible retirement at the worker’s choice from age 57 to 65, with a respective reduction of benefits, in the case of earlier retirement. Pension benefits have been reduced as a consequence of the gradual increase of the benefit calculation period on lifetime earnings and not on the last five years of earnings or the final salary, as in the past. On the contrary the indexing of pensions to the growth of real national income has not been restored. In this way, according to some estimates (ibid.; cf. Baldacci and Lugaresi, 1995), 15 years after retirement, the initial pension would lose 35 per cent of its value compared with current wages. Law 449/1997 has further raised the retirement age and the number of years of contributions paid for entitlement to seniority pensions. The Dini and Prodi reforms have also focused on the rationalisation of the system and the reduction of the major differences between various social categories, both in terms of the relation of contributions to benefits and in terms of pension eligibility requirements (especially regarding public servants). They have also achieved the separation of the contributive schemes of social insurance from non-contributive social assistance.

Portugal The Portuguese social security system comprises the ‘General Regime or Scheme’ (Regime Geral) and several special schemes, organised along occupational lines and financed according to the typical state-corporatist pattern (see Tables 4.10 and 4.11). The vast majority of employees in the private sector and self-employed persons are covered by the General Regime, with certain differentiations, regarding both benefits and the contributions. Civil

Table 4.10 Detailed breakdown of social protection expenditure (Portugal) – millions, national currency


1990

1991

1992

1993

1994

1995

1996

1997

1,537,135

1,908,157

2,374,613

2,826,658

3,072,355

3,279,445

3,631,760

4,022,962

1,343,954 1,251,379 892,565 881,195 11,370 358,814 92,575 83,417 109,764

1,687,452 1,569,299 1,101,390 1,085,702 15,688 467,909 118,153 91,823 128,882

2,096,571 1,955,579 1,316,852 1,297,169 19,683 638,727 140,993 104,190 173,851

2,458,428 2,287,485 1,522,776 1,501,763 21,012 764,709 170,944 113,529 254,701

2,753,013 2,567,531 1,688,445 1,665,434 23,010 879,087 185,481 122,394 196,948

2,916,171 2,707,560 1,835,682 1,809,911 25,772 871,878 208,611 155,938 207,336

3,239,816 3,022,184 2,002,018 1,956,623 45,395 1,020,166 217,631 134,924 257,021

3,539,487 3,306,207 2,162,165 2,126,914 35,251 1,144,042 233,279 146,038 337,437


115

116

Table 4.11 Detailed breakdown of receipts by type and sector of origin (Portugal) – millions, national currency

Receipts by Type Social contributions Employers’ social contributions Social contributions by the protected persons Employees Self-employed persons Pensioners and other persons General government contributions Receipts by Sector of Origin Corporation General government Non-profit institutions serving households Source: Eurostat (1999b: Table D 3.12, 228).

1993

1994

1995

1996

1997

1,245,470 798,790 446,681

1,317,133 846,813 470,320

1,436,203 887,613 548,590

160,665 983,618 619,046

1,628,993 989,349 639,644

1,829,346 1,119,561 709,785

357,029 33,309 2,422 670,221

406,708 36,569 3,404 842,979

424,932 40,743 4,645 1,074,705

480,774 59,239 8,577 1,173,617

533,004 76,442 9,600 1,293,277

533,268 94,884 11,492 1,603,210

585,936 108,929 14,920 1,697,671

748,563 711,815 42,694

837,928 915,401 45,724

904,982 1,136,964 47,862

1,065,088 1,246,067 53,231

1,127,395 1,363,353 55,013

1,043,308 1,890,492 64,055

117,353 1,845,560 75,003

1990

1991

933,282 606,695 326,588

1,105,448 712,688 392,760

296,390 28,153 2,045 551,637 637,414 583,319 40,681

1992

Social Security 117

servants and some scientific liberal professions, such as lawyers, are covered by special schemes, with their own autonomous organisations. The General Regime is administered by five regional social security centres, divided into sub-regional services, responsible for: sickness (cash benefits); maternity; unemployment; family benefits; and the non-contributory scheme. General supervision is the responsibility of the Ministry of Labour and Solidarity. The National Pensions Centre has the overall responsibility for insurance with regard to: old age; people with special needs; and death. The National Centre for Protection against Occupational Risks has responsibility for occupational diseases. In 1993 a number of responsibilities were removed from the district to the regional level. The 18 regional social security centres that had been set up following the 1978 reorganisation became sub-regional services. They then came under five new regional social security centres, which corresponded to the five administrative areas into which Portugal is currently divided, that is Lisbon and the Tagus Valley, the Centre, the North, Alentejo, Algarve (Guibentif, 1997: 233).

Spain The Spanish social security system is based on the principles of obligatory and unique affiliation and the existence of a common legal regime. As in Portugal, it is made up of a General Regime and several special schemes. Affiliation is obligatory for all workers, including foreign residents, over 16 years of age, in all branches of the economic activity. The General Regime covers the vast majority of employees in industry and services and it is classified according to 11 occupational categories. The social security system also includes the following special schemes (see Table 4.14): ● ●

●

●

● ●

special scheme for the self-employed; special scheme for rural workers, including all workers in the fields of agriculture, forest or cattle-raising, the workers occupied in tasks of irrigation for exclusive agrarian use. It includes also the self-employed in the agrarian sector; special scheme for coal miners, including all workers involved in the industry; special scheme for domestic employees, including those working in family or domestic business; special scheme for fishermen; public sector employees.

Different, generally more favourable rules apply to the special schemes, with many peculiarities concerning affiliation and quotation. All insured


persons having contributed for 15 years are entitled to a minimum pension varying, in relation to age and marital status from 75 per cent to slightly more than 100 per cent of the minimum wage. The General Regime is gradually expanding, absorbing pre-existing special regimes. For instance, Royal Decree 480/1993 integrated the Special Regime of the Civil employees of the Local Administration into the General Regime. Finally, the financing of the system is, grosso modo, similar to that of the other South European countries (see Tables 4.12 and 4.13). Regarding the administration of benefits: ● ● ●

●

the National Institute of Social Security administers and pays cash benefits; the National Institute of Social Services administers benefits in kind; the National Social Security Office (Instituto Nacional de la Seguridad Social, INSS) manages the cash benefits, i.e. old age pensions, permanent invalid benefits, widowers’ and widows’ pensions, orphans’ pensions, pensions for family members, cash benefits in the case of temporary incapacity for work, maternity, family benefits and other allowances and benefits; the Navy’s Social Office (Instituto Social de la Marina, ISM) is in charge of the social protection of the employees of the merchant navy, the fishermen and in general of the employees in marine shipping.

All these organisations have autonomous legal personality and act as legal entities under public law. The Ministry of Labour and Social Affairs has the general supervision over the system, whereas the General Treasury of Social Security administers its economic resources. The only fund entitled to collect contributions is the General Social Security Revenue Office (Tesoreria General de la Seguridad Social, TGSS). As in the other South European countries, the increase of the social security deficit, the demographic pressure and the need for rationalisation of the system resulted in the introduction of widespread reforms. Already in the 1980s, measures tightening the eligibility requirements for invalid pensions resulted in a reduction of the number of pensions by 8.1 per cent per year in the 1982–5 period to 1.8 per cent per year from 1985–90 and to 1.3 per cent per year from 1990–95 (González-Páramo, 1998). In 1995 the proposal of a parliamentary commission resulted in a widespread agreement (‘Toledo Pact’) regarding a general reorganisation of the system and the gradual integration of the special schemes and the General Regime into two main regimes: employees and the self-employed. The 1997 reform introduced the following changes: ●

● ● ●

gradual extension (over the 1998–2002 period) of the contribution period from eight to 15 years; a stricter delimitation of contributive and non-contributive pensions; improvement of the proportionality between contributions and benefits; automatic indexing correlated to the CPI.

Table 4.12 Detailed breakdown of social protection expenditure (Spain) – millions, national currency


1990

1991

1992

1993

1994

1995

1996

1997

10,279,131

11,981,630

13,596,720

15,032,921

15,201,074

15,840,425

16,598,208

17,115,960

10,017,779 8,652,111 6,284,443 5,797,811 486,632 2,367,668 1,365,668 255,895 5,457

11,624,842 10,081,992 7,256,904 6,626,846 630,058 2,825,088 1,542,850 304,931 51,857

13,222,290 11,456,678 8,250,762 7,502,448 748,314 3,205,916 1,765,612 339,067 35,363

14,603,480 12,597,577 9,151,009 8,106,228 1,044,781 3,446,568 2,005,903 378,492 50,949

14,823,399 12,776,449 9,221,137 8,452,447 768,690 3,555,312 2,046,950 356,815 20,860

15,420,207 13,394,982 9,606,072 8,832,137 773,935 3,788,910 2,025,225 378,040 42,178

16,173,387 14,068,440 10,111,340 9,384,164 727,176 3,957,100 2,104,947 386,649 38,172

16,686,462 14,551,316 10,418,200 9,682,173 736,027 4,133,116 2,135,146 386,258 43,240


119

120

Table 4.13 Detailed breakdown of receipts by type and sector of origin (Spain) – millions, national currency 1990

1991

1992

1993

7,336,016 5,601,249

8,183,160 6,230,383

9,392,861 7,189,794

1,022,276 7,718,239

1,083,042 8,025,236

1,067,976 7,950,574

1,145,756 8,549,417

1,208,943 9,056,299

1,734,767

1,952,777

2,203,067

2,504,527

2,805,184

2,729,191

2,908,151

3,033,135

937,500 496,339 300,931

1,019,526 550,308 382,943

1,137,726 605,933 459,408

1,305,726 656,483 542,318

1,438,453 845,810 520,921

1,424,818 844,540 459,833

1,534,990 958,664 414,497

1,588,337 1,042,674 402,124

2,694,548

3,199,437

3,741,931

4,719,451

4,384,449

4,723,618

4,573,043

4,701,402

Receipts by Sector of Origin Central government 3,181,319 Households 1,850,373 Non-profit institutions 13,947 serving households

3,616,488 2,085,497 9,824

4,386,175 2,357,852 8,750

5,419,989 2,670,203 9,161

5,082,680 2,975,958 9,237

5,463,194 2,903,387 9,812

5,240,222 3,091,506 10,006

5,333,257 3,216,887 9,301

Receipts by Type Social contributions Employers’ social contributions Social contributions by the protected persons Employees Self-employed persons Pensioners and other persons General government contributions


1994

1995

1996

1997

Social Security 121 Table 4.14 General Regime and special schemes, 1996 Number of contributors (thousands and % of total)

Average contribution* (thousand pesetas)

9,269.9 (68.9) 4,178.6 (31.1) 2,072.0 (15.4) 1,040.4 (7.8) 98.0 (0.7) 30.0 (0.2) 132.0 (1.0) 806.2 (6.0)

599.9 249.0 371.9 170.9 384.5 903.5 205.7 N/A

1. General Regime 2. Special schemes Self-employed Rural workers Fishermen Coal miners Domestic employees Government employees Note * Calculated for an average new pension.

Source: Fundación BBV, FEDEA, cited in González-Páramo (1998).

Final remarks The social protection systems of all four Southern European countries are in urgent need of modernisation. As we have seen in all of these systems during the 1990s, major reforms were implemented. These have had a limited impact and did not solve the structural problems of the pensions systems. A number of international organisations – especially the OECD – and international experts (for instance, the proposition of Nobel Laureate Franco Modigliani – Modigliani and Ceprini, 1998 – for Italy, the Spraos report – Spraos, 1997 – for Greece) have proposed even more radical reforms of the actual systems, usually towards a fully capitalised system. However, insolvency of the system is not inevitable, as there are many factors that have not been taken into full account. For instance, the legalisation and inclusion of a great number of immigrants into the social insurance system could possibly balance their deficits for the foreseeable future. Still, one should not overlook the fact that the reforms till now focused mainly on the financial and organisational sides of the problem. Still, the rationalisation of the system and its administrative organisation, and the readjustment of financial mechanisms and measures against fraud constitute a necessary but not sufficient step. In order to ensure their social utility, the social protection systems must be adapted to the new social realities, in order to protect both ‘insiders’ and ‘outsiders’ of the formal labour market. The introduction of minimum income schemes in practically all these countries (except Greece) shows a definite positive evolution towards these goals. As the EU Social Affairs and Employment Council emphasised in its Conclusions of 6 June 2000, in order to eradicate poverty and promote social inclusion, the goal of managing social


expenditure cannot be achieved without securing the adequacy of pensions and social solidarity. The need for the creation of an effective safety income net, for social services addressing all strata of the population and covering all risks, old and new, remain a basic priority for the European countries of the South.

5 National Health Systems: An Originality of the South?

Introduction The non-contributive national health systems (NHS) of the Southern European countries signify a deviation from the ideal type of the European state-corporatist systems, which are basically based on the insurance principle. Actually, it is, inter alia, on this special feature that the main arguments for the existence of a separate South European welfare model rest (see Chapter 1). There are two principal forms of health care organisation in the European Union: the tax-financed national health service systems and those operating with social insurance in which insurance funds have different degrees of legal and economic independence from the government (Jakubowski, 1998: 5 ff ). The main peculiarity of the Southern countries is that, although their social protection system is based on insurance principles, their national health systems are mainly tax-financed and their services are provided universally. However, civil and military servants belong to special schemes in almost all countries, and, especially in Greece, work status still determines the level of some of the services provided. In general, heterogeneity of coverage entitlements remains the rule, at least in Portugal and Greece. However, one should keep in mind that the initial division between insurance-based (Bismarckian) and tax-based (Beveridgean) health systems is weakening. For instance, countries which have adopted the tax-based system, such as the United Kingdom, have opened up their NHS to internal competition, whereas in some traditional social insurance systems, sickness funds are being merged and cost control increased by the central government (ibid.). In Greece, for example, although in theory the insurance funds finance the hospital care of their insured, due to their huge deficits, a very important part of the related cost is handled by the state budget. Moreover, as shown in Table 5.1, the actual coverage of the population is almost universal in both types of systems and in all countries. This is not the case only in those countries where universality of health care is 123

124 Southern European Welfare States Table 5.1 Percentage of population with public health care coverage in OECD countries, 1960 and 1995

Australia Austria Belgium Canada Czech Republic Denmark Finland France Germany Greece Hungary Iceland Ireland Italy Japan Korea Luxembourg Mexico Netherlands New Zealand Norway Poland Portugal Spain Sweden Switzerland Turkey United Kingdom United States

1960

1995

100 78 58 68 100 95 55 76.3 85 30 N/A 100 85 87 88 0 90 N/A 71 100 100 N/A 18 54 100 74 5.8 100 20

100 99 99 100 100 100 100 99.5 92.2 100 99 100 100 100 100 100 100 68.5 71.8 100 100 N/A 100 99.5 100 99.5 N/A 100 45

Sources: OECD (1997c; 1998c).

guaranteed by the law (as in the Scandinavian countries, the UK and, grosso modo, in the European South). In Austria, Belgium, France, Luxembourg 99–99.5 per cent of the population is insured through compulsory schemes. In Germany, the percentage of coverage is 92.2 per cent. A notable exception is the Netherlands, where compulsory health insurance covers only 60 per cent of the population. In addition, there are considerable differences between the four countries in all aspects of the institutional matrix, the organisation and the performance, as well as the problems inherent in the health systems. If there is a common feature, it is the fact that in all four countries the NHS remains today (that is more than two decades after its introduction),

National Health Systems 125

a half-institutionalised premise. It is true that nearly full coverage of the population has been achieved, but with regard to efficiency and equality of services, these lag considerably behind the EU average (see below). Another common feature is the historical formation of the NHS of Southern European member states. With the exception of Italy, the NHS was the outcome of a political initiative of the new social-democrat majorities that came to power after decades of conservative or even dictatorial rule. As such, it was ideologically very symbolic, which is reflected in the general principles enshrined in all related legislation (see p. 129). Still, the potential for an effective universal health system has been largely undermined by the lack of consistent institutional organisation and financial planning. The choice of the establishment of a Beveridgean, universal type of NHS (as opposed to the insurance-based traditional patterns) by the governments of the time has been facilitated by the institutional status quo ante. Despite the very low health coverage of the 1960s, a quasi-universal coverage of the population had been achieved in the late 1970s. This had been done under the former insurance regime, just before the introduction of the NHS (for instance, the coverage in Greece was 95 per cent and in Spain 89.6 per cent in 1983 [Greek Centre of Social Research, EKKE, 1988: 185]). The transition to the new system was not problematic from an economic point of view, as the state was already subsidising insurance funds and hospitals, in order to cover their economic deficits. Still, one has to point out the deficits in infrastructure and the regional discrepancies, which continue to be, even today, the main flaws of the Southern NHS, especially in Portugal and Greece. The national health systems have made a huge contribution to the health of the population of the South European countries. However, there are a number of concerns, some of them common to the other EU countries, some specific to at least some of the Southerners. Problems of the first category are related to the increasing financial cost of the system (Niakas, 1991). This is generally attributed to the rise in the proportion of older people and the increasing cost of new medical technology.1 Endemic problems of the second category are, among others: ● ● ●

the inadequate efficiency of the infrastructure; unsatisfactory provision of services in terms of equity; erratic – and sometimes irrational – organisation of manpower and human resources.

Facets of these problems will be analysed below, in the paragraphs related to the NHS of each country. The first part of this chapter provides a general overview of the health status and the status of health protection in the European South. The second part highlights the basic organisational, institutional and material characteristics of the national health systems. The fundamental sources of statistical and other information used in this chapter (in addition to any other secondary sources) are taken from


a number of sources. These sources include: the data of the National Statistic Services; data presented by the national Ministries of Health in WWW; the Eurostat detailed tables on Social Protection Expenditure and Receipts 1980–1997 (Eurostat, 2000b); the OECD Health Data (OECD, 1998b); the WHO ‘Health for All’ database; the comparative study of the European Parliament on various health systems (Jakubowski, 1998); the series of the DGV Social Protection in the Members of the European Union (MISSOC); the US Social Security Administration, 1999; and the Annual Surveys on Developments and Trends conducted by the International Social Security Association (ISSA). Table 5.2 Life expectancy at birth: the Southerners and the world, 1900–96 Countries

Australia Austria Belgium Canada Czech Republic Denmark Finland France Germany Greece Hungary Iceland Ireland Italy Japan Korea Luxembourg Mexico Netherlands New Zealand Norway Poland Portugal Spain Sweden Switzerland Turkey United Kingdom United States OECD*

Females

Males

1900

1960 1970

1980 1990

58.8 41.1 48.8 N/A 41.7

73.9 71.9 73.5 74.3 73.4

74.2 73.4 74.2 76.4 73.0

78.1 76.1 76.8 79.1 73.9

56.2 48.1 48.7 48.3 N/A 37.9 53.1 49.6 44.8 44.8 N/A N/A N/A 53.4 60.6 57.7 N/A N/A 35.7 57.0 52.2 N/A 52.4

74.1 71.6 73.6 72.7 70.7 70.1 75.0 71.8 72.3 70.2 57.8 71.9 59.1 75.5 73.9 75.8 70.6 67.2 72.2 74.9 74.1 49.7 74.2

75.9 74.2 75.9 73.6 73.6 72.1 76.9 73.2 74.9 74.7 66.7 73.9 62.5 76.6 74.6 77.3 73.3 71.0 75.1 77.1 76.2 57.2 75.2

50.7 49.6

73.1 71.8

74.7 73.9

Note * Unweighted averages, excludes Turkey. Sources: OECD (1998b,c).

1996

1900

1960

1970

1980 1990 1996

80.1 78.9 79.1 80.4 76.0

81.1 80.2 81.0 81.5 77.2

55.2 39.1 45.4 N/A 38.9

67.9 65.4 67.7 68.4 67.6

67.4 66.5 67.8 69.3 66.1

71.0 69.0 70.0 71.9 66.8

73.9 72.3 72.4 73.8 67.5

75.2 73.9 74.3 75.4 70.5

77.6 77.6 78.4 76.6 76.6 72.7 79.7 75.0 77.4 78.8 69.1 75.1 69.5 79.2 76.3 79.2 74.4 75.8 78.6 78.8 78.8 64.8 75.9

77.7 78.9 80.9 79.0 79.4 73.7 80.3 77.5 80.0 81.9 75.4 78.5 74.0 80.1 78.3 79.8 75.5 77.9 80.5 80.4 80.9 68.4 78.6

78.0 80.5 82.0 79.9 80.4 74.7 80.6 78.5 81.3 83.6 77.4 80.0 76.5 80.4 79.8 81.1 76.8 78.5 81.6 81.5 81.9 70.5 79.3

52.9 45.3 45.3 44.8 N/A 37.1 48.3 49.3 44.2 44.0 N/A N/A N/A 51.0 58.1 54.8 N/A N/A 33.9 54.5 49.3 N/A 48.5

72.3 64.9 67.0 67.0 67.5 65.9 70.7 68.5 67.2 65.3 53.0 66.1 58.6 71.6 68.7 71.3 64.9 61.7 67.4 71.2 68.7 46.5 68.3

70.7 65.9 68.4 67.2 70.1 66.3 71.0 68.5 69.0 69.3 59.8 67.0 58.2 70.9 68.3 71.0 66.6 65.3 69.6 72.2 70.3 54.2 68.6

71.4 69.2 70.2 69.9 72.2 65.5 73.7 69.5 70.6 73.4 62.7 68.0 62.3 72.4 70.0 72.3 66.0 67.7 72.5 72.8 72.3 59.1 70.2

72.0 70.9 72.7 72.7 74.6 65.1 75.7 72.0 73.5 75.9 67.4 72.3 67.7 73.8 72.4 73.4 66.5 70.9 73.4 74.8 74.0 64.1 72.9

72.8 73.0 74.1 73.6 75.1 66.6 76.2 73.2 74.9 77.0 69.5 73.0 70.1 74.7 74.3 75.4 67.8 71.2 74.4 76.5 75.7 65.9 74.4

77.4 76.5

78.8 78.7

79.4 79.8

47.9 47.0

66.6 66.8

67.1 67.8

70.0 69.8

71.8 72.0

72.7 73.4


Health status of the population Southern Europeans hold a relatively poor position on a number of health status indicators directly related to the level of medical services, such as infant and maternal mortality (Tables 5.4 and 5.5). However, clear progress has been made over the last decades, reflecting a more general improvement in the average quality of life. Moreover, morbidity from cardiovascular diseases and cancer tends to be low. This explains a relatively better than average record in overall indicators like potential life years lost per 100,000 due to selected pathologies (see Table 5.6). The famous ‘Mediterranean diet’ seems to be one of the reasons for this phenomenon, although not the only or the most important one. Patterns of social and family life also seem to play a decisive role (Ngoi Ngongo, 1999). Life expectancy at birth has increased substantially for both genders over the last decades. Male life expectancy has increased to levels that are often higher than the European average, particularly in Italy and Greece. (Greek men are the second most long-lived Europeans, after the Swedes.) However, the difference between men and women remains substantial, as female life expectancy is still below the European average (see Tables 5.2 and 5.3). Table 5.3 Life expectancy at age 65 and 80 65 years

Greece Italy Portugal Spain OECD

80 years

Male

Female

Male

Female

16.1 15.7 14.3 15.8 15.0

18.4 19.6 17.7 19.8 18.7

7.3 6.8 5.7 7.0 6.6

7.7 8.3 7.0 8.5 8.1

Sources: European Commission (1999: Com 99–347, Table 2); UNDP (1999a).

Table 5.4 Infant mortality, 1900–96 Deaths per 1,000 live births Countries

1900

1960

1970

1980

1990

1996


N/A 174 134 204 156.5

40.1 43.9 77.5 43.7 32.4

29.6 29.6 55.1 26.3 24.1

17.9 14.6 24.3 12.3 13.8

9.7 8.2 11.0 7.6 9.1

7.3 5.8 6.9 5.0 6.4

Sources: UNDP (1999a); OECD (1998b).

128 Table 5.5 Maternal mortality, per 100,000 births, 1970–95 Countries

1970

1980

1990

1995


28 54 N/A 33 321

18 13 20 11 699

1 9 10 5 N/A

2 4 8 4 N/A

Source: OECD (1998b).

Table 5.6 Overall health indicators – diseases Potential life years lost per 100,000 from selected pathologies (1992)

Standardised mortality (1993)

AIDS (1996)

Dental disease (1990)

Greece

27.3

7.2

24.8

2.1

Italy

27.0

7.1

91.8

4.9

Portugal

N/A

9.3

81.1

3.2

Spain

N/A

7.0

162.5

4.1

EU average

24.8

8.2

42.7

4.4

Consumption of tobacco (1992)

Consumption of alcohol (1990)

57% males 24% females 38% males 26% females 40% males 12% females 44% males 21% females 37.1% males 25.1% females

N/A 10.7 9.8 13.0 11.2

Sources: European Parliament (1998); European Commission (1999: Com 99–347).

Table 5.7

Rate of health systems according to the WHO’s World Health Report 2000 Attainment of goals General performance


On level of health

Overall health system performance

14 2 12 7

11 3 13 6

Health of the population

Fairness in financial contribution

Overall Health goal expenditure attainment

Level Distribution Level Distribution (DALE*)

7 6 29 5

Note * DALE ⫽ disability-adjusted life expectancy. Source: WHO (2000).

Responsiveness of the system

6 14 34 11

36 22–3 38 34

3–38 3–38 53–7 3–38

41 45–7 58–60 26–9

23 11 32 19

30 11 28 24


Because of these improvements, the health systems of the South European countries appear to have an unusually high rating in the recent (2000) World Health Report of the WHO (see Table 5.7).2 Regarding overall health system performance, Italy has the second best health system in the world, Spain the seventh, Greece and Portugal 14th and 12th respectively, which are above those of many other member states of the European Union. However, all of the Southern European countries score much worse regarding the responsiveness of the system, overall goal attainment, health expenditure and the fairness of financial contributions. This fact reflects the structural problems of the NHS. It is noteworthy, moreover, that significant regional differences in health status persist, especially between the main cities and the countryside (in Italy there is also an important gap between the North and the South). The population of northern Italy has a superior level of health care service provision reflecting a higher socio-economic level and better health status indicators (Fargion, 1997) (see Table 5.29).

General overview The institutional commitment to the national health system Commitment of the state to assuming responsibility for the health of the population was present long before the institutional establishment of the national health systems. The constitutions of all four countries provided for a right to health.3 The Portuguese Charter, in particular, explicitly stipulates that public obligation in this field would be met by the introduction of a universal, general and free national health service, with decentralised management in which the beneficiaries would take part. This right to health is not considered merely as setting a political objective, but rather is seen as a genuine subjective right, fully justifiable before the courts. This has been confirmed by the case law of the Supreme Courts on several occasions. For instance, the Italian Constitutional Court held that the right to health is a right applying both in public law and private relations (Corte Constitutionale of Italy, 23 May 1994, 218/1994; Toebes, 1999: 209 ff ). The position of the Greek Administrative Supreme Court was similar in its judgement 400/1986, which interpreted the related article 21 paragraph 3 of the Constitution. In a more recent judgement (Corte Constitutionale, 185/98) the Italian Constitutional Court reaffirmed the obligations of the state in the field of health protection. It declared the decree law no. 23 of 17 February 1998 (Urgent Dispositions in matters of clinical experimentation and other measures in sanitary matters) unconstitutional, on the grounds that it did not provide for the coverage of expenses for a cancer therapy of disputed scientific value (‘Di Bella’ therapy). This constitutional commitment is reflected in all the statutes that have established the NHS (the Italian law no. 833 of 1978,


the Greek Law 1397/1983, the Spanish Ley General de Sanidad 14/86, etc., Abel Smith, 1985), which enshrine the following basic objectives: ●

● ● ●

universal entitlement to health services for all citizens, and effective control over costs; public financing of the system; equality of services; a more balanced distribution of services among geographical regions.

Despite the general acceptance of the aforementioned principles, not enough attention was paid to the delegation of resources to fulfil the objectives, to the control of their use, or to a reliable study of the transaction costs involved in the different organisational solutions. Partisan and clientelistic politics, especially in Greece and Italy, have also played a negative role in the implementation of the reforms. The recent challenges of privatisation and more generally, the introduction of competitive mechanisms involving the private sector have not left these principles intact. Although universality remains the rule, cost containment practices have transferred part of the cost of the service to patients, through different quotas of co-payment. The Portuguese Constitution itself has been amended so that the principle of free services can be changed, more modestly, to ‘tending to be free of charge’. Health expenditure Health care expenditure per head in absolute terms is considerably lower than the European average, especially in Greece and Portugal. This is due to the much lower GDP of the Southern European countries compared to the EU average. Still, as shown in Tables 5.8–5.11 and Figure 5.1, expenditure as a share of Gross Domestic Product (GDP) has increased steadily since the 1960s. During the last ten years it has been stabilised at levels comparable to the EU average (approximately 6.5 per cent for 1997). This is despite the deviations in the related estimations of the OECD, WHO and EU (Tables 5.8–5.10). Italy is a high spender even in per capita prices: its figure for health care expenditure per head in US$ PPS for 1994 was $1,561, higher than the European average of $1,419 (Saltman and Figueras, 1997: 31). Table 5.8 Total health expenditure as a percentage of GDP, 1985–97 (OECD estimates) 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1997 Italy Greece Portugal Spain Average OECD

7.1 4.0 6.3 5.7 7.1

7.0 4.4 6.9 5.6 7.2

7.4 4.3 6.7 5.7 7.3

7.6 4.1 7.1 6.3 7.4

7.7 4.1 6.6 6.5 7.4

8.1 4.2 6.5 6.9 7.5

Sources: OECD (1999c); OECD (1998c). No data for 1996.

8.4 4.2 7.2 7.1 7.8

8.5 4.5 7.4 7.2 8.0

8.6 5.0 7.7 7.3 8.1

8.4 5.5 7.8 7.3 8.0

7.7 5.8 8.2 7.6 8.0

7.6 8.6 7.9 7.4 N/A

131 Table 5.9 Expenditure for sickness/health care, as percentage of GDP (EU estimates)


1980

1985

1990

1991

1992

1993

1994

1995

N/A 5.4 5.0 N/A N/A

N/A 5.0 5.2 N/A N/A

5.4 5.6 6.0 4.1 N/A

5.1 6.0 6.1 4.7 N/A

5.4 6.4 6.1 5.6 N/A

5.6 6.6 5.8 6.2 7.6

5.7 6.4 5.5 6.5 7.4

5.7 6.2 5.5 6.0 7.5

Greece

Italy

Portugal

Spain

8.0 65.8

9.3 57.1

8.2 57.5

8.0 70.6

34.2

42.9

42.5

29.4

31.7

41.8

40.9

20.4

64.8

100

100

41.0

35.2

N/A

N/A

59.0

12.6

10.5

10.8

13.3

905 287 964 634 306

1,855 774 1,824 1,042 762

845 345 1,060 609 433

1,017 218 1,211 855 247

Source: Eurostat (2000b: Table C 1.3.1, 56).

Table 5.10 Total health expenditure (WHO’s estimates)

Health expenditure (%) Total expenditure on health as % of GDP Public expenditure as % of total expenditure on health Private expenditure as % of total health expenditure Out-of-pocket expenditure as % of total expenditure on health Tax-funded and other public expenditure as % of public expenditure on health Social security expenditure as % of public expenditure on health Public expenditure on health as % of total public expenditure Per capita health expenditure (US$) Total expenditure at official exchange rate Out-of-pocket expenditure at official exchange rate Total expenditure in international dollars Public expenditure in international dollars Out-of-pocket expenditure in international dollars Source: WHO (2000).

Table 5.11 Health spending, as a share of GDP 1960–96 Country

1960

1970

1980

1990

1995

1996

Greece Italy Portugal Spain Average OECD

2.9 3.6 N/A 1.5 3.9

4.0 5.2 2.8 3.7 4.9

4.3 7.0 5.8 5.6 6.6

5.2 8.1 6.5 6.9 7.1

5.8 7.8 8.2 7.3 7.9

4.7 7.7 8.3 7.4 7.7

Sources: OECD (1998b,c).

132 Southern European Welfare States 10

8 6

4

2

0 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1997 Italy

Greece

Portugal

Spain

Figure 5.1 Total health expenditure as a percentage of GDP, 1985–97 (OECD estimates) Sources: OECD (1998c; 1999c).

Moreover, it seems that some of the estimates (specifically the OECD data) underestimate public, and especially private, health care expenditure in Greece. (The calculations of Table 5.12, according to which the private health expenditure represents only 17 per cent of total expenditure are not very convincing – cf. the more plausible estimates of the WHO in Table 5.10.) According to the new system of evaluation of social expenditure, in conformity to the revised, unified data of the ESSPROS (European System of Social Protection Statistics) (ESYE, 2000; Tinios, 2000: 24), for 1993 the undervalue of health expenditure was of the order of 6.2 per cent, as actual expenditure was 756 billion drachmas higher than that initially estimated. Although all four countries have ageing populations, the impact of ageing on health care expenditure is a complex issue, the analysis of which is beyond the scope of this book. There is no substantial evidence that this as yet has had any important implications, although in the future it is likely to increase the economic burden on the NHS. However, technology innovation in health care has a tremendous potential to reduce the economic impact in the long run. Institutional structure, funding, organisation and services It is noteworthy that the NHS are not completely emancipated from the social insurance principle (Table 5.10). Even in Portugal, where the funding of the NHS by taxation has been established since 1976, some services are still provided within the framework of social insurance. Regarding the


financing of the system, once again there is a separation of the Southern European member states into two discernible clusters, the first comprising Greece and Italy and the latter the Iberian countries. In the first group social insurance still plays a considerable role, funding about 40 per cent of the total expenses of the system, whereas in the second group it represents only 10–20 per cent of the total (Kyriopoulos and Niakas, 1993; Economou, 1999). More specifically, social insurance funds in Greece contribute 35 per cent and in Italy over 42 per cent of NHS funds. In the latter country, the share covered by contributions, according to estimates, increased to 47 per cent in 1994 (Granaglia, 1997). The related figures for Portugal were as low as 13.7 per cent. Similarly in Spain, whereas in 1989 social contributions financed 70.1 per cent of total health expenses, and the contribution of the state, via taxes, represented 27.2 per cent, in 1997 financing from taxes reached 91.9 per cent of total expenses (data obtained from the Ministry of Health and Consumer Affairs). Regarding the institutional matrix, there are considerable differences from one country to another. In all four countries, the central responsibility for setting the objectives and priorities of the NHS, the basic packages and the minimum standards of services are exercised by the Ministry of Health (in Greece with the additional responsibility for social assistance and in Spain for consumer affairs). This is done with the help of consultative organs of scientific and representative composition, which sometimes also carry out the functions of ensuring the participation of users. Nevertheless, with regard to the degree of decentralisation, as well as the financing and the provision of services, there is considerable divergence. The Spanish and Italian systems are characterised by intense regional autonomy and a broad devolution of responsibilities to the regional level. In Greece and in Portugal, on the other hand, the system remains highly centralised, although the Portuguese law of 1993 and the on-going Greek reform of 2000 provide for a greater degree of decentralisation. In the latter countries, salaried staff predominate among doctors working in ambulatory care, which is unique in the European Union. In Spain, primary care is ensured mainly within the public sector, through a network of health centres and family doctors, which is not the case elsewhere in Southern Europe, at least to the same degree. However, in all four countries, the public sector dominates in the provision of hospital services. Moreover, one could identify some common trends, in line with the general European context. Because of the deficiencies of the public health services, there has been a significant growth of private sector activity, through private health insurance and direct payments. Furthermore, the reforms in all countries aiming at cost containment of the NHS resulted in the introduction of different methods of co-payment by the patients for public health services. In Portugal, a law of 1993 even provides for the public payment of private health insurance, whereas households have financed more than 45 per cent

134 Southern European Welfare States Table 5.12 Public share in total health spending, 1960–97 (OECD estimates)

Greece Italy Portugal Spain Total OECD

1960

1970

1980

1990

1995

1996

64.2 83.1 N/A 58.7 63.9

53.4 86.9 59.0 65.4 71.3

82.2 80.5 64.3 79.9 75.8

82.3 78.1 65.5 78.7 75.8

75.8 69.5 60.5 78.7 75.4

82.9 69.0 59.8 78.7 76.8

Sources: OECD (1998b,c).

of the total health expenditure, which is the highest value in all OECD countries (OECD, 1998b). On the other hand, in Spain the cost assumed by the family budget represents only 4.5 per cent of national private consumption, almost half of the European average of 8 per cent (see Table 5.10). In general, the private share of total health spending is considerable (see Tables 5.10 and 5.12) and somehow underestimated in the statistics, mostly because of huge ‘hidden payments’, especially in Greece. The OECD estimate for private health expenditure is 17.1 per cent, whereas more plausible national estimates raise the figure to 35 per cent. Portugal has, in any case, the lowest share of public health not only in the South but among all member states of the EU with 59.8 per cent in 1996 (see Table 5.12). The main supplementary system of finance in Greece, Italy and Spain is private voluntary insurance and in Portugal direct payments. In Greece, for example, in the period 1982–90, private health insurance displayed an average annual increase of 40 per cent (Economou, 1999: 496; Robolis, 1990). Regarding disability expenditure, due to a lack of a universal definition of the term, it is not easy to find comparable statistics.4 However, it appears that the related expenditure and the percentage of the beneficiaries of disability programmes as a percentage of the population is higher than the OECD average. This fact demonstrates a structural distortion of the overall social protection system (see Tables 5.13 and 5.14). In Greece and Italy in particular, disability pensions have been provided even to healthy recipients, as a substitute for the lack of other social minimum income protection schemes or within the framework of clientelistic politics. Regarding human resources, the number of practising physicians is above the EU average in all countries but there is a considerable shortage of humanpower for all areas of nursing care. In Greece and Italy in particular, the number of nurses is lower than the number of doctors, a fact that demonstrates poor planning of resources and generates multiple inefficiencies at the level of in-patient care. Regarding the overall structure of health benefits, there are neither considerable differences between one country and another nor any essential deviation from the European average (see Figure 5.2). The distribution of

National Health Systems 135 Table 5.13 Expenditure for disability, as percentage of GDP


1980

1985 1990

1991

1992

1993

1994

1995

N/A 1.1 1.4 N/A N/A

N/A 1.5 1.7 N/A N/A

1.6 1.6 1.7 2.3 N/A

1.5 1.6 1.7 2.4 N/A

1.5 1.7 1.8 2.5 2.3

1.4 1.7 1.8 2.7 2.3

1.4 1.6 1.7 2.2 2.3

1.8 1.5 1.8 2.3 N/A

1996 1997 1.4 1.7 1.7 2.2 2.3

1.4 1.6 1.6 2.5 2.3

Source: Eurostat (2000b: Table C 1.3.2, 56).

Table 5.14 Recipients of main disability programmes as a percentage of the population, 1975–95 Country

Greece (IKA) Italy (INPS) Portugal (IGFSS) Spain

1975 1980

1985

1990

Age 25–54 0.8 0.8

1995

1975

1980

1985

1990 1995

0.7

2.8

Age 55–64 3.4 4.4 4.6

3.8

N/A

3.5

0.7

0.7

N/A

N/A

N/A

N/A

0.2

N/A

2.1

2.9

3.3

3.0

2.5

8.6

14.1

18.2

19.4

17.8

N/A

1.5

1.9

1.4

1.4

N/A

11.5

13.4

10.4

9.9

N/A

N/A

Working age Greece (IKA) Italy (INPS) Protugal (IGFSS) Spain

0.9

0.9

1.2

1.4

1.1

N/A

N/A

N/A

N/A

1.6

2.5

3.7

4.9

5.0

4.4

N/A

2.6

3.3

2.5

2.4

Source: (OECD, 1998c: Table 2.9). Coverage refers to the year 1989 for Greece and Spain, 1993 for Italy and 1990 for Portugal.

expenditure is somewhat weighted towards ambulatory care, with a relatively low share spent on in-patient care, with the exception of Italy (see Tables 5.15 and 5.16). There is also a gradual but discernible shift in emphasis from cash benefits to benefits in kind, especially in Greece. Means-tested benefits represent a considerable percentage of total expenses only in Spain, where the poor covered under INSALUD (Instituto Nacional de la Salud) are subject to a means test. Pharmaceutical expenditure is relatively higher than the European average (Table 5.17), especially as a percentage of total health cost, which is two

136

Greece Italy Portugal Spain 0%

20%

40%

60%

80%

100%

Cash benefits

Benefits in kind: out-patient care

Benefits in kind: in-patient care

Means-tested benefits

Figure 5.2 Health-sickness benefits by category Source: Eurostat (2000b: Tables C.2.8.3, C.2.5.1, C.2.4.1, C.12.1).

Table 5.15 Main components of health care expenditures as percentage of total, 1970–90 1970

Greece Italy Portugal Spain Total EU Total OECD

1980

Pharmaceutic

In-patient

Ambulatory

Pharmaceutic

In-patient

Ambulatory

43.3 14.5 N/A N/A 19.3 17.5

38.7 36.2 N/A N/A 32.1 32.2

46.4 47.8 N/A N/A 41.9 42.9

34.8 13.7 19.9 21.0 14.7 13.6

45.4 27.5 N/A 12.6 31.0 28.8

48.9 46.7 28.7 54.1 44.3 47.7

1990 Pharmaceutic Greece Italy Portugal Spain Total EU Total OECD

24.4 18.3 24.9 17.8 14.9 13.9

1995

In-patient

Ambulatory

N/A 29.1 N/A 10.8 30.7 29.1

58.4 45.3 31.0 44.1 41.5 44.7

Pharmaceutic In-patient 19.3 17.2 25.2 N/A 15.7 14.4

Ambulatory

N/A 30.0 N/A N/A 33.7 33.1

Note: Coverage refers to the year 1989 for Greece and Spain, 1993 for Italy and 1990 for Portugal. Source: OECD (1998c).

N/A 47.1 N/A N/A 41.7 44.0

National Health Systems 137 Table 5.16 Comparative statistical data of health care in Southern Europe Country

Greece Italy Portugal Spain EU average

In-patient beds per 10,000 habitants (1994)

In-patient beds per 1,000 in acute care (1995)

49.7 65.4 41.1 40.2 N/A

3.9 (1992) 5.1 3.6 3.2 (1994) 4.3

In-patient bed days per head in acute care (1995)

Average length of stay in acute care in days (1995)

N/A 1.3 0.8 0.8 1.25

Admission Number of rate in care cases as percentage treated of the per bed population (1995) (1993)

N/A 8.8 7.9 8.8 7.6

N/A 15.8 11.1 10.5 (1994) 17.3

N/A 26.4 32.2 31.7 31.3

Sources: European Parliament (1998: Table 5); OECD (1997c), European Commission (1999: Com 99–347); for 1994, data obtained from the Internet site of the Spanish Ministry of Health, file Salu98in.pdf, (1998).

Table 5.17 Pharmaceutical expenditure in Southern Europe as percentage of GDP, 1975–93 Country

Greece Spain Italy

Year 1975

1993

0.10 1.47 1.14

1.70 0.76 0.93

Source: Mardas (1998).

to three points over the European average depending on the year, although the prices of drugs are among the lowest in Europe. For example, according to OECD (1993) data, the public cost of pharmaceuticals in Spain represented 14.1 per cent of total health cost, whereas for the United Kingdom, Belgium and France the related figures were 9.7 per cent, 7.6 per cent and 10.3 per cent respectively. Recent reforms in all countries introducing positive and negative lists of drugs5 related to medical and economic criteria have attempted to contain the related cost with ambivalent results.

Subjective evaluation of the national health systems As shown in Tables 5.19 and 5.20 as well as in Figure 5.3, public satisfaction with the health care system is very low in all Southern countries and in sharp contrast with the respective, and much more positive subjective evaluation in the other European countries. Moreover, this dissatisfaction appears to be permanent and not conjunctural, reflecting structural deficiencies of


the system. Despite the on-going reforms of 1992–6, the subjective evaluation of the system has not improved, with the exception of Spain. Actually, in the case of Portugal it has deteriorated dramatically (see Tables 5.18 and 5.19). The better score of Spain seems to confirm the relatively more successful NHS performance of this country. The Spanish opinion polls consistently give the NHS the highest rating among Spanish public services. Paradoxically, in Greece and in Portugal, where the NHS have the most negative comments on behalf of the general public, there is a comparatively better evaluation of the equity of the system. A higher percentage of people in these countries than in Spain and Italy have responded negatively to the question ‘Are there people who do not have access to necessary health care?’ Probably this answer reflects not only people’s expectations of institutional health provision, but also of the related assistance given by informal networks, such as family, friends, etc.

Table 5.18 Subjective evaluation of national health systems

Very or fairly satisfied with NHS Fairly or very dissatisfied with NHS NHS runs quite well/some minor changes needed Fundamental changes/ complete rebuild of NHS needed

Greece (%)

Spain (%)

Italy (%)

Portugal (%)

EU15 (%)

16.9

31.9

15.5

19.1

41.5

53.9

28.6

59.4

59.3

28.3

29.3

44.5

21.9

23.0

54.1

69.2

47.5

76.9

70.1

41.4

Source: Mossialos (1997: 111, 113).

Table 5.19 Evolution of subjective evaluation of national health systems, 1992–6 Very or fairly satisfied

Greece Italy Portugal Spain EU15

Fairly or very dissatisfied

1992

1996

1992

1996

29.30 35.20 44.50 39.78 73.51

29.3 21.9 23.0 44.5 54.1

73.1 64.8 55.4 60.2 26.5

69.2 76.9 70.1 47.5 41.4

Sources: For 1992: Eurobarometer (Survey 37.1, 1992: Question Q. 24); for 1996: Mossialos (1997: 111, 113).

National Health Systems 139 Satisfaction from health systems as percentage of population EU15 Portugal Italy Spain Greece 0%

20%

40%

Very or fairly satisfied

60%

80%

100%

Fairly or very dissatisfied

Figure 5.3 Subjective evaluation of national health systems in the EU and the European South in 1996 Source: Mossialos (1997: 111, 113).

Table 5.20 Subjective evaluation of health care deprivation Answer to the question: ‘In your opinion, are there people in our country who do not have access to necessary health care?’ (as percentage)

Greece Italy Portugal Spain EU15

Yes

No

81.72 93.00 78.85 95.44 71.03

18.28 7.00 21.15 4.56 28.97

Source: Eurobarometer (Survey 40, 1993: Question Q. 78).

The national health systems of the four Southern European countries Greece Overview The Greek health care system is based on a system of compulsory social insurance. In 1983, the socialist government made a considerable step towards a non-contributory universal social security scheme, by establishing the Greek National Health System (law 1397/83 for the introduction of ‘ESY’, E␪␯␫␬ó ⌺´␷ ␴␶␩␮␣ Y␥␧´␫␣␵). However, health care is still in large part financed by income-related contributions to insurance (pension and sickness benefit) funds (Yfantopoulos, 1990; Kyriopoulos and Niakas, 1993). Still, the public hospitals are mainly financed from the state budget (70 per cent of hospital revenues) and to a smaller extent by the insurance funds (30 per cent), which contract in-patient services for their members.


ESY hospitals are financed on the basis of per diem reimbursement rates that increased substantially in the 1990s. The staff working in public ESY and non-ESY hospitals are salaried and public functionaries are not allowed to practise privately (unless they also have an academic capacity). The national scheme does not provide for co-payments for in-patient hospital care in public hospitals but there is a steady (although heavily penalised) practice of ‘unofficial’ payments (fakellakia) to doctors. This corrupt practice, despite being a permanent flaw of the system, is also a means through which many patients and their families can exercise choice in the allocation of services and through which doctors receive compensation for low levels of pay (Dent, 1998; Abel Smith, 1985). The overall system has been heavily centralised (especially before the reform of 2001) and marked by excessive statism (Dent, 1998). The Ministry of Health and Welfare regulates the provision and finance of the NHS, with the help of a consultative organ, the Central Health Council (KESY), which is composed of representatives of the medical profession and consumers. Prices of services are set by the Ministry of Health and have to be approved by the Ministry of Labour and Social Insurance, which is the ministry supervising the funds. Until the recent law 2889/2001, the hospitals of ESY have had autonomous legal persona and have been run by a board of seven members, of whom the president, vice president and one member had been appointed by the Minister of Health, the others being representatives of medical personnel and local society. The lack of specialisation of this type of administration has led to institutional changes in the direction of a more managerial and flexible system. The reform, however, is not yet completed (see p. 149). Almost the whole population, except undocumented migrants, is covered by a number of social insurance funds simultaneously providing pensions and sickness benefits. Membership is compulsory for employees and their dependants and is based on occupation. In fact three of them cover over three-fifths of the population (see Table 5.21). These are: IKA (the Institute for Social Insurance), which covers all blue-collar and the majority of whitecollar workers in the private sector; OGA (the Organisation of Agricultural Insurance) which primarily covers the rural population; and OAEE, a new fund covering all the self-employed (with the exception of professions such as lawyers, doctors and engineers). The latter has merged a number of smaller, occupation-based funds, in an on-going effort at rationalisation. Although the legislation provided for decentralisation through the provision of 176 ESY rural health centres to deliver primary health care services to 25 per cent of the population, the actual implementation of the scheme has not been satisfactory. This is mainly due to the lack of medical and paramedical personnel wishing to work in these remote areas (see Table 5.22). It is one of the causes of the principal problem of the Greek health care system, which is the unequal geographical access to health services and inefficiency in service provision, especially in rural areas. Other reasons for this lack of homogeneity of the NHS are the physical fragmentation of the

National Health Systems 141 Table 5.21 The activity of major insurance funds in health service provision, 1996 Insurance funds

Insured and other persons entitled to health care benefits

Days of care

Rate of days of care to number of recipients

IKA OGA Other insurance funds Total

5,457,855 2,465,000 2,528,164

5,472,541 3,479,947 4,297,745

1 1.41 1.7

10,454,019

12,250,233

1.26

Source: Solomos (1999: Table 20, 167).

Table 5.22 Number of insured persons per doctor in major regions, 1998 East Attica Macedonia and Thrace

North Aegean

Western Greece

771

585

Western Epirus Macedonia

Ionian Islands

591

714

818

677

Central Macedonia

Crete

South Aegean

Peloponnesos

Sterea Hellas

National average

909

1074

672

844

719

779

867

Thessaly

682

Source: Greek National Statistic Service (1999).

country (hundreds of small islands, isolated mountain villages) and the overall economic development of the country around two large urban centres, Athens and Salonica. Thirteen regions and 52 districts make up the sub-structure of the NHS. Seven of the 13 regions have at least one major specialised ESY hospital. Also important is the role of the university clinics that are incorporated into ESY. In addition to Athens and Salonica, such clinics exist in Patras, Crete, Epirus, Thessalia and Thrace. Four new peripheral hospitals will be inaugurated in the immediate future. Other than Athens and Salonica, the most privileged regions are Crete, Epirus and western Greece, due to the existence of the health complexes of the university hospitals. There are also a number of public hospitals not belonging to the NHS. These are mainly military hospitals and IKA hospitals. However, there is an on-going reform project that will integrate all public hospitals (with the exception of military ones) into a Unified Public System of Health. The hospitals will cease to be autonomous legal entities and will be turned into independent units of the Peripheral System of Health (PESY) (see p. 149). According to statutory provisions, all the needs of the population of each region should be met within that region and primary health care for the rural population is to be provided by the health centres. In reality,


however, patients are free to move around within the system without any restrictions or geographical commitments. This freedom, somehow paradoxically, is one of the determinant factors perpetuating the peripheral inequalities in the domain of secondary care, as it results inevitably in people choosing to go to the most renowned hospitals of the two aforementioned large urban centres, Athens and Salonica (Niakas, 1993). In Greece, the private sector is more important than in the rest of Southern Europe and is growing fast. Whereas public expenditure on health services represented 5.2 per cent of GDP in 1991, the latest family expenditure survey showed that total spending (including private payments) amounts to 8 per cent of the GDP. In other words, 42 per cent of health expenditure was financed from private payments, which is the highest proportion of private financing among all the member states (Abel Smith, 1985). Patients participate in the cost by paying privately or through voluntary private insurance. The role of the latter is becoming more and more important, especially since a related legislative reform in 1993 (law 2170/93). The initial law establishing the NHS tried to balance the importance of private services, without great success. On the contrary, since the early 1990s, emphasis upon reform has shifted towards a more managerial and market-oriented approach, which favours the development of private health services. Private hospitals have contracts with the insurance funds and are reimbursed on a per diem basis with additional fees for certain diagnostic and curative procedures. Furthermore, especially during the short return to power of the conservatives in the 1990s, user charges have been reintroduced in some sectors and public expenditure as a percentage of the total health expenses fell from 82.2 per cent in 1980 to 77 per cent in 1990 (European Commission, 1993: 99). We should note that the frontiers between the public and the private sector are often blurred, due to the existence of a parallel, informal economy that spans both sectors. For instance, according to a research study of the Health University of Athens, 50 per cent of the patients in the NHS paid some extra money to the medical staff in order to have better care, or for small ‘favours’, such as for instance, being short-listed for an operation. Services The range of services (see Table 5.23) provided varies substantially from fund to fund, with IKA offering the most comprehensive package including dental services and coverage for optical devices. All insured persons (and the survivors and the members of their families) are entitled to medical care, provided they have worked at least 50 days during the previous year or in the last 15 months, excluding the last three months. Non-documented migrants (see Chapter 6) are entitled only to emergency aid. Medical examinations are carried out by doctors of the NHS, the funds, medical centres, by family physicians, by doctors in rural areas and doctors connected with

Table 5.23 Analysis of social benefits for sickness/health/disability care – millions, national currency

Total health benefits Disability benefits Health benefits analysis A – Non-means-tested A-1 Cash benefits Periodic Paid sick leave Other cash periodic benefits Lump sum A-2 Benefits in kind In-patient care Direct provision Reimbursement Out-patient care Provision of pharmaceutical products Other direct provision Reimbursement of pharmaceutical products B – Means-tested Cash benefits Benefits in kind

1990

1991

1992

1993

1994

1995

1996

1997

710,660 242,705

821,296 259,019

1,010,497 274,683

1,184,969 308,083

1,358,935 345,047

1,525,293 382,525

1,657,089 416,715

1,877,261 455,543

710,504 124,026 103,538 101,569 1,969 20,488 586,479 320,597 292,439 28,158 250,772 4,069

821,103 142,330 119,172 116,596 2,575 23,158 678,773 375,436 334,137 41,299 277,246 5,587

1,010,180 155,468 130,745 128,305 2,439 24,723 854,713 450,773 393,860 56,913 358,255 6,493

1,184,572 172,704 144,755 142,083 2,672 27,949 1,011,868 501,929 432,021 69,908 466,820 9,170

1,358,335 192,194 160,452 156,425 4,027 31,743 1,166,141 564,250 483,835 80,415 541,617 9,411

1,524,786 206,114 173,469 171,851 1,618 32,645 1,318,673 633,031 565,672 67,359 610,593 9,968

1,656,339 213,817 176,532 176,301 230 37,285 1,442,523 668,234 600,877 67,357 688,217 11,767

1,876,471 231,618 191,318 190,712 607 40,299 1,644,853 775,399 708,326 67,072 771,703 13,732

130,271 98,498

129,843 119,897

155,726 164,392

203,778 211,033

223,168 258,601

248,244 292,504

271,051 338,321

306,842 378,284

156 0 156

193 0 193

317 0 317

397 0 397

600 0 600

506 0 506

750 0 750

790 0 790

Source: Eurostat (2000b: Tables C 2.4.1, C 2.4.2).

143


them. In the case of fees to be paid directly to private doctors for visits and medicines in case of emergency, the related amounts are reimbursed, according to predetermined official rates. The application for a refund must be submitted by the prescribed deadline. Ambulatory care is provided by hospital out-patient departments, through doctors of IKA hospitals and private practitioners under contract to the insurance funds on a fee-for-service basis. Diagnostic centres under contract with insurance funds for services are reimbursed through fee-for-service arrangements. IKA plays a dominant role in the provision of primary care in urban areas. It operates nearly 200 urban polyclinics and clinics (see Table 5.24). In urban areas, primary care services are administered by polyclinics that employ part-time, salaried, specialist doctors. Provincial clinics and the 176 NHS rural health centres that mainly serve members of OGA deliver primary care in rural areas. Private practitioners and institutions provide the remainder of the primary care service. Recently some efforts have been made to provide consistent preventive medical care, through the establishment of various centres of cytology, family planning, blood donation; services for persons with special needs, vaccination and so on. All dental care is covered, including orthodontic therapy for children up to the age of 13, as well as dental prosthetics. These services are provided by the dental surgeries of the NHS and the insurance funds, to public orthodontic and stomatological centres as well as by dentists connected with them. One of the most striking characteristics of the Greek health care delivery system is the strong emphasis put on hospital care, which also covers part of the primary health care services (see Table 5.25). The public hospital sector is made up of two categories of hospitals (all of them entities with legal persona). NHS public hospitals include 96 district and 23 regional hospitals constituting 32 per cent of the total number of hospitals but 63.5 per cent of all hospital beds. There are 27 public hospitals which operate under the auspices of the Ministry of Defence (13 military hospitals); the Ministry of Justice (for prisoners); the Ministry of Education (three University hospitals); and IKA. These constitute 6 per cent of the total number of hospitals and 7.7 per cent of all hospital beds. Table 5.24 IKA hospitals, 1994–7

Beds Patients Days of hospitalisation Average of days of hospitalisation Source: Solomos (1999: 310).

1994

1995

1996

1997

– 28,941 222,738 7.28

– 31,032 230,018 6.94

832 32,527 227,714 6.58

822 32,885 217,458 6.39

National Health Systems 145 Table 5.25 Hospital activity by type, 1993 Speciality of hospitals

General Combined Cancer VD and skin diseases Cardiological Infectious diseases and leprosy Obstetrical – gynaecological Neuro-psychiatric Orthopaedical Ophthalmological Pathological Children’s diseases Tubercular Surgical Ear–nose–throat diseases Total

Days of treatment

7,299,422 19,854 376,049 33,076 12,588 16,388 458,698 3,156,720 34,305 15,137 88,215 354,999 21,514 38,007 10,486 12,616,515

Patients discharged

Per cent coverage of beds

1,147,555 12,367 32,605 2,929 573 2,603 87,793 24,619 18,545 3,863 2,277 78,082 20,895 3,637 2,853 1,441,196

64 51 74 43 84 45 49 91 86 20 60 56 71 30 19 66

Source: ESYE (2000).

The private sector is also made up of two categories of institutions – hospitals belonging to NGOs or other non-profit organisations and forprofit hospitals. These account in total for 62 per cent of the total number of hospitals but for only 28.8 per cent of hospital beds. (Until the late 1970s, private sector provision accounted for more than 50 per cent of hospital beds [Symeonidou, 1997].) The number of hospital beds, at five per 1,000 population (1993 data) remains relatively low, compared to the EU average of 8.1 per 1,000 (see Table 5.28). The admission rates per 1,000 population are improving. They amounted to 13.1 per year in 1991, which was also comparatively low in comparison to the European average of 16.2 per cent (Table 5.27), but was approaching 15 per cent in the late 1990s. On the other hand, in Greece the rate of practising physicians per 10,000 population at 38.8 (1994) is well above the EU average of 28.1 (see Table 5.28). The percentage of physicians as a proportion of total health sector employment was 30.7 per cent, which was twice the EU average in 1992 (15.1 per cent). Greece and Italy are the only countries in the EU where there are more doctors than nurses in the public hospitals. This irrational planning of humanpower resources has other consequences, one of the most important being the very small number of whom are general practitioners. (Specialisation in general medicine was officially introduced in Greece in 1964.) This role is played either by pathologists or by doctors without speciality.

146 Southern European Welfare States Table 5.26 Inhabitants per doctor and bed, and average nursing time

1986 1987 1988 1989 1990 1991 1992 1993

Inhabitants per doctor

Inhabitants per bed

Average nursing time per patient (in days)

326 300 311 303 295 276 266 259

188 193 194 195 197 200 201 199

8 8 8 8 8 7 7 7


Table 5.27 Efficiency of hospitals

Admission rates per 1,000 Average days of hospital treatment Per cent coverage of beds

1990

1991

1992

1993

1994

1995

1996

12.8 9.9

13.1 9.9

13.4 9.8

13.9 9.4

14.2 9.1

14.5 8.6

14.7 8.4

68

71

70

71

70

71

69

Source: Data obtained from the Greek Ministry of Health.

Access to out-patient departments of public hospitals is universal. The noninsured population, which include for example, undocumented migrants, also has the right to hospitalisation, in case of emergency. Hospital care covers all hospitalisation expenses in public hospitals or private clinics under contract with the state or the insurance funds, as well as clinics for chronic illnesses and for children with special needs. However, the quality of the ‘hotel facilities’ within the hospitals (for example, private rooms, etc.) is related to the job of the patient. In cases of illnesses that cannot be treated or diagnosed in Greece due to insufficient scientific means or appropriately specialised doctors, the funds cover the expenses for treatment abroad. Cash benefits There are a variety of cash benefits, which vary considerably from one insurance fund to another, with regard to both the conditions and the generosity of benefits. The conditions of the IKA benefits, in the most representative package, are as follows: the maternity grant is a lump sum granted in cases of normal confinement or premature labour or in cases of miscarriage after six months of pregnancy to all insured women (employed or pensioners). It is also granted to the wives of insured persons, who are considered their dependants and have the right to sickness benefits from IKA. There are also allowances granted to the insured persons in case of

National Health Systems 147 Table 5.28 Hospitals, beds, doctors and nursing personnel, by speciality, 1993 Speciality

Hospitals

General 176 Combined 24 Cancer 4 VD and skin diseases 2 Cardiological 2 Infectious diseases and leprosy 1 Obstetrical – gynaecological 60 Neuro-psychiatric 48 Orthopaedical 8 Ophthalmological 8 Pathological 8 Children’s diseases 6 Tubercular 2 Surgical 9 Ear-nose-throat diseases 10 Total 368

Beds

Doctors

Midwives

Nurses

31,273 1,056 1,385 213 41 100 2,549 10,761 1,093 205 401 1,732 828 352 155 52,144

13,952 142 721 151 2 66 910 744 396 51 66 785 397 94 15 18,492

1,411 26 20 – – – 438 13 – 1 – 4 – 1 2 1,916

25,915 229 1,195 113 6 63 848 3,253 – 86 106 1,509 707 257 27 34,314


sickness, pregnancy, confinement, etc., but only if they meet the entitlement terms (they must have completed the insurance period required for being granted the benefit). All insured persons and working pensioners are entitled to a sickness allowance due to common illnesses if they are determined to be temporarily unable to work by IKA physicians. The IKA physician can draw up a certificate of incapacity for work for up to 15 days every year. If a certificate is required for over 15 days, it is drawn up by a Health Committee. The insured person is entitled to a sickness allowance up to: 1. 182 days for the same or different illness if she/he has completed 100 insured working days during the year preceding the illness or during the last 15 months excluding the last three months. Construction and building workers must have completed 80 days over the previous year or the previous 15 months. However, in this case the necessary requirement is to have completed 200 days in total, all of which must be in construction over the last two years or in the last 30 months excluding the last three in the latter case. 2. 360 days for the same illness if he/she has completed 300 working days during the last two years or the last 30 months, excluding the days worked in the last three months. 3. 720 days for the same illness if he/she has completed the following requirements: a. 1,500 working days, provided that 600 of them have been completed within the five years preceding the date of declaration of illness.


b. 4,050 days, increasing from 1,192 by 150 for each year and up to 4,500 or 10,000 days in total, or 300 days for those up to 21 years of age increasing by 120 for each year after the 21st year of age and up to 54 years for which 4,200 days are required. However, 300 of these must have been completed within the five years preceding the date of declaration of illness. If incapacity for work is due to sickness or injury caused by an accident at work and during work the allowance is granted, provided that the injured person was insured on the day of the accident. If the sickness or injury is due to an accident outside the workplace the insured person must have completed half the conditions required for the allowance of a common illness. The declaration of an accident must take place within five working days from the date following the accident. A death grant is paid following the death of an insured person, or an old age, invalidity or survivors’ pensioner, provided that he/she had completed 100 working days before the year of his/her death. Pharmaceutical care There is a list of pharmaceutical products which are totally or partially (on average 25 per cent) reimbursed by the insurance funds. The prices of pharmaceuticals are set by the Ministry of Trade based on the lowest reference price in the EU. Medicines for chronic diseases, maternity, work-related accidents and the complications of Mediterranean anaemia are excluded from co-payment. Problems and prospects The introduction of ESY has dramatically improved the health resources of the country. In the short period from 1981–7, medical and paramedical personnel increased by 61 per cent and the public health investments by 300 per cent (Economou, 1999: 494). However, problems of lack of human resources, inefficient services, unequal regional provision of health, and the fragmentation of health insurance remain the main problems of the Greek NHS. Furthermore, a very negative subjective evaluation of the system by its users remains, especially because of the deficiencies in its ‘every day’ services (the ‘hotel services’ of the Athenian hospitals are one of most prominent examples of this category). Recent empirical studies (Athanassopoulos, Gounaris and Sissouras, 1999) confirmed the well-known problem of the Greek health system concerning the oversupply of health services by urban hospitals, which generally have much greater resources than the corresponding rural hospitals. The reforms in 1994, 1995, 1996 and 2001 have focused on the improvement of efficiency in the provision and financing of services through the introduction of managerial techniques.


The problem is that these reforms, even when enshrined in statutory legislation, have seldom actually been fully implemented. It seems that the country has missed the two reform thrusts that took place at European level. In the 1980s these aimed to introduce cost containment methods and in the 1990s to improve efficiency and internal competitiveness (Sissouras, 2000). To summarise, the basic weaknesses of the Greek NHS are the unequal allocation of human and material resources and the consequent lack of equity and the important problems of quality of institutional care at the ‘every day’ level. The increase in demand for better primary and institutional care should oblige legislators to pay special attention to the regulation of private initiatives and the improvement of state-run institutions. The provision of primary health care, through an institutional network distinct from the hospitals is still incomplete. The latest reform, introduced by the law 2889/2001 and not fully implemented yet, aims at reconstructing the NHS on a more decentralised basis. In each one of the 13 regions into which the country is divided, a new organisation, called the Peripheral System of Health (PESY) will be founded. The PESYs will have autonomous legal persona and competencies for the implementation, planning, financing and monitoring of health care in the regions, both at the level of primary and secondary care. They will supervise and co-ordinate the medical personnel of their area. The hospitals cease to have legal persona and are becoming decentralised units of the PESYs. In addition, a new Organisation for the Administration of Health Resources (ODIPY) will be founded, aiming at the rationalisation of the expenses and the optimisation of the resources’ use. ODIPY, under the supervision of the Ministries of Health, Labour and Social Insurance, will administer the health resources of the major insurance funds and will gradually form and apply a uniform regulation of health services, on the basis of the best existing package. Special emphasis will be placed on primary health care, through the establishment of a personal doctor, paid per capita and used on a referral system. According to the law, the university professors, employed at the university clinics of ESY, will no longer be allowed to practise privately, a prohibition that has triggered an active reaction, culminating in a long strike of all medical personnel. Italy Overview The Italian National Health Service (Servizio Sanitario Nazionale [SSN]), was founded in 1978 by the law 833/78, although its roots can be traced, according to Ferrera (1999: 45) as far back as 1918. Similar to the case of Greece, the old social insurance system was by this time overburdened with deficits and inefficiencies, often leaving the outsiders of the formal labour market without protection. The ambitious initial reform did not however produce the expected results, at least with regard to efficiency and equity of provision of the health services.6


Health expenditure is very high when compared to the other Southern European countries, but is not efficiently allocated. Public expenditure, although much more important in per capita terms than in the other three countries, had fallen in 1996 to the level of 1989, whereas private expenditure had been constantly increasing. In 1994 it amounted to about 2.2 per cent of GDP (see Tables 5.9–5.11). Deficits have been recorded every year since the introduction of the SSN: in 1993 and 1994, they amounted respectively to 7.5 per cent and estimated at 8.6 per cent of total NHS outlays (Granaglia, 1997). The SSN is decentralised with three institutional tiers at national, regional and local levels. Responsibilities for the implementation, planning, financing and monitoring of the health care system are allocated to the 21 regions. The regions organise the health services and the related activities in their territories and co-ordinate the action of local health units and hospitals. Territorial distribution of resources has taken into account the actual diversities such as higher levels of government resources that are to be transferred to poorer regions. However, the increased regional autonomy and decentralisation, together with the important socio-economic diversities between North and South and a political tradition of overpoliticised and sometimes partisan self-government have resulted in a fragmented and unequal distribution of health services (Fargion, 1997). This fact is reflected in low levels of public satisfaction with regard to the system (see Table 5.20). Finance and organisation The SSN is made up of 21 regions, divided into 320 local health units (Unitarie Sanitarie Locali [USL] – see Table 5.29). The local health units supply health services within their territorial responsibility, through their own services or by contracting out to other public or private institutions, which have managerial responsibility for health care delivery, with 184 public, self-governing hospitals. The definition of global, minimum standards of health care and the allocation of resources to the regions on a per capita basis is set at the central level by parliament and the Ministry of Health (organised into five departments and six sections). A national health plan was promulgated by the parliament, but the first health plan was passed only in 1994, more than 15 years after the founding of the NHS. Funding is ensured through budgetary coverage, general taxation and social insurance contributions. Insurance funds still contribute over 42 per cent of SSN expenditures. A new contribution was introduced in 1986, the so-called health tax, which is calculated in terms of the difference between taxable personal income and the sum of wages and pensions. The rate amounts to 5 per cent for the first 40 million lire and 4.2 per cent for incomes between 40 and 100 million lire. Private participation (cost sharing) provides only 2.5 per cent of the receipts of the SSN (Granaglia, 1997).

National Health Systems 151 Table 5.29 Regional distribution of all kinds of health institutions, 1995 Piemonte Lombardy goesthem of Aosta P. a. Bolzano P. a. Trento Veneto Friuli V. Julia Liguria Emilia R. Tuscany Umbria Marches Lazio Abruzzi Molise Campania Puglia Basilicata Calabria Sicily Sardinia

118 225 18 19 123 32 53 128 73 27 55 219 36 10 162 132 17 75 140 51

Source: Ministero della Sanita (1996).

Other central institutions with responsibilities for health service provision are: ●

●

●

●

●

The National Health Council, a consultative organisation, composed of representatives of government, the regions, the central administration, professionals and social unions, which is chaired by the Ministry of Health. The Higher Health Council (CSS), a technical-advisory organisation of the Ministry of Health that expresses opinions concerning the improvement of the SSN and the health conditions of the population. The Higher Institute of Health (ISS), a technical-scientific organisation of the National Health Service, which carries out functions of research and learning. The Advanced Institute for the Prevention and Emergency of Work (ISPESL), a technical-scientific organisation of the National Health Service, which carries out functions of information, documentation, research and experimentation with regard to health protection and emergencies and well-being in the workplace. The Institutes of Shelter and Cure (IRCCS) are independent national agencies of research in the biomedical field.

The implementation of health care delivery is performed at a regional level by elected councils. Responsibility for expenditure is shared by the


region, the USL Directorate and the Hospital Agency Directorate. Regions have substantial autonomy and are responsible for the planning, financing, monitoring and control of health care within their territories. The Agency for Regional Health Services carries out support functions of the regional activities, evaluates the cost and efficiency of the services available to the citizens and indicates inefficiency in the management of the human and material resources. The basic criterion for the distribution of funds is the frequency of health consumption by age and gender, mortality rates and local epidemiological indicators. Services All residents (including legal foreigners) who are registered with the SSN are beneficiaries of its services (see Table 5.30). In principle, there is free choice of public or private hospitals among those registered under the scheme and hospitalisation is free. Children up to six years of age, persons aged over 65, unemployed persons below a fixed level of income and recipients of social pensions do not contribute to medical expenses. Primary care is provided through the USLs. In addition, private practitioners are contracted to the SSN, often on a part-time basis along with their hospital responsibilities. The 1978 legislation provided for contractual relationships between the SSN and private health care providers both for nonprofit and for profit. Contracts differ in volume and payment agreed according to the provider. Patients usually register with either SSN employed or self-employed general practitioners (GPs) who, in theory, act as gatekeepers to secondary care (European Parliament, 1998). Access is direct in cases of emergency or under referral from a GP. There is free choice of GP among those approved for the region. (Doctors are employed either by the regional health administrations, or by the hospitals. General practitioners and specialists are contracted for the provision of primary health care, paid on a flat-rate lump sum per capita.) The choice is confirmed unless the insured decides otherwise. There is no payment made by the insured person for treatment. The hospitals and secondary care are dominated by the public sector, as public hospitals represent 60 per cent of accredited hospitals and 81 per cent of the beds. USLs administer 75 per cent of public hospitals (comprising 57 per cent of beds in public hospitals). In the late 1990s hospitals became self-governing trusts, financed by the national health care fund on the basis of per capita parameters for the population in each region (see Table 5.31). Patients have free choice of hospital, including private ones, as USLs contract with providers. Despite the overprovision of hospital services, peripheral inequalities still persist, especially with respect to the traditional gap between North and South. Public doctors of the SSN are not allowed to practise privately, but all GPs and most institutions providing specialist

Table 5.30 Detailed breakdown of the social benefits of health care – thousand millions, national currency 1990

1991

1992

1993

1994

1995

1996

1997

Total social benefits Disability benefits

78,181 23,073

87,327 24,134

91,096 26,071

90,472 28,224

89,632 29,953

97,558 30,183

104,738 31,471

112,813 30,788

Health benefits analysis A – Non-means-tested A-1 Cash benefits A-2 Benefits in kind In-patient care Out-patient care Direct provision of pharmaceutical Other direct provision Reimbursement of pharmaceutical

78,078 4,076 74,002 40,476 33,526 12,941 20,585 0

87,217 3,969 83,248 46,696 36,552 13,585 22,967 0

90,991 4,425 86,566 49,409 37,157 13,123 24,034 0

90,247 3,946 86,301 50,396 35,905 11,750 24,155 0

89,387 3,381 86,006 51,980 34,026 9,772 24,254 0

97,174 12,775 84,399 51,629 32,770 9,670 23,100 0

104,399 13,141 91,258 55,523 35,735 10,588 25,147 0

112,448 13,410 99,038 60,512 38,526 11,650 26,876 0

103

110

105

225

245

384

339

365

B – Means-tested Source: Eurostat (2000b: Table C 2.8.1).

153

154 Southern European Welfare States Table 5.31 Hospital efficiency, 1995

General surgery General medicine Neurology Oculists Orthopaedic Obstetrics Paediatrics Urologists Pneumologists

Average days of hospital treatment

Per cent of coverage of beds

7.9 9.8 – 5.3 7.4 – – – 12.5

74 84 10.6 63 77 5.3 4.7 7.7 80

Source: Ministero della Sanita (1996: Table 4, 37).

Table 5.32 Number of patients per general practitioner 1991 1992 1993 1994

1,014 1,039 1,054 1,107

Source: Ministero della Sanita (1996: Table 1).

and diagnostic assistance contract to the SSN. The USL can decide to send patients to private hospitals on the basis of a case-by-case evaluation. Since 1985, the regions have been allowed to select a list of services that can be privately provided and then publicly reimbursed at prices established by the regions themselves. All these features justify the assumption that the SSN can be described as a private–public mix of a bureaucratic character, that does not ensure incentive compatibility (Granaglia, 1997). There are 53 practising physicians per 10,000 residents, almost double the European average of 28.1 (1994). However, as is also the case in Greece, the number of certified nurses is lower than that of doctors – only 41 per 10,000 in comparison to the European average of 70 (1992) (European Parliament, 1998). The number of patients per general practitioner is relatively low (Table 5.32). Both these figures indicate a structural disequilibrium at the use of medical humanpower.


Pharmaceutical care Medication is classified into three groups: ●

●

●

Group A: Medication termed ‘essential’ for the treatment of more serious illnesses, which is free for all insured persons. Group B: Medication for the treatment of less serious illnesses than those referred to in group A, with a user contribution of 50 per cent. Group C: Other medication and medication for which a prescription is not required, with a user contribution of 100 per cent.

There are no free benefits for prostheses, spectacles, hearing aids, etc. Problems and prospects The organisational model of the SSN is often criticised for its weak central direction and the lack of co-ordination among the three tiers of the system, that is the central authorities, the regions and the local health units. The latter claim that their budgets are insufficient, whereas the central authorities accuse them of inefficiency and overspending. Another criticism addresses the methods of management, which are found to focus merely on the setting of objectives and which ignore the control of their implementation. The reforms did not resolve those problems, as they focused mainly on cost containment and balancing the budget, through managerial solutions. Still, the improvement of equity and efficiency are goals of greater importance. No more than 30 per cent of health care services have proved effective with respect to the stated objectives (Granaglia, 1997). The new thrust of the reforms is oriented towards a greater degree of privatisation of the system, which will bring important new pressures on the SSN. Portugal Overview The Portuguese National Health System (Servino National de Salude [SNS]) was introduced in 1979, by law 56/79. It covers approximately 75 per cent of the population, the remaining 25 per cent, most of whom are civil servants or military personnel, participate in special schemes. In consequence, almost one quarter of the population has no access to the NHS (Gouveia Pinto, 1997: 142) and 17 per cent rely mostly on private insurance and mutual associations (OECD, 1998b). However, total health care expenditure grew rapidly from 2.8 per cent of GDP in 1970 to 8.2 per cent of GDP in 1995 (see Tables 5.33, 5.36 and 5.37). This is above the EU average, which illustrates an important attempt to shorten the gap between the health services of the country and the European average, although the per capita expenditure is still less than half of the EU average. The Ministry of Health has the central role of setting the standards of health services, the levels of co-payments, the overall supervision of the SNS and its co-ordination with the private sector. The National Health

156 Southern European Welfare States Table 5.33 Total expenditure of the SNS, 1985–95 Years

1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 85/95* 94/95*

Market prices (%) 129,967 159,061 191,268 233,216 273,234 345,145 442,714 514,082 562,395 622,667 695,163 565,196 72,496

100.0 122.4 147.2 179.4 210.2 265.6 340.6 395.5 432.7 479.1 534.9 434.9 55.8

Constant prices (%) 129,967 142,574 156,740 174,156 181,044 201,839 232,425 247,836 254,532 267,931 287,141 157,174 19,210

100.0 109.7 120.6 134.0 139.3 155.3 178.8 190.7 195.8 206.1 220.9 120.9 14.8

Note * increase Source: Data obtained from the Internet site of the Portuguese Ministry of Health www.min-saude.pt and www.dgsaude.pt.

Council is a consultative organisation composed of various experts from different areas. Service provision is ensured mainly through public providers within the SNS, but since the reform of 1990 there is also a possibility of contracting with private actors. Despite the overall centralised character of the SNS, there are important institutional measures that have been taken towards the decentralisation of services. For example, for ambulatory care the country is divided into 18 mainland districts in which the health authorities (ARS) are responsible for the administration of health centres. However, SNS health centres (centros de salude) and the hospitals maintain their own budgets which are managed at district levels (see Table 5.34). Services Primary care is provided free of charge by the SNS health centres. Private practitioners are paid by tariffs set by the Ministry of Health. The public sector dominates service provision (see Table 5.35) in the hospital sector, controlling more than 80 per cent of beds. There are 15 central hospitals in the major urban centres, incorporating university clinics and 38 district hospitals providing both in-patient and out-patient care, 21 specialised hospitals for maternity, psychiatric, orthopaedic services, and so on, in addition to 24 local, general hospitals. In-patient care in public hospitals is provided free of charge, by referral from a doctor of the SNS. The use of private hospitals is reimbursed at the level of public hospital services, unless some types of specialised services are not available in public hospitals (see Table 5.36). As is the case in Greece, and for similar reasons (such as lack of primary care

National Health Systems 157 Table 5.34 Health expenditure per district and region, 1995 District or region Aveiro Beja Braga Bragança Castello Branco Coimbra Évora Faro Leiria Lisbon Portalegre Port Santarém Setúbal Viana of the Castle Real Village Viseu Region North Region Centre Lisbon Region Tejo Valley Alentejo Region Algarve Region

Total

1,561,969 143,518 461,210 170,041 381,149 1,566,956 140,281 363,810 1,980,280 5,362,210 366,788 4,441,121 90,742 885,372 318,345 273,358 4,280,556 5,723,768 10,544,004 6,338,324 650,587 363,810

Per capita investment 2.3 0.9 0.6 1.1 1.8 3.7 0.8 1.1 4.6 2.6 2.9 2.6 0.2 1.2 1.3 1.2 10.7 1.9 4.6 2.0 1.4 1.1

Source: Data obtained from the Internet site of the Portuguese Ministry of Health: www.min-saude.pt and www.dgsaude.pt.

facilities), the hospitals also offer primary care services. Odontology, laboratory tests and X-rays are generally supplied by the private sector, later reimbursed to patients (Gouveia Pinto, 1997: 143). Doctors in public hospitals and public health centres are salaried by the SNS. The rate of beds per 1,000 inhabitants is the lowest in Europe (4.3 in 1994) and continues to decrease. The number of practising physicians (29.3 per 10,000 population, 1994) is above the EU average (28.1) and there is a considerable shortage of nurses. Pharmaceutical care There is a positive and a negative list of pharmaceuticals. The average co-payment for reimbursable drugs is approximately 25 per cent. Problems and prospects The 1990 and 1993 reforms focused on the decentralisation of the management of health care delivery and on the incorporation of private elements into the SNS, by ‘contracting out’ services to private health care institutions, particularly in technologically intensive services. The 1993

158

Table 5.35 Analysis of social benefits for sickness/health/disability care – millions, national currency 1990

1991

1992

1993

1994

1995

1996

1997

Total health benefits Disability benefits

405,771 221,471

528,060 258,952

708,079 299,915

827,948 342,396

948,773 388,066

955,463 349,304

1,068,004 376,137

1,177 449

Health benefits analysis A – Non-means-tested A-1 Cash benefits Periodic Paid sick leave Other cash periodic benefits Lump sum

405,689 55,903 55,903 55,182 721 0

526,555 68,381 68,381 67,537 844 0

706,432 79,244 79,244 78,319 925 0

826,147 74,082 74,082 73,119 963 0

946,924 80,930 80,930 79,917 1,013 0

953,272 95,322 95,322 94,280 1,042 0

1,065,820 95,718 95,718 94,700 1,018 0

1,174 100 100 99 1 –

A-2 Benefits in kind In-patient care Direct provision Reimbursement Out-patient care Provision of pharmaceutical products Other direct provision Reimbursement of pharmaceutical products

349,785 168,329 166,934 1,396 180,288 61,928 90,977 3,556

458,174 226,303 224,229 2,074 230,454 80,119 119,983 4,490

627,188 315,066 311,062 4,004 307,483 110,164 162,306 5,409

752,065 377,263 372,887 4,376 363,167 131,467 192,250 6,445

865,994 436,846 431,464 5,382 411,149 149,527 220,629 6,158

857,951 432,121 426,800 5,322 407,934 150,490 217,665 6,736

970,103 478,416 474,352 4,063 478,588 172,965 264,563 5,747

1,074 531 526 4 530 191 296 6

83 6 77

1,506 4 1,502

1,647 4 1,643

1,801 4 1,797

1,849 4 1,845

2,190 5 2,185

2,183 2 2,181

2 – 2

B – Means-tested Cash benefits Benefits in kind Source: Eurostat (2000b: Tables C 2.12, C 2.13).

National Health Systems 159 Table 5.36 Distribution of the expenditure of the SNS, 1985–95 Staff and administration

Medical services

Transferred to private sector Medicament

1985 % 1986 % 1987 % 1988 % 1989 % 1990 % 1991 % 1992 % 1993 % 1994 % 1995 % 85/95* 94/95*

129,967 100.0 159,061 100.0 191,268 100.0 233,216 100.0 273,234 100.0 345,145 100.0 442,714 100.0 514,082 100.0 562,395 100.0 622,667 100.0 695,163 100.0 565,196 72,496

61,808 47.6 74,962 47.1 88,117 46.1 114,192 49.0 140,133 51.3 182,752 52.9 236,899 53.6 273,866 53.3 288,127 51.2 294,875 47.4 314,809 45.3 253,001 19,934

25,817 19.9 31,330 19.7 39,348 20.6 45,145 19.4 53,467 19.6 65,505 19.0 85,142 19.2 101,385 19.7 122,039 21.7 143,760 23.1 171,158 24.6 145,341 27,398

23,849 18.4 32,691 20.5 41,134 21.5 46,437 19.9 50,129 18.3 61,325 17.8 76,742 17.3 86,706 16.9 97,910 17.4 107,220 17.2 122,598 17.6 98,749 15,378

Medical services 18,493 14.2 20,078 12.6 22,669 11.9 27,442 11.8 29,505 10.8 35,563 10.3 43,931 9.9 52,125 10.1 54,319 9.7 67,098 10.8 74,155 10.7 55,662 7,057

Note * increase Source: Data obtained from the Internet site of the Portuguese Ministry of Health: www.dgsaude.pt/ind.

law favoured private health insurance in particular, providing for public co-payment when the level of contributions is below the average per capita cost within the SNS. The latest health reform plan, ‘Health in Portugal: A strategy for the turn of the century’, outlines what the basic principles of the reform should be. These principles include the improvement of access to quality health care, the introduction of managerial methods and solutions, the mobilisation of required resources and their effective utilisation through means of development and innovation. See Table 5.37 overleaf. Spain Overview In Spain the first compulsory health insurance was introduced in 1942. (A National Institute of Previsión [INP], which was established by the law

160 Southern European Welfare States Table 5.37 Expenditure by type of activity 1995 Total Primary health care Construction, adaptation, remodelling and equipment of health centres Mental health Others Specialised care Construction and equipment of hospitals Mental health Others Human resources Construction and improvement of establishments of health education Management and organisation S. Computers Systems of information Others Research Scientific research Others Programme health woman and child Technical assistance

1996*

23,891,898 3,580,090 3,247,865

41,943,528 8,596,356 8,452,665

68,734 263,491 19,268,277 17,222,593 372,318 1,673,366 307,493 307,493

121,500 22,191 30,345,441 28,055,632 301,453 1,988,356 631,056 631,056

453,119 211,524 149,173 92,422 235,288 235,288 47,631 30,232 17,399

1,125,351 90,000 81,000 954,351 92,419 92,419 1,152,905 822,056 330,849

Note * estimated Source: Data obtained from the Internet site of the Portuguese Ministry of Health: www.minsaude.pt and www.dgsaude.pt.

of 27 February 1908, was initially targeted only at military personnel.) The decree law 36/78 initiated the differentiation of the social security components (established by the fundamental social security law, 1963), creating three National Institutions: of Health (INSALUD – Instituto Nacional de la Salud, or National Institute of Health); of Seguridad Social (INSS); and of Servicios Sociales (INSERSO), with responsibilities in the fields of health care, social services and economic and social entitlements, respectively. As a consequence, health care was provided within the social security system by INSALUD. In 1986, the Ley General de Sanidad (Health Act) established the National Health System by merging all public health care institutions into a single body. The Health Act also enshrined the constitutional principle of the universal right to publicly funded health care by adopting similar principles to those of the other Southern European countries (plus a broad regional decentralisation); these are: ●

introduction of universal health care coverage financed through general taxation;

National Health Systems 161 ●

●

unification of the fragmented, overlapping networks of public and privately contracted providers of health services; identical benefits and services throughout the country.

Among other things, the Spanish Constitution grants important responsibilities and powers in matters of public health to the Autonomous Communities (Regions).7 Thus the SNS acquired a dual structure. INSALUD is the central organisation, with global managerial responsibility for public health care and simultaneously, with responsibility for providing health services to the ten Autonomous Communities (Regions) and to the cities of Ceuta and Melilla, that is to more than 14 million Spaniards or 38.18 per cent of total population. However, INSALUD services have been devolved to the seven largest Autonomous Communities of Catalonia, Andalucia, the Basque Country, Valencia, Galicia, Navarra and the Canary Islands, which account for 61.82 per cent of the population. These seven regions8 have their own bodies to manage health care, with responsibility for health planning and the management and administration of health care within their territories. The budget of INSALUD for 1998 amounted to 1,454,724 million pesetas, representing 4.7 per cent of the national budget. Over the period 1982–95 the percentage of total health expenditure in the GNP increased from 5.9 per cent to 7.6 per cent and is still increasing. For the year 2000, the budget for health care represented 30.71 per cent of total social expenditure and it was increased by 7.97 per cent for 1999 (Social Budget of 2000). In 1995, public health expenditure represented 78.2 per cent of total health expenditure. Coverage of the population is now almost complete (99.5 per cent), according to the National Survey of Health of 1995. The publicly funded insurance scheme covers 98.5 per cent of the Spanish population, of which 93 per cent are covered by the ‘compulsory’ insurance scheme, 1 per cent (those with very low incomes) obtain subsidies from the state and 4.5 per cent, mostly civil servants, are insured through a special scheme. Approximately 17 per cent of Spaniards purchase some kind of additional private insurance under voluntary schemes (European Parliament, 1998). Finance and organisation The Ministry of Health and Consumer Affairs has the central responsibility for setting the national guidelines for health policy, for determining the benefits package of the SNS, for setting the level of primary care, hospital out-patient and in-patient care, for pharmaceutical benefits and for supervising their implementation. INSALUD, however, remains the basic central component of the SNS and is accountable to the Minister of Health through the Secretary General for Health Services. Its governing bodies are the Secretary General for Health Services (of which the Ministry of Health holds the executive presidency) and the General Council, the corporate body for the control and participation in the management of INSALUD, whose members are representatives

162 Southern European Welfare States Table 5.38 Public health institutions Centres of health Emergencies Well-woman units Family centres Units of mental health Units of physiotherapy Units of dental services Obstetrical units

1,066 91 60 60 159 226 151 658

Source: Data obtained from the Internet site of INSALUD: www.msc.es/insalud.

of trade unions and employer organisations and top civil servants. The executive president of INSALUD chairs the Council. INSALUD is made up of 994 centres of health and 1,083 offices of primary care. It uses, in addition, 99 other medical centres, with 20,951 beds. It employs 132,726 medical and administrative personnel. INSALUD also plays an important role in the education and training of health care personnel, as it has responsibility for 66 hospitals accredited for residential training, ten university nursing schools, two midwifery/nursing training units and the National School of Occupational Medicine (see Table 5.38 for an analytical presentation of public health institutions). With regard to its peripheral organs, INSALUD is divided into 12 territorial authorities, which correspond to the ten regions of its direct responsibility and to the cities of Ceuta and Melilla. Each of the seven Autonomous Communities to which health services have been devolved is governed by the health department of the regional government. All of them have divided their territories into health areas, on the basis of geographical, socio-economic and medical criteria. The health areas serve as a baseline structure for the planning and provision of primary and secondary health care services. The seven Autonomous Communities set up strategic health plans for their territories. Annual budgets are allocated on a per capita basis, whereas the calculation of the budget for INSALUD hospitals is based on a weighted health care unit (UPA), calculated on aggregate medical activity. An interterritorial Health Council of the SNS co-ordinates communication between them and the Ministry of Health and ensures the conformity of the strategic health plans to national standards and objectives. Each year as part of the budget process, every hospital negotiates a service contract (Contrato Programa) with INSALUD, defining the obligations and activity for the fiscal year and the given budget allocation. Services Within each Area Health, Authority/Province, INSALUD services are organised on two levels, each with its own management and budget: primary care and hospital/specialised services (see Table 5.39). Primary care is provided either

Table 5.39 Analysis of social benefits for sickness/health/disability care – thousands, national currency 1990

1991

1992

1993

1994

1995

1996

1997

Total health benefits Disability benefits

2,888,127 774,232

3,384,267 892,386

3,913,567 968,944

4,138,683 1,041,486

4,234,531 1,106,221

4,455,130 1,147,565

4,702,068 1,254,449

4,810,583 1,290,319

Health benefits analysis A – Non-means-tested A-1 Cash benefits Periodic Paid sick leave Lump sum

2,728,531 523,152 523,152 523,152 0

3,252,988 623,363 623,363 623,363 0

3,773,705 752,357 752,357 752,357 0

3,993,051 777,901 777,901 777,901 0

4,074,175 786,287 786,287 786,287 0

4,277,730 821,415 821,415 821,415 0

4,514,102 874,786 874,786 874,786 0

4,618,875 847,054 847,054 847,054 0

2,205,379 1,327,739 1,289,060 38,679 872,372 440,696

2,629,625 1,601,780 1,584,977 16,803 1,022,602 509,726

3,021,348 1,849,262 1,829,192 20,070 1,166,636 587,190

3,215,150 1,964,966 1,943,583 21,383 1,244,863 619,126

3,287,888 2,028,721 2,007,454 21,267 1,254,125 666,623

3,456,315 2,069,135 2,048,896 20,239 1,382,130 767,708

3,639,316 37,718,821 2,181,715 2,245,018 2,163,087 2,226,473 18,628 18,545 1,452,753 1,521,975 815,976 880,335

425,000 0

503,432 0

569,972 0

615,750 0

578,564 0

604,985 0

624,238 0

629,143 0

6,676 5,268

9,444 5,243

9,474 5,450

9,987 5,321

8,938 5,042

9,437 5,050

12,539 4,848

12,497 4,828

159,596 0 159,596

131,279 0 131,279

139,862 0 139,862

145,632 0 145,632

160,356 0 160,356

177,400 0 177,400

187,966 0 187,966

191,708 0 191,708

A-2 Benefits in kind In-patient care Direct provision Reimbursement Out-patient care Provision of pharmaceutical products Other direct provision Reimbursement of pharmaceutical products Other reimbursement Other benefits in kind B – Means-tested Cash benefits Benefits in kind

163

Source: Eurostat (2000b: Tables C 2.5.1, C 2.5.2).

164 Southern European Welfare States Table 5.40 Expenditure by type and function, 1998 By type

Pesetas (millions)

%

Personnel Current expenditure

708,642 228,296

48.7 15.7

Out-sourced services (public and private) Pharmaceuticals (prescription) Capital investments

145,705

10.0

Primary care Specialist and hospital services Training

308,099

21.2

Administration

54,093

3.7

9,889 1,454,724

0.7 100

Other Total

By function

Pesetas (millions)

%

523,921 873,879

36 60.1

33,055

2.3

19,672

1.3

4,197

0.3

1,454,724

100

Internal control and accounting Total


by single practitioners, reimbursed on a per capita basis, or by ‘primary health care teams’ (EAP), composed of multi-disciplinary salaried doctors. At present 1,134 EAPs serve 84.23 per cent of the population covered by INSALUD. In addition, there is a network of 1,066 health centres (see Table 5.38). There is free choice of general practitioner, family doctor,9 paediatrician and obstetrician within every health area, provided that this choice does not bring the number of patients on a doctor’s list above the maximum permitted (each one of them is responsible for 1,100 people). Hospitals and out-patient clinics (Ambulatorios) offer secondary care. Seventy per cent of the hospitals are public. INSALUD controls 82 hospitals directly, with 40,416 beds, 890 operating theatres and 166 delivery rooms and it operates a total of 95 out-patient clinics. In addition, it contracts out some medical and surgical services to 99 hospitals, of which approximately a third are public. All autonomous regions have at least one general hospital, which provides basic clinical services and 24-hour emergency services. However, the number of hospital beds is considerably lower than the European average (four beds per 1,000 population in 1994) (see Table 5.41). Hospital operations and surgery are free of charge. An administering body authorises long-term care, either automatically, for some diseases, or upon medical application where constant attention is necessary. Access to larger specialised hospitals is by specialist referral. Maximum waiting times have been established for 12 surgical procedures. The average waiting period for non-emergency surgery was cut from 210 days in June 1996 to 89 days in December 1997. Ambulatory surgery increased dramatically, from 25,203 operations in 1995 to more than 73,000 in 1997 (see Table 5.42). The number of practising physicians (40.8 per 10,000 population, 1993) is above the EU average, as is the rule in the Southern European member states. The number of nurses is for the first time reported to be higher than

165 Table 5.41 Hospitals by category, 1995 Health care centres

Specialised centres

Hospitals

Hospitals with specialised centres

Total Public National health system Other public Non-public Private, non-profit Private, profit-seeking

782 324 196 126 456 131 327

112 112 108 4 –

183 183 171 12 –

By purpose Total General Special short-term stay Special long-term stay Psychiatric

782 456 124 114 88

112 106 2 – 4

183 164 7 – 12


Table 5.42 Efficiency of hospitals, 1995 Total

Beds in use per 1,000 inhabitants Patients per 1,000 inhabitants Average stay per patient Yearly patient rotation* Total of personnel** Health personnel**

General

Special short-term

Special long-term

3.94

2.91

0.24

0.29

0.50

108.82

97.71

8.96

1.36

0.78

10.46

8.40

6.33

70.38

209.28

27.59

33.58

37.82

4.65

1.59

2.40

2.82

2.49

1.11

0.62

1.69

2.00

1.77

0.69

0.40

Notes ** number of cases treated per bed. ** per 1,000 inhabitants. Source: Data obtained from the Internet site of INSALUD: www.msc.es/insalud.

Psychiatrics


the number of doctors. Provision and normal replacement of prostheses, orthopaedic apparatus and wheelchairs is free of charge. Grants may be made for spectacles, hearing aids and other special types of prosthesis. Pharmaceutical care Per capita consumption of pharmaceuticals in Spain is higher than the European average, despite a number of measures aiming to rationalise prescription and use. There is a positive list of pharmaceuticals and the selection of medications is set on the basis of rationality, efficiency and reduction of costs. Co-payment by the patients is approximately 30–40 per cent, but there is no charge for pensioners or residents over 65 years of age with insufficient means. In 1997, the consumption growth rate fell by some 30 per cent. Problems and prospects The reasons for the relatively greater success of the Spanish health system, in comparison to the other Southern European member states, can be attributed to a variety of factors. First of all, its establishment in the second half of the 1980s was undertaken at the same time that the economy was experiencing unprecedented economic growth and the state an increasing fiscal capacity. There had been an average annual growth rate of GNP higher than 4 per cent and successive tax reforms of the UCD (conservative) and PSOE (socialist) governments. As a consequence, there were adequate financial means for its support. A second factor of importance was the decentralisation and internal competition introduced into the system. The system of regulated competition generates, through contracts established with suppliers, a system of incentives, which provides medical assistance, by optimal management of resources. The competition between suppliers, as a stimulus to innovation, is obtained by means of the autonomy of management from their own centres. These innovations are based on experiences derived from the purchaser–provider split as introduced in Sweden. Contracting public health units are destined ultimately to become autonomous public enterprises (di Rico, 1997). For the future, INSALUD has devised a Strategic Plan, which incorporates the Recommendations of the Parliamentary Subcommittee for the Reform of the Spanish National Health System. The basic goals of this plan and of the related on-going reform are, among others: ● ●

● ●

reorientation of the services towards the citizens; creation of a competitive system based on the separation of functions of purchase and provision; ensuring the autonomy of management; motivation, stimulation and participation of the professionals in the management of health services.

6 Migration into Southern Europe: Some Reflections on Policy Implications

Introduction The geographical mobility of people has increased markedly during the last half-century. International migration movements have become a major issue in population and societal change in both more and less affluent countries. Furthermore, the issues surrounding economic migrants, refugees and asylum seekers are high on the agendas of governments and social policy analysts around the world. International leisure and social travel have also been increasing rapidly, encouraged by reductions in the real cost of air travel and rising affluence. These changes have implications for the migrants, who include both older people and young adults seeking work, but who have received little attention to date in social policy. Within the matrix of the ever-growing global map of international population movements, flows of third-country migrants and of North-western Europeans into Southern Europe have, over the last two decades, become an important form of international and intra-European geographical mobility. This chapter provides, in a qualitative fashion, an overview of recent immigration trends into Southern European countries from various parts of the developed and less developed world. In so doing, it points to similarities and differences between the four major countries of Southern Europe (Greece, Italy, Portugal and Spain).1 Furthermore, it examines the way in which the Southern European governments have responded so far to the immigration phenomenon and to the challenge it constitutes to their rudimentary welfare states. The chapter has two main themes. First, we provide an analysis of immigration from ‘third countries’ into Southern Europe. A number of issues are addressed: immigration trends during the last two decades; questions of policy; migrants’ inclusion in certain niches within the informal sector; 167


issues of pluriactivity; multi-exploitation; lack of social citizenship rights; and the stigmatisation and racialisation of certain ethnic minority groups. Second, this chapter deals with intra-European migration, and most specifically, migration of citizens from Northern Europe who retire and settle in Southern Europe. Some questions related to social policy implications also receive special attention.

New migration? At the empirical level, both of the above mentioned types of migration are considered to be ‘new’, that is different from intra-European migrations of the 1960s and 1970s, in the following sense: 1. larger numbers, especially after the opening of the borders between the East and the West and the outbreak of ethnically motivated wars in the Balkans; 2. shifting geographies (new countries of origin and of destination); 3. feminisation (with women pioneering migrant flows from some parts of the world, for example, the Philippines, or being trafficked for exploitation in the prostitution and ‘entertainment’ industries); 4. new types of migration (for example, retirement migration within an integrated Europe; pendulum migration – that is, short-term back and forth movements across borders; trafficking of women and children); 5. new migrant types (especially undocumented migrants, retired migrants); 6. factors influencing the attraction of destinations (large informal economy; for retired migrants, factors associated with quality of life). Unlike the traditional gastarbeiters, third-country migrants to Southern Europe arrive from a variety of countries, are of diverse educational levels,2 and occupy jobs in the lowest segments of the tertiary sector rather than in the secondary sector. Furthermore, they are neither unionised nor entitled to legal protection and benefits, as they are, by and large, undocumented. This demand for cheap, flexible labour in certain segments or niches of the informal economy offers migrants the opportunity to be inserted into the vibrant Southern European underground economy. Moreover, the ‘new’ intra-European migrants have different characteristics when compared to the intra-European migrations of the 1960s and 1970s. The former are mainly elderly people whose main purpose is not to find another job but to spend their retirement in a good sunny climate and a friendly picturesque setting, factors associated with ‘healthy ageing’ and ‘well-being’. They are however, subject to social exclusion and structural disadvantage. The above mentioned differences reflect not only labour market changes at international and European levels but also social, political and demographic changes. These include the rapid ageing of Europe’s population due to declining fertility rates and increases in life expectancy, in addition to

Migration 169

changes in family formation and shortages of adequate care provision coupled with increased levels of dependency. They in turn create a need for various kinds of domestic support and also generate pressures on contemporary welfare systems. This is particularly so in the receiving countries, where the welfare systems are characterised by the dominance of informal family care as the basis of national social policy. The impact can be especially heavy on the small number of coastal regions where this type of migrant tends to concentrate. According to Williams (1996: 7), such movements can constitute an important ‘mechanism for the redistribution of the costs and benefits of an ageing population’ especially in terms of the impact it could have on local economies and welfare systems in relation to health and social service costs. At the same time, questions arise with regard to the processes by which these people become socially excluded or are underprovided by the health and social services in the host country.

From emigration to immigration: shifts and changes We argued above that there is a specific pattern of immigration into Southern Europe which distinguishes it from earlier migration movements in Europe and allows us to characterise it as ‘new’. The ‘new’ migration flows into Southern Europe ‘have to be understood within the globalisation, politicisation and “illegalisation” of migration … as well as within the Southern European model of economic and social development’ (King, 2000: 20). In addition, they have to be examined in the light of internal and external pressures to suppress such migration, which is perceived as a threat to internal societal cohesion as well as to security. This is because ‘new migrants, and particularly undocumented migrants and asylum seekers, have become the focal point for a brand of moral panic in many European societies, in which they symbolise a broader social group of immigrants who abuse the welfare state, commit crimes and threaten the employment of established citizens’ (Koser and Lutz, 1998: 3). As a response to these perceived threats, policies have been developed over the last 20 years or so, to defend the soft-belly of fortress Europe, against what is in an exaggerated fashion portrayed as a migrant invasion (King, 2000: 19). Examining the limited literature which treats the region as a whole, we now turn our attention to the remarkable turnaround the region has witnessed from emigration to immigration, changes in policy responses that have taken place and the change of Southern European societies from being hospitable and welcoming to strangers, to being xenophobic and unwelcoming to people from ‘other’ societies. Until the early 1970s, Southern Europe was a geographical emigration area with millions migrating away from oppressive social and political structures, unfriendly arid land, poverty and lack of opportunities. These emigrants were searching for social and economic advancement, and they


initially (during the early twentieth century) did so in the ‘new world’.3 Spain and Portugal have a history of colonial settlement and hence a longer tradition of transoceanic emigration than Italy and Greece. Emigration continued after World War II with European destinations becoming popular. Large numbers of Spaniards and Portuguese went to France, and Italians and Greeks to West Germany, while small numbers from all four countries migrated to Belgium, Switzerland, the Netherlands, Sweden, Britain and Luxembourg. According to King and Konjhodzic (1995: 43) ‘the four southern European countries sent about 12 million emigrants abroad from 1950–73, mainly to Western Europe but also overseas’. Most of these people migrated from rural areas, such as northern Portugal, the Italian Mezzogiorno, Galicia, Andalusia, and mountainous areas and remote islands of Greece, where more than 60 per cent of the active population was working in areas which lacked employment alternatives outside ‘poor-quality farming and fishing’. These push factors, in conjunction with pull factors (such as the multiplicity of entry points and the ‘open door policies of immigration’ geared towards attracting foreign low-cost labour to meet the labour demand of the rapidly industrialising countries of Northern Europe) and bilateral agreements between sending and receiving countries, were responsible for this massive intra-European population movement. The peasants and the urban poor of the south were turned into members of the industrial proletariat of the North, thus functioning as a ‘reserve army of labour’ for Northern Europe’s low-status employment sectors. In the 1970s, while some migrants sought new destinations either within Europe or in the oil-rich Gulf states, ‘gross emigration tailed off rapidly’ (King, 2000: 7). In the early to mid-1970s, we witnessed the growth of return migration, triggered by the restoration of democratic governments in Greece, Spain and Portugal, and the stringent measures aimed at halting recruitment and inflows of migrant workers by receiving countries in Northern Europe facing economic recession. The ‘Fordist mass production’ system of standardised goods for mass consumption had reached its limits (Fielding, 1993). By then, Italy, Spain and Greece had their first recordings of net inflows. It is difficult to quote precise figures as ‘official migration statistics are probably not a very true reflection of the actual flows taking place; and returns were often recorded by different means than departures’ (King and Konjhodzic, 1995: 44). As shown in Figure 6.1, the average percentage of foreigners legally residing in Southern Europe has increased since the 1950s and is estimated to be approximately 1–1.5 per cent of the total population. This is lower than the respective figures for other countries in Europe, such as Luxemburg (28 per cent), Switzerland (16.3 per cent), Belgium (9.1 per cent) and Germany (8.2 per cent) (Brochmann, 1995: 35). The number of migrants who returned to Southern Europe from 1974–8 has been estimated to be approximately 2 million (Bohning, 1979). Amongst those are approximately 0.5 million colonial repatriates (retornados) who

Migration 171 1.4 1.2 1 0.8 0.6 0.4 0.2 0 1950

1970 Greece

1980 Italy

Portugal

1990 Spain

Figure 6.1 Foreign legal resident population in Southern Europe, 1950–90, as percentage of total population Source: Brochmann (1995: 35).

returned to Portugal in the mid-1970s. Such estimates, however, should be cautiously interpreted as they are subject to wide margins of error. Gross emigration tailed off during the 1970s. Labour shortages related to the mass emigration of the 1960s and early 1970s created deficits in some sectors of industry and in agricultural regions. Therefore work permits were issued to foreigners. To give an example, the number of permits issued to foreigners by the Greek government increased from 6,982 in 1973 to 29,838 in 1980 (Iosifides and King, 1996: 78–9). Similarly, work permits in Spain totaled 50,343 in 1979 whereas in Portugal the legal foreign resident population was around 55,000 in 1980 (ibid.: 85–6). In the 1980s, the recordings of net inflows continued, mainly due to a new element: the immigration of non-Southern Europeans. The switch from being an emigration to being an immigration region occurred rapidly and caught the Southern European governments by surprise. Data problems do not allow for an accurate analysis of immigration trends. Much of the movement escapes official statistics, as many migrants are illegal and therefore undocumented. As King and Konjhodzic (1995: 44) argue, the relevant statistical offices ‘were locked in the mind-set of emigration countries – with no statistical categories of immigrants, only emigrants and returnees. Even SOPEMI, the OECD monitoring unit on migration, continued to refer to Italy, Spain, Portugal and Greece as emigration countries until 1990.’ Even today, as Singleton and Barbesino (1999: 20) put it, national ways of conceiving statistical data vary in the wake of the differences of different nation states as to what has to be counted and how … In any national context, discourses on migration are continuously shaped by policy makers, social scientists and public opinion. In this sense one could talk of a ‘cultural dissemination of knowledge’,


whereby different sets of statements emerge, merge and re-emerge in and through the communication on migration. Immigration increased dramatically in the late 1980s, as the collapse of the Eastern bloc led to considerable migratory pressure. Other reasons include: a demographic ‘push’ from less developed countries; geographical proximity (especially in the case of the Balkans and the Maghreb countries); colonial links; the implementation of tight immigration policy deficits; the diversion effect of closed Northern European borders; the existence of large underground economies capable of absorbing sizeable numbers of undocumented migrants; and the existence of small businesses whose survival in international markets depends on the work of cheap flexible undocumented migrants. The foreign population in Southern Europe was estimated to be 2 million in the mid-1980s (Simon, 1987: 287) and around 3 million in the mid-1990s (King and Konjhodzic, 1995: 47; Iosifides and King, 1996: 75). It can be expected to exceed the 4 million mark in the first decade of the new millennium. At the same time, emigration from Southern European countries continued with family reunification policies and pre-existing migration chain networks that were still alive, especially in overpopulated regions which lacked industrial development, and suffered from static, backward economic structures, high levels of underemployment, low incomes and sub-standard living standards due to lack of adequate infrastructure. A large proportion of the migrants currently hosted by Southern Europe are undocumented. More than a million of these live in Italy, constituting slightly more than 2 per cent of the Italian domestic population (Reyneri, 1999: 83). More than 650,000 reside in Greece, constituting more than 5 per cent of the total population and 7 per cent of the country’s labour force. Greece is particularly vulnerable as it is surrounded by countries which are sources of migrants. It also has miles of coastal land and thousands of islands which are difficult to control, and relatively developed tourist and shipping sectors which make clandestine arrival relatively easy. Spain and Portugal have attracted less immigration than Italy and Greece. The total immigrant population in Portugal has been estimated to be around 250,000 (ibid.: 86). The migrants include people from former colonies; for example, Brazilians, Cape Verdeans, Angolans and Mozambicans in Portugal; Latin Americans and Guineans in Spain; Ethiopians and Somalians in Italy. Other groups include Moroccans in Spain, Tunisians in Sicily, Chinese in Milan, Egyptians in Reggio Emilia, Filipinos in Athens and Rome, Africans and, since the 1980s, Eastern-Central Europeans in Athens and Piraeus. There are also ethnic migrants, such as Pontians and ethnic Greek Albanians in Greece and Portuguese nationality retornados who came back to Portugal after the de-colonisation in Angola and Mozambique. Some nationalities are common in more than two countries, such as Cape Verdeans in Portugal,

Migration 173

Spain and Italy, Filipinos, Poles, Albanians and Eritreans in Greece and Italy. As Iosifides and King (1996: 87) put it, ‘the differences in the nationality composition of the immigrant populations between Southern European countries are related to historical links, especially the colonial past, cultural, religious or linguistic factors, and locational reasons’. There are of course exceptions to the rule, such as the Bangladeshis in Italy (King and Knights, 1994) and the Nigerians in Greece. Although a high degree of spatial concentration can be observed in large cities, dispersion can also be observed in rural areas where the ‘black’ or underground economy and the dynamism of small-scale technologically backward labour intensive enterprises offer them substantial employment opportunities. Migrants replaced the gaps left in Southern European labour markets by departing locals who worked on the margins of the formal labour market or in the parallel labour market, thus occupying the lowest levels of the skill ladder, in positions which the indigenous labour forces are no longer prepared to undertake, despite rising rates of unemployment. This is because of the family structure, which financially supports educated, unemployed young people until they find jobs on a par with their qualifications rather than allowing them to be employed in jobs considered to be of low status. The jobs taken on by migrants range from a wide range of low-skilled jobs in the tertiary sector, including domestic service, cleaning jobs in offices and hotels, in catering, in the construction industry, and in activities in the primary sector such as farming, and self-employment, street-hawking and prostitution. Access to jobs in these undesirable labour market niches is provided through informal recruitment channels, which operate via ethnic networks reaching back to the countries of origin. These migrants are overexploited and confined to insecure jobs in smallscale flexible businesses operating fully or partly in the underground economy. The survival of such businesses in an increasingly competitive national and international environment often depends on the recruitment of cheap, flexible, malleable, easy-to-manage labourers who receive low pay, no social security and have little if any chance of upward mobility. Employers operating within economies with expensive welfare systems and Kafkian bureaucratic rules, and who to a large extent continue to employ labour-intensive production methods (for example, in agriculture; in the tourist industry; in construction), prefer clandestine labour as it is cheaper, casual, flexible, mobile and ‘hard-working’. As Venturini (1990) argues, their propensity to self-exploitation creates the very demand for their services. The ‘dual labour market system’ operating in all four countries may explain the coexistence of high unemployment (especially of educated youth) and immigration. However, direct competition between the two groups seems minimal as most native workers refuse to take on jobs performed by migrants. Nevertheless, these migrants may have taken up part-time opportunities for local workers or seasonal migrants from adjacent regions.


There seems to be a ‘gender asymmetry’ in that some flows are overwhelmingly male (for example, those from Moslem countries such as Egypt, Morocco, Tunisia, Pakistan, Bangladesh etc.) and others exclusively female (for example, flows from the Philippines, Cape Verde and the Dominican Republic). There is also ethnic specialisation in different types of work and labour-market competition between migrant groups. Although the Filipinos in Greece are regarded as ‘the domestic workers’ (ethnic job specialisation), they compete with Albanians and East Africans (Lazaridis, 2000a). In Spain, domestic service is performed by Somalians, Moroccans and Peruvians as well as Filipinos (Chell, 2000; Ribas-Mateos, 2000). The Africans in Spain and Italy, and the Albanians and Poles in Greece work in agriculture as seasonal workers at harvest time. The Poles and Albanians in Greece, the Africans in Spain and people from Mozambique, Guinea-Bissau and Angola in Portugal are prominent in construction. The Egyptians and Nigerians in Greece (Iosifides, 1997; Lazaridis, 2000b) and the Bangladeshis, Senegalese and Moroccans in Italy specialise in street-hawking (King, Fielding and Black, 1997; Knights, 1997). This type of work can be lucrative but embodies a high-risk element as police may confiscate their goods and deport them. The Cape Verdeans in Spain are concentrated in mining. The Chinese in Italy are involved in the restaurant and leather trades, the Tunisians and Egyptians as fishermen (King, 2000), while in northern Italy many migrants work in industry. Some Brazilians in Portugal and some Ethiopians in Greece work as doctors, managers and technicians. The Ukrainians and the Russians in Greece are exploited in ‘high class, well paid, hidden prostitution’, whereas the Albanians in Greece and the Nigerians and Albanians in Italy are involved in forced low-class street prostitution (for Italy, see Campani, 2000; for Greece, see Lazaridis, 2001). The majority of these migrants work below the legal minimum wage and are denied any possibility of being covered by the host country’s social security systems or of receiving any benefits in the case of accident or disabling injury. They have no access to the rights stipulated by equal opportunity legislation with respect to equal pay for work of equal value, equal treatment or citizenship rights in terms of provision of welfare and income maintenance. There is a policy vacuum. The development of a lucrative migration business has emerged in the region, with ‘migration entrepreneurs’ ranging from travel agents to unscrupulous criminals, organising the movement of people worldwide, with Southern Europe as a prime target. The cost of migration is often borne by the migrants themselves and not by employers in the host country (see Salt and Stein, 1997). For such entrepreneurs, as well as for the migrants themselves, the region is an eldorado, where ‘work, riches and a taste of the “sweet life” can be obtained’ (King, 2000: 19). For national policy-makers on the other hand, the objective is to defend the ‘fortress’ against an invasion of the ‘barbarians’, as third-country migrants have often been portrayed by the media. We will now turn our attention to the

Migration 175

efforts made by national policy-makers to safeguard the ‘fortress’, which are often at the expense of the tradition of tolerance and openness towards foreigners, a tradition which reflected the region’s long-established international links through tourism, the shipping industry and the Southern European diaspora.

From emigration to immigration: fragmented policy responses In the mid-1980s, all four countries found themselves with immigration procedures predating World War II. For example, until 1985, there was no legal framework regulating the rights and responsibilities of the foreign population in Spain (King and Rodriguez-Melguizo, 1999: 63). In Greece, the basic piece of legislation which served to control the movement of people into and out of the country was, until 1991, law 4310 of 1929. The entry of foreigners into Italy was dealt with by the fascist laws no. 773, introduced in 1931, and no. 635, introduced in 1940 (Daly and Barot, 1999). Emphasis was on security and public order. In other words, legislation in Italy covered only the expulsion and prohibition of entry at the border, thus ignoring other aspects of the phenomenon such as employment (Bonifazi, 2000: 240). Outright discrimination was also exhibited against non-nationals, whose only safety belt was the often corrupt and ineffective bureaucratic procedures (Baldwin-Edwards, 1991: 203). In the absence of immigration controls in all four countries, and in the cases of Italy and Greece even of immigration indicators, these countries initially adopted a laissez-faire approach rather than trying to use their own experiences as emigration countries to inform their policies of immigration. Gradually all four countries began to introduce policies which not only attempted to control immigration but also to bring them into line with Northern European practices, despite the need for labour in their large informal economies. Italy and Spain began enacting programmes for the regularisation of migrants and asylum seekers in the mid-1980s. These initial responses from Spain (the Immigration Law of 1985 and of Regularisation introduced in 1986) and Italy (Immigration and Regularisation laws introduced in 1986) appear to have been domestically inspired, since the EC Ad Hoc Group on Immigration was only formed in 1986. The first immigration legislation in Italy was introduced in 1986 (Act No. 943). It aimed at legalising and regulating the situation of ‘third-country migrants’. This Act ended the open doors policy utilised up to that time and legalised the status of migrants by regulating entry, residence, working conditions and family reunion (Daly and Barot, 1999: 41). Act No. 943 did state that migrants should be offered free opportunities to learn Italian, and that courses of native languages, among other facilities, should be made available.4 However, the bulk of the provisions introduced treated


migrants as workers and ‘were intended to protect nationals’ employment from the “unfair” competition from foreigners’ (Zincone, 1999: 49). These prevented ‘third-country migrants’ from moving freely from one kind of job to another and would provide work permits only for jobs where there was a shortage of national labour. It also required migrants to present a regular labour contract. Moreover, ‘the cost of migrant labour was equalised and even made higher in comparison with domestic labour by making employers pay more expensive social security contributions for non-EU alien workers’ (Zincone, 1999: 40). However, no serious efforts were made to curb the illegal employment of foreigners in the underground economy. Fewer than 120,000 were regularised (Reyneri, 1999: 83). As Daly and Barot (1999: 41) note, ‘as the implementation of this act was more concerned with law and order rather than the welfare of immigrants, migrants feared that the purpose of the Act and the amnesty was to establish their identity for eventual deportation’. Furthermore, the majority of the regularised migrants from 1986 gradually dropped into clandestinity. Those regularised in 1990, under the so-called Martelli Law (see below), met a similar fate. In Spain, in 1985, the Foreigners’ Law was introduced which ‘unified hitherto dispersed regulations’. It focused on administrative issues such as entry and residence and work permits, rather than on providing a framework for the social integration of migrants. Its objectives were inter alia: to regulate the entry and residence of foreigners; to take action against clandestine employment; to guarantee acceptable working conditions for foreigners; to tighten the border controls; and strengthen the powers of the police (King and Rodriguez-Melguizo, 1999: 64). Only 44,000 migrants benefited from the first regularisation process in Spain. The law had an implementation deficit due to bureaucratic hurdles and the requirement that migrants must reapply for work and residence permits every time they changed jobs. This forced many of the small minority (10–15 per cent) of migrants who were regularised in 1985 to fall into clandestinity (King and Rodriguez-Melguizo, 1999: 58). Greece moved towards adopting a more restrictive stance in 1991 (law no. 1975) because of a hardening of public opinion towards third-country migrants and the alleged criminality of the Albanians, plus external pressures from the Schengen partners. Law no. 1975, which among other things stipulates measures for the introduction of special squads to patrol the borders, immediate deportation of illegal migrants, heavy penalties for those facilitating entry of undocumented ‘third-country’ migrants and/or their employment, had serious shortcomings. There were problems with its implementation, as these migrants constitute a pool of cheap and exploitable labour in a country where corruption and the black economy thrive. As a result, new legislation was enacted in 2001 (Law no. 2910) and 2002 (Law no. 3013). In addition, there are no sufficient measures aimed at the social, economic and political integration of these migrants, and thus their multiple exploitation and exclusion (Lazaridis, 1996) is facilitated.

Migration 177

Gradually, in all three countries, tough measures were introduced for cracking down on those remaining undocumented and for policing the entry points. The criteria for renewing work and residence permits were also tightened up. However, immigration was kept off the political agenda, except in Italy, where the issue appeared on the political agenda after the assassination of a black migrant in October 1989 in Calabria. By then, the impact of migrant inflows had started to be visible in major cities and in areas near the borders. As Zincone (1999: 50) argues, the lack of accommodation, the consequent squatting by immigrants, the aggressive reactions of the nationals living near the occupied buildings, homeless immigrants subject to aggression by extreme right-wing youngsters, the illegal labour market and people living in brutal conditions were all features of an uneasy situation. Further regularisation was therefore encouraged in 1990 (law no. 39/1990), which required migrants who wished to regularise, only to have lived in Italy the year before. About 220,000 were regularised, the majority of whom were job-seekers (Reyneri, 1999: 83–4). The number of undocumented migrants began to increase again a couple of years later as many entered Italy after the 1990 regularisation and others failed to renew their two-year permit of stay as they lacked regular jobs (ibid.). Furthermore, thousands obtained residence permits as housekeepers (about 15,000 per year); as Mingione and Quassoli (2000: 50) put it, ‘housekeeping became the new way to regularise one’s legal status while remaining in work in the informal sector’. The Martelli Law provided funding for vocational training, language courses, reception centres and recognised professional rights and self-employment of the migrants. At the same time however, it tried to regulate inflows by making visas compulsory for people coming from ‘high emigration risk areas’. However, it kept a human face by introducing asylum for humanitarian reasons (law no. 320/1992), which allowed work, but was a status which could be given or withdrawn by the Italian government at will. In 1995 for example, there were around 55,000 people with this legal status (Zincone, 1999: 51). Another bill, which was introduced in 1994, had provisions for basic health services and public education for undocumented migrants, but was only ratified four years later (see below). In 1995 the Dini government passed a decree to once again provide legal status to undocumented migrants. The third regularisation (1996) was allegedly the ‘largest ever carried out in Europe’, with 256,000 applications filed, 93 per cent of which were approved (Reyneri, 1999: 91). However, the success was overshadowed by the fact that many did not apply because they could not afford the social contributions. Reyneri (ibid.) points out that the 1995–6 regularisation in Italy was problematic because serious structural factors in the Italian labour market encourage the perpetuation


of illegal employment. The 1998 Immigration Act made deportation easier, but at the same time it adopted a ‘soft approach’ to once again regularise undocumented migrants (200,000). It eases, for example, family reunion requirements. In order to control clandestine entries, it foresees the possibility of detention of clandestine migrants in special centres run by voluntary associations such as the Red Cross. It also introduces so-called ‘sponsorship’, whereby Italian citizens, NGOs, local administrations and so on can guarantee and support migrants looking for a job – thus they can obtain a temporary entry permit and five years later apply for a permanent one (Zincone, 1999). In Portugal, under the first regularisation (1992), approximately 38,000 had their status legalised (Corkill and Eaton, 1999: 161). However, it was unsuccessful, since many applicants failed to complete the forms. The second regularisation (1996) was more successful with 39,166 people applying and with a 90 per cent approval rate. Generally, despite the 1992–3 and 1996 regularisations, not all undocumented migrants registered with the Portuguese authorities. This has been attributed largely to their fear of taking the risk and becoming less attractive to employers because of the required social security payments and being liable for tax (ibid.: 158). The phenomenon of illegal immigration continued to persist even after the regularisations, as ‘random controls by the police in public places and labour inspections at the work place are infrequent and ineffective …’ (Baganha, 2000: 85). Spain has had three regularisations so far. Of the 109,000 people regularised in Spain in 1991, only 82,000 remained legally in 1994. Also it has been suggested that a large number of migrants (approximately 300,000) did not apply. The 1996 programme was set up to draw those back into legality who had been granted work permits under the 1991 regularisation but whose work permits had expired. The lack of success of the Italian and Spanish regularisations can be partly explained by access to formal employment being unavailable to undocumented migrants and by the propensity of illegal migrants to self-exploitation which in its turn creates the very demand for their services. Foreign workers are reluctant to regularise their status for fear of losing their competitive edge in the labour market (King and Konjhodzic, 1995: 55). ‘The legalisation of migrants commands little support from the employers of cheap labour, gives no guarantee of continued legal status to the beneficiaries of the programs and allegedly encourages further illegal immigration’ (Baldwin-Edwards, 1998: 508). Until the late 1990s, Greece was very reluctant to introduce a regularisation programme. The government and the various political parties were uncertain as to how to approach migration policy. Fearing the burdens this would impose on the country’s fragile and heavily subsidised social infrastructure, and with a public opinion echoing xenophobia and racist attitudes towards the migrants, Greece was the last to regularise its migrants in the late 1990s (see Table 6.1). The regularisation process and outcome were

Migration 179 Table 6.1 Evolution framework of immigration laws in Southern Europe

Spain Italy Greece Portugal

1984

1985

1986

A

I

R I/R

1993 Spain Italy Greece Portugal*

1994

1995

1987

1988

1989

1991

1992

R I/R/A I 1996

A R

1997

1998

1999

A R 2000

2001–2

I/R R

I/A

1990

R

R

R

Note: A ⫽ Asylum law; I ⫽ Immigration law; R ⫽ Regularisation law. * At the time of writing Portugal was undergoing a third Regularisation. Source: Baldwin-Edwards (1998).

not very successful. The problems connected with the regularisation programmes include the following. On the one hand, migrants continued to enter the region illegally hoping that at some point in the future they would be legalised. On the other hand, many migrants either dropped back into clandestinity, or declined to regularise themselves because of fears of losing their competitive edge by becoming less attractive to employers who wanted to continue to exploit them. They also feared losing their jobs or not being able to find other work if liable to the provisions of proper job contracts or entitled to social security benefits and the minimum wage stipulated in the EU’s social chapter to which Greece is a signatory. Moreover, there were problems with the administrative procedures through which migrants can regularise. Such procedures are so complicated that they often leave migrants disoriented with regard to citizenship rights and the resources to which they are entitled. In both Italy and in Greece, migrants seem convinced that they cannot interact productively and fruitfully with the bureaucrats working in public offices and services; information is difficult to obtain, and when obtained often incomprehensible. Migrants trying to regularise their status are often expected to put together a plethora of documents, a task which has given rise to a wide range of consultant agencies often ‘helping’ clandestinely, thus creating the conditions for the production and reproduction of informal practices (Mingione and Quassoli, 2000; Lazaridis and Poyago-Theotoky, 1999). As more and more migrants become regularised, their readiness to accept working conditions unacceptable to the locals is likely to gradually diminish. At the same time, the rudimentary welfare states in all four countries rely on family and community networks as well as particularistic forms of solidarity, all of which exclude outsiders. ‘Since social services are increasingly


expensive, the costs of such solidarity grow endlessly and the view that it should be reserved for persons seen to be “alike”, not to outsiders … becomes increasingly widespread’ (Reyneri, 1999: 103). In addition to the regularisations, a number of ad hoc measures are occasionally introduced such as forced repatriation for the crisis management of migrant flows. The notorious so-called ‘sweeping operations’ have become common in Greece whenever the Greek and Albanian governments are at odds with each other; the number of expulsions for 1994 was estimated to be approximately 150,000 Albanians. Meanwhile, the number of migrants increases. As BaldwinEdwards (1999: 10–11) notes, There seem to be inconsistencies between the severity of immigration control and the laxity of labour market regulation. This, combined with high social insurance and tax obligations for both employers and workers, seems to have created not so much opportunity for illegality but even its very necessity for economic survival. Up till now, annual quotas, tight immigration controls and restrictive permit-granting have kept legal migrants out but have opened up a lucrative market in the trafficking of migrants. This, however, bears a social cost with an increased risk of criminality for survival, and the very high cost of policing which is open to corruption. In this environment, the migrants’ welfare needs are scarcely considered. However, family reunion and family migration are already taking place which put pressure on governments to reconsider the openly exclusionary policies implemented so far (for example, national citizenship requirements; social citizenship rights). However, the borders of the nation-state are not only policed against undesirable ‘others’ in formal ways, through migration controls. The desire to exclude ‘others’ is also manifested through racism, that is ‘forms of ideology and practice that serve to inferiorise and exclude (or include in subordinate positions) all groups whose boundary is defined in terms of an ethnic or collective origin’ (Anthias, 1992). Other forms of the exclusionary face of the ethnic phenomena are to be found in ethnocentrism and xenophobia (Anthias and Lazaridis, 1999a). Signs of xenophobia and racism/s seem to be spreading throughout Southern Europe. The expression of racism against ‘third-country migrants’ takes personal and individual as well as institutional forms (Daly and Barot, 1999: 46). Various stereotypes are often used to stigmatise and inferiorise the ‘other’ and present the migrants as ‘the problem’ (for Greece, see Lazaridis and Wickens, 1999; for Italy, see Daly and Barot, 1999). As shown above, institutional racism and discrimination against ethnic minority groups in the labour market and in welfare provision is widespread. According to a Eurostat survey, a net majority of the population feels that there are too many non-EU migrants (Baldwin-Edwards and Schain, 1994: 1). According to a poll in Greece, 72.5 per cent of the population think that the state

Migration 181

should prohibit the entrance and the employment of foreign workers (Ta Nea 31 May 1995: 22). Intolerance has often been expressed in violent terms – an example being the attack on a Tunisian migrant in Italy in 1994 by Nazi skinheads (Daly and Barot, 1999: 47) and the assassination of a black migrant in October 1989 in Calabria. In Portugal there were clashes between migrants and local young people in 1993. Two years later, we have the murder of a young Cape Verdean by a gang of ‘skinheads’ (Corkill and Eaton, 1999: 160). Such episodes have been justified in terms of the need to ‘protect the national culture and heritage’ or ‘the innocent victims from undeserved attacks’. The media is instrumental in terms of orchestrating ‘moral panic’ via amplification of crimes allegedly committed by migrant groups (for Greece, see Lazaridis and Wickens, 1999). Although one has to look specifically at the racialisation of specific ethnic minority groups (for example, Albanians in Greece, Tunisians in Italy, Moroccans in Spain, etc.), we cannot do this in the space available here. It is however worth mentioning that this process is gender specific in that Filipino women have become stereotyped as domestic workers (Lazaridis, 2000a) a necessary accessory for any household that can afford them. Ukrainian and Russian women, on the other hand are stereotyped as high-class prostitutes (Lazaridis, 2001). Albanian men in Greece and Moroccan men in Spain (Lazaridis and Wickens, 1999; King and Rodriguez-Melguizo, 1999) have been stereotyped as untrustworthy, dishonest, criminals. These negative stereotypes mean that targeted groups face more difficulties than other ‘others’ when trying to become included within the host society. Hence, as King and RodriguezMelguizo (1999: 78) rightly argue, ‘when the social exclusion of [these migrants] is discussed, the debate must involve not only the standard material and welfare parameters of this exclusion – housing, work, social services, spatial segregation, etc. – but also include their right to a public image which is a fair and accurate.’ Southern Europe has not been an eldorado for political refugees either. In the 1990s, the number of asylum applications dropped considerably (see Figures 6.2 and 6.3). An exception is Italy, where we have a sudden rise in asylum applications in 1991 due to the fact that the geographical limitation to the 1951 Convention was withdrawn and it began to receive asylum seekers from Eastern Europe and other parts of the world (see Figure 6.2). The decrease in applications that followed is the result of legal reforms that made the process of application for asylum more difficult. Regarding the national origin of refugees, there are considerable variations among the Southern European countries. Refugees in Greece come mainly from Iran, Iraq and Turkey. Italy receives refugees from these countries too, but also from Eastern Europe, whereas the majority of applications in Spain are from Latin America (Cuba and Peru) and Africa (Equatorial Guinea, Algeria, Zaire) (see Figure 6.3). Finally, Portugal receives a comparatively smaller number of refugees than Italy, Spain and Greece

182 30,000 25,000 20,000 15,000 10,000 5,000

Greece

Portugal

Italy

96 19

95 19

94 19

93 19

92 19

91 19

90 19

89 19

88 19

19

87

0

Spain

Figure 6.2 Asylum applications in Southern Europe, 1987–96 Sources: UNHCR (1997: Table 13); for Italy: Caritas di Roma (1996); for Spain: Comision Interministerial de Extranjeria (1993: 59–69).

Greece

Spain

Portugal

Italy

Iran (Islamic Republic of) Armenia Romania Cuba

Iraq Algeria

Liberia

Nigeria

Turkey

Figure 6.3 National origin of asylum applicants in Southern Europe for 1996 (Principal national groups) Source: UNHCR (1997b: Tables 3, 14, 15).

Migration 183 Table 6.2 Population of refugees in Southern Europe, 1995–6 Refugees end 1995 Total Greece Italy Spain Portugal

4,500 80,141 12,775 1,440

Assisted 0 0 0 820

Refugees end 1996 Total

Assisted

5,780 71,630 5,685 248

3,167 N/A N/A N/A

Source: UNHCR (1997c).

(see Table 6.2). One of course should add to these numbers those people enjoying temporary protection. For example, Italy shelters approximately 12,000 refugees recognised under the 1951 Convention, in addition to 50,000 from former Yugoslavia and about 10,000 from Somalia, all of whom have been granted temporary protection. Some remain at reception camps and refugee centres intended to offer temporary accommodation. In all four countries, refugee status allows access to health services, residence and work permits, and state schools for the children of refugees. New legislation that took effect in most South European countries in the 1990s (in 1990 in Italy, in 1994 in Spain and in 1995 in Greece) introduced accelerated admissibility procedures, aimed at identifying the unfounded applications. All Southern European countries have problems with bureaucratic procedures, as the protection afforded to applicants is relatively minimal. In the case of Greece, there are the so-called ‘tolerated refugees’, who are classed as illegal migrants and deprived of the possibility to apply under the new procedures because of their long-term residence in Greece. It has been suggested by police authorities that 75 per cent of refused asylum seekers remain illegally in the country. Naturalisation of foreigners provides the only secure means for their full incorporation into the host society and polity. Portugal has a tradition resembling the British ius soli. Italy, Greece and Spain rely heavily on ius sanguinis, that is nationality by descent. This has implications for the descendants of migrants’ families since it denies them straightforward access to citizenship. Naturalisation is difficult because the set conditions include: linguistic ability; proof of civic incorporation; and lawful residence. Naturalisation rates were remarkably low in the early 1990s and access to citizenship became even more difficult into the 1990s. Early in that decade, Greece, Italy and Portugal increased the residence period from eight, five and six years respectively to ten years, thus making the incorporation of third-country migrants into society very difficult. Hence we have the creation of an ‘asymmetrical policy creation – that is, control of immigrants without a corresponding development of immigrants’ rights’ (Baldwin-Edwards, 1998: 513).


The effect of this has been to ‘modernise immigration policy at the cost of dehumanising it’ (ibid.). This is not helped by the fact that there has been little political debate on immigration at a time when racial tensions are emerging in fear of recognition of multi-cultural values. Despite the fact that integration policies are still in an embryonic form, migrant communities in Southern Europe ‘are not completely excluded from all areas of society and all social benefits’ (King and RodriguezMelguizo, 1999: 66). Regularised migrants are entitled to make use of public services such as health and education, as well as social protection. Migrants’ associations and non-profit organisations, as well as religious bodies, play a significant role in the provision of assistance to undocumented migrants. In Spain, for example, non-profit organisations such as Caritas, Cruz Roja, etc., offer services such as accommodation, childcare, legal advice and the like. In Greece, Caritas, the Red Cross and various migrants’ ethnic associations, offer similar support. The development of integration policies encounters obstacles due to administrative inexperience and corruption. For example, as Zincone (1999: 64) notes, ‘some employees of the Italian consulate in Nigeria are being investigated for allegedly selling visas’. In January 2000 there were reports in the Greek media about the police turning a blind eye when adequately rewarded. Social and political rights are being ‘informalised’ (ibid.), that is used by people not fully entitled to them. This is evident in the provision of social services. In Italy, for example, temporary public lodgings provided by city administrators are used by poor migrants as their stable residences. In Greece, doctors and hospitals turn a blind eye and provide illegal migrants with care under the heading of emergency care. Voluntary associations and other low-level pressure groups, such as unions and the church, provide migrants with financial help and assist them in gaining access to public services. Southern Europe must move towards an integration model that respects both equality of rights and treatment, and differences in culture, religious faith, etc. There are, however, differences between the four countries. Italy is perhaps the one moving more rapidly into an integration model. Greece is still maintaining a separation or exclusion model, at least in practice. There is also a gap between what is available in theory and what is actually done to help these migrants. Socio-political pressures, coupled with pressures from the EU, will oblige these countries to move towards stricter regimes of control against migrants and thus strengthen the Southern walls of Fortress Europe. In the following section we shall turn to the theme of retirement migration, which is an important feature of intra-EU migration, and consider ways in which Northern Europeans who migrate to Southern Europe after retirement experience exclusion, and the pressures these individuals put on the existing fragile welfare states of the host countries.

Migration 185

Northern Europeans in Southern Europe: the case of retirement migration Flows of elderly North-western Europeans (British, Dutch, Germans, Scandinavians) into Southern Europe have, over the last 20–30 years, become an important form of intra-European geographical mobility. Research has been carried out on those now residing in Spain, Italy and Portugal from a number of perspectives (for example, Williams, King and Warnes, 1997; Betty and Cahill, 1997 and 1999; O’Reilly, 1995; Champion and King, 1993; Harbert, 1993). However, attention to such migrants in Greece has been restricted to one small-scale study on retirement migration in Corfu (Lazaridis, King and Poyago-Theotoky, 1999). Retirement migration into Greece is an important phenomenon, especially on islands such as Corfu, which, like better-known Spanish resorts, experienced a boom in ‘residential tourism’ during the 1970s and 1980s. The retirement aspect of this general phenomenon is interesting in itself, and is of considerable importance to policy-makers, as it may intensify pressures on existing social and health care costs (Williams, King and Warnes, 1997: 115). It is to this that we will now turn our attention. Recent studies on the scale and distribution of retirement migration have shown that there are substantial numbers5 of older European residents in regions like the Algarve, the Balearic and Canary islands, Tuscany, the Costa del Sol, and on various Greek islands. Because of free movement within the EU, numbers are very difficult to estimate. While no comprehensive data is available,6 recent estimates suggest that during the last 15 years there has been a rapid increase of, and therefore an accumulation of retired migrants from Northern Europe in Southern European countries which approximates the figure of 1.5–2 million. One of the main reasons, however, for the poor understanding of retirement migration from North to South and the lack of any reliable estimates of its magnitude, is difficulty of definition. As Williams, King and Warnes (1997: 117) put it, ‘the permanently settled emigrant is at one extreme of a continuum that shades via seasonal migration and second-home ownership to early-retirement, long-stay tourism’. There are also the lifetime expatriates, who after many years abroad, prefer to spend their retirement in Southern Europe rather than return to their country of origin, where their ties (financial and emotional) may have weakened over the years.7 Other reasons for serious data inadequacies include: disparities between the limited statistical data available from British Consuls in the host countries and actual numbers found ‘on the ground’ during fieldwork (for the Greek case,8 see Lazaridis, King and Poyago-Theotoky, 1999). In addition, under the provisions of the Treaty of Rome, the Single European Act of 1986 and the Maastricht Treaty, citizens of the European Union have the right to enter, buy property and reside in any member state. There are no checks at


the borders. It is therefore very difficult for any embassy to keep track of the numbers of people coming in and out of Italy, Spain, Portugal or Greece as consulate registration is no longer obligatory. Moreover, as mentioned by Lazaridis, King and Poyago-Theotoky (ibid.), desire to avoid complicated administrative procedures that can be time-consuming and unclear, may induce settlers to remain unregistered. Indeed, both in Tuscany and in Corfu, many retired migrants mentioned the frustrating and slow-moving bureaucracy (King and Patterson, 1998; Lazaridis, King and PoyagoTheotoky, 1999). Although they come from a wide range of occupational and status groups,9 most (although not all) migrants are ‘young elderly’ married couples with above average income and are thus able to pursue high levels of social and recreational activities during retirement. A second home, bought 20 or 30 years earlier, often (although not always) paves the way for retirement in a Southern European location. The decision to migrate can be affected by a number of factors in addition to the search for a good climate and a relaxed lifestyle in an idyllic setting. These include socio-economic influences such as cheaper housing prices and the lower cost of living in the South. Some invest in old rural dwellings in need of refurbishment – this is common practice in places like Tuscany (King and Paterson, 1998) and Corfu (Lazaridis and Poyago-Theotoky, 1999) – whereas others, especially those who retire in the Balearic Islands, tend to live in specially built residential estates (Williams, King and Warnes, 1997). Increases in life expectancy in recent decades and the resulting increase in the proportion of the economically inactive elderly in the South, coupled with increased levels of dependency, can have potentially serious implications for the Southern European welfare systems. When physical fragility becomes a problem, the limitations of medical and other forms of care often induce a reassessment of the situation. When these people move into Southern Europe, they move from ‘generous’ forms of welfare which tend to socialise the costs of dependency through the provision of income support, residential care and public health care, to societies which have adopted a more ‘residual’ or ‘rudimentary’ approach to welfare provision, where the emphasis is on the family as the core unit of social care. At the same time they move away from potential sources of informal care (close family and friends). Hence, when they become frail, some (especially those who have kept familial and kin ties alive) decide to return to their former country of residence. This alleviates part of the burden on health and care services available for the host country’s elderly population. Others, however, decide to stay. Increasing frailty as people approach their late 70s and 80s demands higher level health care, adaptation of housing circumstances, restrictions in mobility, etc. Moving to a sheltered house is not an option for those who have migrated to Southern Europe, as such services barely exist.

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Lacking easy access to immediate family potential care-givers, the retired migrants tend to rely on networks of ‘new’ friends and neighbours or on voluntary work by non-profit organisations and migrants’ associations. Those with a sizeable income can purchase nursing, or the services of a live-in maid – most of the women available are ‘third-country’ migrants. There is a high concentration of retired migrants in specific regions of Southern Europe. In some locations, like Tuscany, Andalucia and the Algarve, they are widely distributed throughout rural areas. In other locations, such as the urbanisaciones (residential estates) on the Spanish coast, they form expatriate enclaves, where contact with the host society is minimal. In such enclaves, retired migrants form organised social clubs. In the Costa del Sol, for example, there are around 100 such organisations, which have developed to cater to the needs of elderly expatriates. There are also many social and voluntary groups in Costa Blanca and in the Balearics, which provide a framework in which friendship links can be made, social activities organised and information provided on local and national taxation, local municipal laws and social services (Betty and Cahill, 1997). The British Legion, for example, has developed voluntary welfare services (including assistance in medical emergencies) in the provinces of Alicante, Malaga and Valencia. These services complement or supplement those provided by the Spanish social security system (ibid.: 10). Another voluntary group mentioned by Betty and Cahill (1997) is HELP, which is dedicated primarily to English-speaking people residing on the Alicante coastline. Its activities range from organising loans of wheelchairs and bedpans, to visiting sick people at home or hospital, identifying people in need of home care, liaising with medical and social services, helping with transport, shopping, etc. Yet another group is Age Concern, who have established a branch in Malaga and oversee the social and welfare needs of older British migrants in Spain. To quote Betty and Cahill (1997: 12), ‘the voluntary organisations providing welfare … provide a haven for older people unable or unwilling to learn the Spanish language, or to become closely involved in the local community’. However, these clubs can also become a barrier to integration into the host society, as they are often exclusive, that is they do not encourage members of the host country to join in. Although individual experiences naturally vary, unlike in areas where there is a spatial dispersion of retirees (such as Tuscany, Corfu), many retirees who live in enclaves (especially in Spain and Portugal) are perhaps not so preoccupied with questions of integration.10 Enclavism is a voluntary strategy; ‘it provides a readily accessible set of overlapping formal and informal social networks amongst highly visible expatriate communities’ (King, Warnes and Williams, 1998: 105). With regard to health care, Northern Europeans who retire in Southern European member states of the EU are entitled to full primary and secondary health care. However, social service provision in Southern Europe tends to be inadequate, thus creating a group of disadvantaged third-age individuals.


Care in state and private homes is rather limited. Betty and Cahill (1999: 94) note that in the municipality of Benalmadena (Andalucia) for example, there are only five homes, all privately run, which provide residential and home care to foreigners. A number of entrepreneurs have organised home care and nursing care for those who are able to afford to buy their services, but there is no one to supervise the quality of services provided. Those migrants with few financial resources cannot utilise private care services. Some therefore, return to the country of origin. Of course, language problems constitute a major problem in negotiations with local social and health services, against whom retirees often feel powerless and disadvantaged. A further layer of exclusion is produced by migrants’ inability to manipulate local patronage systems and the culture of ‘gifts’ (Lazaridis, King and Poyago-Theotoky, 1999). Nevertheless, during the last few years, British volunteers, in collaboration with Dutch, Scandinavian and Spanish people, have been engaged in fundraising activities. On the Costa del Sol, for example, a group of older British women has begun raising funds for a 12-bed hospice, ‘the first of its kind in Spain’ (Betty and Cahill, 1997: 20). Such processes of coalition-building among different nationalities around issues of care, may be capable of carving out spaces of control in favour of the retirees. In Corfu (Lazaridis, King and Poyago-Theotoky, 1999), there are two residential homes, one privately owned by the Catholic (Maltese) nuns and one state-owned. However, there is no home care or nursing care offered, apart from domestic workers available to those who can afford to buy such services. The reputation of the state-owned home is not good with regard to the quality of services offered. As in Spain, the outlook for pensioners who cannot afford to utilise private services is bleak (ibid.). Social service provision is inadequate, with a limited number of unqualified social workers on the island. There is lack of home-based care services for the elderly, which largely reflects the emphasis on the family in caring for elderly relatives in Greece. Unlike Spain, however, where the Catholic Church provides a significant amount of social welfare through organisations such as Caritas, in Greece the vast majority of care-providers are women. These are either members of the immediate family and hence provide caring and nurturing functions free of charge, or ‘third-country’ migrant women who are employed by the immediate families to provide these functions. To conclude, unlike less economically advantaged third-country migrants, the retired EU migrants are welcomed by the Southern European governments. They come from countries within ‘Fortress Europe’, are ‘one of us’, and have no problems with the immigration authorities. They are in possession of full civil rights, enjoy some political rights (the right to vote was granted to them under the provisions of the Maastricht Treaty) but in the area of social citizenship there are problems. In member states where resources are limited and facilities overstretched, they are presented with challenges additional to those of growing old and frail in a foreign land.

Migration 189

Expectations about access to home care, day care, particularly community care, so familiar in most ‘generous’ welfare traditions, are not shared by Southern Europeans. Southern European countries do not have the same levels of residential and domiciliary care that, for example, the state in Britain or the Netherlands or Germany is likely to provide. The private and voluntary sectors play an important role in the delivery of home care and residential services for older migrants. The emphasis here however, is upon payment for services. There may therefore be a growth in private sector care in residential homes and domiciliary care for those who remain in Southern Europe in their final years. Moreover, although this category of migrants is placed differently from ‘third-country’ migrants both economically and legally and in relation to the polity, their migration is often accompanied by exclusion from some social and political rights. For example, residence in another country disqualifies a person from many entitlements that one would receive in his/her own country (for example, public assistance with residential or nursing home fees). Despite, therefore, their apparent advantageous position, they are in fact disadvantaged in terms of gaining access or inclusion within a range of arenas in society that determine life chances. The prospect of a rapid growth in the number of expatriate and thirdcountry older people in Southern Europe renders imperative that attention be paid to their distinctive, culturally influenced problems, and their increasing levels of unmet needs for health and social service support. Guidance is necessary on service development aimed at promoting better treatment, care and support of retired migrants with functional limitations and making a contribution to raising their activity levels, capacity for selfcare, independence and hence their quality of life. Of course the retired migrants are of diverse income and socio-economic backgrounds. Nevertheless, as we argued above, they experience discrimination and exclusion from services and are subject to structural disadvantages in terms of qualified eligibility to income support and various benefits and types of care. Welfare organisations and elected representatives must be made aware of their unfavourable circumstances.

Concluding remarks In this chapter we looked at two groups of migrants: retired citizens of Northern member states who move to Southern Europe for a better climate, a healthier lifestyle and a better standard of living. We also looked at economic migrants who migrate in order to work in the informal economy, principally but not exclusively in the tertiary sector. We have shown that ‘third-country’ migrants are incorporated into certain areas of Southern European societies, such as the labour market, but are denied access to others, such as welfare systems and political participation.


Such exclusion is the result of formal mechanisms (the legal framework and administrative rules) as well as racism and discrimination. ‘Third-country’ migrants are marginalised, not necessarily or solely because of their phenotypical characteristics, but also because of their ethnic differences and immigrant status. The social costs of long-term settlement have yet to be seen, as immigration into Southern Europe is a relatively new phenomenon. Most migration theory, research and policy-making have been concerned with labour migration and the pressing problems associated with refugees and asylum seekers. Retirement migration is caught in the web of ‘free movement’ and ‘non-discrimination’ principles and hence there is little recognition of the difficulties and disadvantages among older expatriates. Migration policies recently developed do not reflect the social welfare realities associated with the needs of a heterogeneous population that migrate for retirement within the EU. These people constitute migration flows away from countries with highly developed welfare systems with generous universal forms of welfare provision into countries which have adopted a less generous, rudimentary approach to welfare provision, characterised by the dominance of informal family care as the core unit of social care. At the same time they are moving away from networks of solidarity which are potential sources of informal care such as families and close friends. Caring responsibilities towards elderly dependents become even more problematic when it comes to elderly women, particularly widows living alone without access to spousal care in many cases. Access to income support and to welfare depends on private means and on the social policies of the host country. Immigration issues have raised awkward questions about Southern European attitudes to foreigners and have challenged the idea of racial tolerance. Until recently Southern Europeans would emphatically claim that ‘racism does not exist in the South’. This self-perception is deeply rooted in the region’s past history of open borders and hospitality towards visitors. It has gradually however, begun to be undermined. One of the most pressing questions remaining is that of the possibility of transformative politics, for organisation and coalition-building across different classes, ethnic groups and nationalities, aimed at carving out space of control for themselves in the face of growing racism and exclusionary practices in Southern Europe. Coalition-building amongst different ethnic minority groups around issues of acquisition of social and political citizenship rights needs to be explored by migrant groups and their associations. To paraphrase Phizacklea (1998: 27) alliances must be built and ‘in the process the seemingly “powerless”’ must ‘mobilise resources and secure “spaces” of control, however limited these spaces may sometimes seem’.

7 Concluding Considerations: Are Southerners Becoming More European than Southern?

The argument put forward in this book is that the welfare systems of Italy, Greece, Portugal and Spain share all the basic institutional characteristics of the ‘state-corporatist’ welfare model. As mentioned in Chapter 1, this type of welfare state is a ‘distribution state’, mainly financed by the contributions of employers and employees in work-based insurance schemes and characterised by social transfers in cash, related to earnings; the entitlement to social rights is founded on someone’s social status and work performance. However, the overall underdevelopment of the welfare state in the aforementioned Southern European countries, together with a number of similarities in their social structures and economic trajectories, clearly classifies them in a distinctive sub-category of the above model. In other words, the ‘Southerners’ represent a distinct group, a variant within the family of the Continental welfare states. The four countries share some characteristics, such as similar structures of social and economic development, the relative inefficiency of the social protection systems and some comparable social and family structures. Despite these similarities, we argue that two clusters are discernible even within the group of the Southern European countries, one consisting of the Iberian countries and the other of Italy and Greece. Their different historical traditions and economic trajectories, and the dissimilar weight of patronage and clientelism, which is much stronger in the latter two countries, are amongst the main factors of this differentiation. Of course, many factors of differentiation exist even within these clusters. For instance, regarding female employment, Portugal’s, score is clearly distinct from all the other countries concerned. The model of economic development followed by all Southern European member states of the EU is characterised by late industrialisation, followed by the transition to post-Fordism well before Fordist production structures were fully developed. In this framework, the persistence of traditional 191


agrarian social arrangements and relatively high numbers of small-scale units relying largely on flexible use of family labour, is concomitant with the expansion of employment in the service sector. Although in all four countries there is a strong ideological commitment to the family, family state support is minimal, with the possible exception, recently, of Portugal. The privileged treatment of traditional family arrangements and the meagre development of public childcare services maintain the traditional patriarchal family relations and a division of labour where men function as the family breadwinners and women as the family carers. However, in all four countries, the way in which women allocate their time has changed over the years. They are spending less time on child-bearing and rearing, as large numbers of women have entered into the labour market, especially since the 1970s; the caring roles have to a large extent been undertaken by ‘other’ women, be it unpaid family members or paid migrant domestic workers. This process, together with changes in family values, may gradually lead to changes in the gender regimes of the respective countries, in particular, but not only, in large urban centres. Alternatively, we may see a backlash, due to the high unemployment rates affecting women. Three more aspects are particularly relevant to the social and economic systems of Southern Europe. First, the size of the public sector and its relation to traditional and new forms of clientelistic policies, especially in Greece and Italy. Second, the presence of a huge informal economy. And third, increased labour market segmentation, reinforced by the informalisation of the economy. Individual and group access to clientelistic networks does not favour institutionalised collective solidarity. This results in the strengthening of the role of the family as a strategic unit of social support, especially in Greece and in southern Italy. We have argued that familism is a key component of the clientelistic forms of social organisation in Southern Europe. On the other hand, in Greece, Italy and Spain, the highly politicised and conflictual character of industrial relations limits the possibility of broad social arrangements on policy reform. Still, regarding social dialogue, as we have shown, a re-emergence of concertation took place in Italy (interrupted after Beclusconi’s victory in the elections) and Portugal in the 1990s, with wide-ranging social agreements leading to reforms in working conditions, welfare provision, etc. In Spain, on the other hand, social concertation slowed down despite the attempts made to promote social pacts. Moreover, all Southern European countries have been especially influenced by the recession of the two last decades. In all four countries various legal measures introducing various types of flexibility in a labour market were highly heterogeneous and fragmented, thus creating cohorts of marginalisation and different forms and degrees of exclusion. Regarding the scope of the social protection system, in Italy and Greece – but not in Spain and Portugal – the bulk of income transfer is absorbed by old age pensions and to a lesser degree, invalidity pensions. (Often the

Concluding Considerations 193

latter are (mis)used as assistance benefits, thus increasing their duration.) Due to the fragmentation of the social insurance units and the plethora of related schemes, especially in Greece and Italy, there is a considerable divergence of the benefits paid to different categories of the retired population. As we have shown, pension fund deficits and debt accumulation of public pension schemes have resulted in pension reforms in all four countries, introducing major changes in the structural characteristics of the social protection systems, preventing early retirement, reducing benefit revaluation and raising the retirement age. Emphasis has been placed on reductions in pension generosity, the homogenisation of pension arrangements and the abolition of the privileges of special categories. The existence of universal, tax-financed national health systems represents a particularity in social protection systems based on the insurance principle. Even in this domain there are elements of divergence among the Southern European countries, especially in fields where work status still determines the level of some of the services provided and heterogeneity of coverage. Finally, we also examined the potential influence of migration to the social protection system. This is important because within the matrix of the global map of international population movements, new flows of migrants (especially undocumented migrants and retired Europeans seeking a haven in the sun), are exerting new pressure on the welfare states of Southern European societies. A question one could ask after the examination of the social security system of the Southern member states of the EU is related to their convergence or divergence with regard to the core countries of the Continental-corporatist model. In other words, will the ‘southern syndrome of irrationality, inefficiency and vested interests’ (Rhodes, 1997a: 15) dominate in the foreseeable future the social protection systems in these countries? It is not easy to give a prognosis; Italy, Greece, Portugal and Spain may belong to a family of nations (Ferrera, 1996: 18), but there are many differences between these four countries. We have tried to illustrate in previous chapters the historical and institutional features that have differentiated the Iberian countries from Italy and Greece. There are sectors, such as employment, where different economic factors have resulted in policies which make it impossible to put all four countries in the same cluster. Moreover, Italy differs clearly from the other three countries, because of its more mature economy (especially in the North) and the earlier establishment of its welfare state. In addition, not only do Spain and Italy have a much higher economic potential than Portugal and Greece, but they include also regions like Piemonte, Lombardia, Emilia Romana, Cataluna and Navarra, where the pacing of economic development is comparable, or even higher than that of Central Europe.1 For all these reasons, a general prediction on the future of all the Southern European social security systems is not safe, or even possible. However, there are still a number of common features that interrelate these countries. Among them, of major importance,


especially for Spain, Portugal and Greece, is the effort made towards modernisation, as a response to the challenges they were faced with prior to and after their accession to the European Community.

The impact of the European unification The influence of the European Union on the social protection systems of its Southern European member states is multi-faceted. The social policy of the EU per se has played a rather limited role on the development of the institutional framework of the welfare states of the Southern European countries, as the overall structure and organisation of social security remains under the responsibility of the member states (Sissouras and Amitsis, 1994). Besides, the principal aim of the European social policy had never been the overall harmonisation of the social policies of the member states, but rather the co-ordination of social security schemes addressed to migrant workers and the setting of ‘minimal models’ and ‘standards’ in order to avoid the alleged ‘social dumping’ and to conserve the cohesion of the Union in the process of EMU. Still, in 1992 the Council presented a Recommendation on the convergence of social protection objectives and policies (Official Journal L 245, 26 August 1992), which determined a ‘convergence strategy’, with the focus on identifying common goals, but leaving member states free to determine how their system is to be financed and organised. In 1997 the European Commission presented its communication on Modernising and improving social protection in the European Union (COM[97] 102 final) demonstrating that social protection should not be considered a financial burden but rather a factor for economic progress. Two years later, in its communication A concerted strategy for modernising social protection (COM[99] 347 final of 14 July 1999) it proposed a new process of co-operation. This debate led to a consensus in the Lisbon Summit of 2000 for modernising the European social model, investing in human resources and combating social exclusion. The new strategy is designed to enable the European Union to regain the conditions for full employment, and to strengthen regional cohesion in the Union. Implementing this strategy will be achieved by improving the existing processes, introducing a new open method of co-ordination at all levels, coupled with a stronger guiding and co-ordinating role for the European Council, in order to ensure more coherent strategic direction and effective monitoring of progress. However, these goals have not, until now, given tangible results to the national social policies of Southern Europe. Moreover, the process of the EMU has exerted a pressure, especially on the weaker economies,2 towards the retrenchment of social expenses, as the criteria thresholds of article 109 of Treaty of the European Union3 have become the basic state priorities. There is some evidence that the gap between the Southern European countries and the EU regarding social care and especially health care in the

Concluding Considerations 195

1980s and 1990s is narrowing. However, the exhaustion of public resources in the period of recession and the pressure for maintaining the standards of the European Monetary Union do not permit us to be over-optimistic. Southerners are receiving huge amounts of money from the Union’s regional and cohesion funds, that are meant to balance ‘integrational damages’ and help regional growth in the poorer countries (Greece, Spain, Portugal) (see Table 7.1; Leibfried, 1993a: 8). Nevertheless, in order to have a measure of comparison, it is worth remembering that the German government has committed seven times the total of structural funds for the integration of the new Länder. In addition, taking into account the relatively greater participation of the primary sector to GDP in those countries, the subsidies received in the framework of the Common Agricultural Policy are proportionally inferior to those received by the Northern countries and, especially, France (OKE, 1999: 25). On the other hand, the influence of the European integration has also favoured the trends of convergence and adaptation of the Southern Table 7.1 Structural funds and the European South Million ECUs received Greece Spain Portugal

Percentage of total

2,643.7 6,376.8 2,941.5

10.2 24.5 11.3

Source: OKE (1999).

Table 7.2 Public debt in the EU, as a percentage EMU criteria ⫽ 60 per cent of GDP 1991

1992

1993

1994

1995

1996

1997

1998

1999

Luxembourg 4.9 UK 35.8 Finland – Ireland 97.0 Denmark 64.6 Portugal 69.4 France 35.5 Germany 42.1 Austria – Spain 45.2 Netherlands 79.0 Sweden – Greece 86.1 Belgium 133.6 Italy 101.2

5.8 41.7 – 94.5 68.8 61.7 39.4 44.8 – 48.2 79.7 – 92.3 135.1 108.2

6.8 48.2 – 99.0 80.4 66.6 43.9 48.9 – 55.9 81.2 – 115.2 142.2 118.3

7.9 50.5 – 93.1 82.2 70.2 48.1 53.6 – 61.4 82.2 – 116.8 142.6 123.3

5.9 53.8 52.5 82.2 73.8 66.5 52.5 58.0 69.3 65.3 79.1 78.2 111.3 131.2 124.4

6.6 54.4 55.7 72.2 71.6 65.6 55.7 60.4 69.5 70.1 77.2 77.8 112.6 126.9 123.8

6.7 53.4 55.8 66.3 65.1 62.0 58.0 61.3 66.1 68.8 72.1 76.6 108.7 122.2 121.6

7.1 52.3 53.6 59.5 59.5 60.0 58.1 61.2 64.7 67.4 70.0 74.1 107.7 118.1 118.1

7.6 50.9 52.3 52.6 55.3 58.0 58.2 60.7 63.6 65.8 67.7 70.0 104.5 114.2 114.3

Sources: Greek General Budget (1998; 1999); Eurostat (1999b).

196 Southern European Welfare States Table 7.3 Public deficit as a percentage of GDP EMU criteria ⫽ 3 per cent of GDP 1995 Austria Belgium France Finland Sweden Denmark Germany Greece UK Ireland Spain Italy Luxembourg Netherlands Portugal

5.0 3.9 5.0 5.0 7.1 2.4 3.3 9.8 5.5 2.1 7.3 8.0 ⫺2.0 4.0 5.8

1996 3.8 3.2 4.1 3.1 3.7 0.8 3.4 7.6 4.9 0.4 4.7 6.8 ⫺2.6 2.3 3.2

1997 2.5 2.1 3.0 0.9 0.8 ⫺0.7 2.7 4.0 1.9 ⫺0.9 2.6 2.7 ⫺1.7 1.4 2.5

1998

1999

2.3 1.7 2.9 ⫺0.3 ⫺0.5 ⫺1.1 2.5 2.2 0.6 ⫺1.1 2.2 2.5 ⫺1.0 1.6 2.2

2.2 1.4 2.6 ⫺0.6 0.9 ⫺1.7 2.0 2.0 0.3 ⫺1.9 1.9 2.0 ⫺0.6 1.2 1.9

Sources: Greek General Budget (1998; 1999); Eurostat (1999b).

member states to the minimum standards, if not the institutional patterns of the other Continental states. This tendency is illustrated by the gradual introduction of timid universal non-contributory public assistance schemes, the semi-universalistic national health systems, the steady efforts to improve coverage of social insurance, etc. At the economic level the distance between the European South and the rest of the EU countries seems to be narrowing, as there is a general (although not linear) trend of convergence, both with regard to the social expenditure and the GDP. The coefficient of variation in the ratio of social expenditure to GDP diminished over the last decade in the EU from an average of 0.25 in 1980 to only 0.15 in 1991 (Commission of the European Communities, 1993: 43). This trend of convergence is also present during the 1990s, as illustrated in Table 7.4 and Figure 7.1, both with regard to the EU average and the average social expenditure of the ‘core’ countries of the state-corporatist model. Moreover, the performance of the Southerners with regard to the EMU process is not so bad, as they have not only managed to satisfy the related criteria, but they have also improved dramatically their public debt and deficit (see Tables 7.2 and 7.3). As shown in Figure 7.1, with regard to the divergence of GDP per capita, the standard deviation in the Union dropped from 36.6 in the 1960s and 29.1 in the 1970s to 24.4 in the 1980s and 23.8 in 1993. It is true that Greece seemed to lag behind, especially in the period 1990–94. In the

Concluding Considerations 197 Table 7.4 Social expenditure in core countries of the statecorporatist model and in Southern Europe as a percentage of GNP 1990 South European Spain Italy Portugal Greece Average EU15 average

countries 19.9 24.1 15.6 23.2 20.7 25.4

1993

1996

24.7 26.2 21.3 22.3 23.63 28.9

Countries of state-corporatist model Belgium 26.7 29.4 Germany 25.4 28.4 France 27.6 30.9 Luxembourg 22.6 24.5 Netherlands 32.4 33.5 Austria 26.7 28.9 Average 26.9 29.27

1997

1998

22.5 25.2 22.0 23.1 23.2 28.6

22.0 25.7 22.5 23.6 23.45 28.2

21.6 25.2 23.4 24.5 23.68 27.7

28.8 30.0 31.0 25.2 30.1 29.6 29.12

28.1 29.5 30.8 24.8 29.4 28.8 28.57

27.5 29.3 30.5 24.1 28.5 28.4 28.05

Sources: Eurostat-ESSPROS (2000); Eurostat (1999b).

7 6 5 4 3 2 1 0 1990

1993

EU average divergence

1996

1997

1998

State-corporatist model divergence

Figure 7.1 Divergence of social expenditure between Southern European countries and (i) EU average and (ii) core countries of the state-corporatist model, 1990–98, as a percentage of GNP Note: The lines in the above graph represent the difference of the GNP (a) between the EU average and the Southern average and (b) between the state-corporatist average and the Southern average. Sources: Eurostat-ESSPROS (2000); Eurostat (1999b).

period 1980–2000 the ratio of GNP of the Southern European countries to the average GNP of the EU has improved for Spain and Portugal (from 72.4 per cent it increased to 82.4 per cent and from 55.4 per cent to 75.4 per cent, respectively) and deteriorated for Greece: from 70 per cent it decreased to 67.2 per cent (Vamvoukas, 2001). However, according to recent estimations of the OECD, the Greek GNP would increase considerably faster than the EU average and more specifically by 3.5 per cent in 1999, to 3.8 per cent in 2000


and by 3.9 per cent in 2001, the respective figures for the EU being 2.3 per cent in 1999, 3.4 per cent in 2000 and 3.1 per cent in 2001 (OECD, 2000a). The same trend of convergence is discernible with regard to the ratio of divergence in social insurance benefits, where a disparity remains, but has nevertheless decreased: in 1980 the ratio between the maximum and the minimum average social security benefits, measured in PPS, was 5.3. In 1992, it was 4.7 (Eurostat, 1994d). Moreover, one of the most striking gaps, the absence of any nationally wide minimum income support scheme, is true nowadays only for Greece. The other countries have adopted more or less similar schemes, Portugal’s (1996) being the most comprehensive, albeit not generous one (for more details, see Chapter 4).

The legacy of clientelism However, the inheritance of the distortions of the past constitutes a heavy burden, especially in Greece, as an overblown and often parasitic public employment mechanism still represents the main substitute for the residuality of social protection. Deep, structural changes of the political system and the overall public sector are required and, above all, the abandonment of the clientelistic policies and the curtailing of political patronage. Some timid steps in this direction have taken place. Clientelism is theorised by some authors (Petmesidou, 1996b), together with familism, as a quasi-permanent politico-institutional element of the distinctive model of income generation/distribution and social protection in the European South. However, although the clientelistic policies are far from being eradicated, there are signs of clear improvement. In this book, we have examined the efforts made for assuring transparency and objectivity in the definition of the social security benefits. In all countries there are on-going bureaucratic reforms of rationalisation and reorganisation of the administrative structures in tandem with the reforms of the social protection system. In Greece, for instance, law 2190/ 1994 introduced strict legal requirements for the implementation of a transparent system of national examinations for entrance to the civil service. Some data show that there is a slight decrease in the numbers employed in public administration: the total number of personnel on 31 December 1992 was 480,117, 6 per cent lower than that for 1991 (510,078), which was even lower (⫺2.62 per cent) than the related number for 1990 (data obtained from the Greek Ministry of Presidency, 1995). During this period government consumption was generally reduced (see Table 7.5). It remains to be seen whether this trend will be accompanied by the necessary measures for the alleviation of poverty and unemployment. The timid fiscal reforms in Italy and Greece are also combined with an attempt at modernisation and computerisation of the fiscal system, in an

Concluding Considerations 199 Table 7.5 Government consumption as a percentage of total consumption

Italy Spain Greece Portugal

1975

1980

1985

1990

1995

8.5 3.9 8.3 7.0

9.4 6.7 1.3 7.8

1.1 8.7 3.7 8.6

2.1 9.9 7.5 1.0

1.6 0.9 5.9 2.1

Sources: Fraser Institute (1997); Gwartney and Lawson (1997); Annual Report, International Monetary Fund (1998); World Bank (1995).

effort to restrict tax evasion and fraud. The new expert-systems became fully operational in 2000. In the same line of action, both in Greece and in Portugal, the more centralist states, there have been reforms bringing forth a territorial distribution of responsibilities at regional level in the field of health and social protection. Concluding, it seems that, as far as one can generalise and despite clear signs of convergence, the Southern European states have made great steps forward, but they have not yet completely overcome the lag separating them from the core EU countries, as important gaps still exist in their social protection systems. Moreover, as the Southern family is showing signs of diminishing resilience and inability to fulfil the role of primary social net, one cannot preclude the perpetuation of the existing situation of huge poverty and income inequality. Therefore, one could argue that the bid for a more efficient and rationalised welfare state in the South of Europe is still at stake.

Notes 1

The Southern Welfare States in the European Context

1. For the differences between the Catholic and the Greek Orthodox Church, especially in the field of social policy, see Petmesidou, 1996b. 2. See, for instance, the judgement of the Constitutional Court of Germany BVerfGE 22, 180. 3. For a further discussion of the relation between church, religion and welfare state, see Wilensky, 1982: 345. 4. Generally, the discussion about the substitution of the welfare state by a ‘welfare society’ is associated with a reintroduction of the communitarian spirit through a modernised form of subsidiarity, in which no social task should be assigned to an institution that is larger than necessary to do the job (Brown Scott, 1994; Etzioni, 1993). In this sense, the concept could incorporate simultaneously emancipatory but also conservative strategies, such as the reinforcement of charity initiatives and religious organisations. As G. Room remarks (1991: 175, 180) ‘in the activity of Church and its associated welfare organisations … poverty has tended to be seen as an object of charitable rather than political action.’ 5. Not exclusive to it, either. As Roembroek (1989: 148) remarks, this individualistic principle also corresponds to the protestant dogma of personal sovereignty. 6. 13 July 1945. See especially its articles 24–8. 7. See the Italian law of 20 March 1930 and 5 February 1934, which recognised the associations as state organs in administrative and economic matters. 8. It should be clear that public employment, as a welfare substitute, is quite different in the European South from the Scandinavian paradigm where the state is also an employer of first resort, as in the South, this does not serve any welfare state function but merely satisfies the clientelistic policies of the leading political parties. 9. The proliferation of invalidity pensions in Italy is an example of these policies on an individual basis. Another example is offered by the fact that in Greece about 40 per cent of private sector workers were classified as working under ‘arduous and unhealthy employment conditions’, which implies the right to early retirement. 10. Certainly, the political history of Italy did not have the stigma of the Greek Civil War, which haunts the post-civil war period, but also there, as on the other side of the Ionian Sea, the same political camp has stayed in power for almost half a century, based on analogous practices of political patronage, often shadowed by suspicions of scandals, economic corruption and Mafia involvement in political life. 11. Based on the following surveys: 50th International Survey, 1999; Global Competitiveness Report, 1997; 1998; 1999; African Competitiveness Report, 1998; Political Risk Services, International Country Risk Guide, 1998; World Bank/Basel University, World Development Report, Private Sector Survey, 1997; International Crime Victim Survey, 1996–7. 12. Estimates of what percentage of the population in each country works in the informal economy vary according to region and sector of economic activity. It produces an estimated 22 per cent of the GDP in Portugal, 25 per cent of the GDP in Italy (The Economist, 1997), 45 per cent of the GDP in Greece (Eurostat, 1995a) and constitutes 21–5 per cent of total employment in Spain.

200

Notes 201 13. The terms ‘welfare state’ (wohlfahrtstaat, état providence) and ‘social state’ (sozialstaat, état social, as it appears in many constitutional charters) are normally used interchangeably. However, their nature is different, the first being a descriptive and the other a prescriptive concept. The latter is a leading normative principle, that constitutionalises the obligations of the state in the fields of social and economic policy. The welfare state, on the other hand, is just a descriptive notion that, in its narrowest sense, implies the existence of a frame of basic social provisions and services, intended to secure a minimum decent existence for citizens. 14. Cf. article 1, paragraph 1, of the Constitution of Spain and article 2 of the Constitution of Portugal. 15. Cf. articles 2–4, 31, 32, 35–8, 41, 45, 46 of the Italian Constitution; 21, 22 of the Greek one; 39–52, 129, 148, 149 of the Spanish; and 56, 59, 63–72, 108, 109, 167, 216 of the Portuguese. 16. Cf. article 20 of the German Fundamental Law – Grundgesetz – and article 2 of the French Constitution of 1958. 17. Cf., for instance, the constitutions of Belgium (article 23), Ireland (article 45), Luxembourg (articles 11, 23, 94) and the Netherlands (articles 19, 20, 22).

2 The Carrot and the Stick: Employment, Unemployment and Labour Market Policies 1. In 1984, for example, central government debt amounted to 37 per cent of the GDP in Spain, 41 per cent of the GDP in Greece, 54 per cent of the GDP in Portugal and 66 per cent in Italy (Eurostat, 1995c). 2. In the 1960s, the growth of GDP per capita was: 5 per cent in Italy; 5.7 per cent in Portugal; 6.3 per cent in Spain; and 6.7 per cent in Greece (Sapelli, 1995: 7). 3. It employs approximately 40 per cent of Greek salaried workers (OECD, 1996c: 59). 4. As Mergos and Donatos (1996) argue, even within the CAP, Southern European agriculture has experienced few significant improvements in structures, productivity or trade. Today, the structure of agriculture is characterised by labour-intensive farms and fragmentation, as well as problems of environmental degradation which, as shown for the case of Greece by Lazaridis and Syngellakis (1996), have been exacerbated by the application of EU structural funds. 5. For example, ‘in the Algarve, where there was also a large rise in employment during the 1990s (by over 6 per cent of the working-age population), unemployment went up by much more than the national average, while it fell in Madeira despite a fall in employment’ (European Commission, 1999a: 74). 6. In 1991 it was reformed (law 233): the benefit period was reduced and whereas prior to the 1990s it was funded by the state, now it requires a contribution from workers as well as employers. 7. According to Encarnacion (2000), social concertation refers to a mode of policymaking based on co-operation and establishment of social pacts by government, trade unions and employers for pursuing common objectives. 8. Other factors include: the role of the family as the main provider of financial support to the offspring allowing them to remain unemployed until they find a job that suits them; limited interregional labour mobility (Bentolila and Dolado, 1991); loss of human capital due to long-term unemployment; and lack of adequate retraining schemes.

202 Notes 9. Unemployment insurance falls under the responsibility of the National Employment Institute (INEM), a tripartite economic and social council, which is also responsible for active labour market policies and vocational training. There are also a number of private employment agencies, some operating at a national level, others at a regional or local level. Some are linked to professional associations and/or NGOs. All agencies are approved by the INEM’s general council and offer vocational training courses. In 1994 Integrated Employment Services were created, which are instruments of active labour market policy aiming to strengthen the employability of unemployed people. 10. These constitute around 5 per cent of the Portuguese population. 11. Public expenditure on training programmes for unemployed adults was 0.06 per cent; and for unemployed youth this amounted to 0.16 per cent of the GDP in 1996 (OECD, 1997b: 189). 12. The OAED is the institution responsible for the administration of vocational training activities and the administration of unemployment insurance. 13. This section borrows heavily from Lazaridis and Koumandraki (2001). 14. Today it employs approximately 40 per cent of the salaried workers (OECD, 1996c: 59). 15. There is a flat-rate allowance for children who are not supported (decree 147/89), a flat-rate living allowance for repatriates (decree 57/73), a benefit for people undergoing severe hardship (law 1331/83), a flat-rate maternity allowance for mothers with no financial support (law 1331/84), a flat-rate payment towards housing benefit, a means-tested benefit awarded to refugees of Greek origin coming from Eastern Europe, Egypt or Albania, family allowances for Greek repatriates, a flat-rate allowance for lone parent families (decree 147/89), a heating allowance for people with special needs and a family allowance for those covered by the scheme of the Organization of Agricultural Insurance (OGA) (European Commission, 1999a: 526, 534). 16. The calculation of the level of benefit to be received is based on the insurance class of the beneficiary; there are 22 such classes: The reference earnings are the assumed gross earnings corresponding to the insurance class of the beneficiary. These earnings are determined after the actual earnings of the beneficiary over a period of two years are averaged. Different formulae are employed in the calculation of the replacement rates, referring to the different insurance classes as well as to different types of employment contracts. (Papadopoulos, 1998a: 80–1) The minimum benefit cannot be less than two thirds of the statutory minimum wage, whereas the maximum benefit income package cannot exceed 70 per cent of the assumed earnings for the appropriate insurance class. 17. Helping young people to find their first job should, according to the Commission, be one of the prime objectives of the structural funds (Blakely, 1990: 15).

3 Gender Inequalities, Family and Social Welfare: Continuity and Change 1. For criticism of this approach see Herzfeld, 1980; Lever, 1986. 2. The support of grandparents plays a crucial role in the caring of young children.

Notes 203 This is due to the long working hours; as Moussourou mentions in the Family Observer (European Commission, 1999c: 32) Greece has longer working hours (46.7 hours per week on average) than the EU average, and around 16 per cent of workers hold a second job. Hence, as she states, ‘the average daily time spent on childcare is 90 minutes for women and 36 minutes for men’. The situation is exacerbated by the fact that the majority of public schools in urban centres operate on a shift system (rotation pattern between mornings and afternoons), which creates problems for parents who work full-time on inflexible time schedules. According to the National Fertility Survey, ‘44% of child-minding is carried out by the mother or mother-in-law, and most frequently takes place in the family home’ (Symeonidou, 1996: 80). The Church of Greece runs a number of programmes for care of children in need (day care centres, orphanages, hostels where children from poor families can stay for free, summer camps for children of less well-off families etc.). 3. That is the number of births to women during the reproductive period of their lives (Hantrais, 1995: 83). 4. For example, compare Andalucia with Pais Vasco in Spain, and Campania with Emilia in Italy. 5. (a) Important reforms of the Greek tax system took place in the 1990s which stipulated that if both spouses earn an income they are taxed separately and the family tax reductions are deducted from the spouse whose income is higher. Since 1992 tax-payers with special needs and children with special needs have double tax reductions. A tax reduction for rent is also provided; this is proportionate to the size of the family. However, the tax scale and the exemptions and deductions have not adjusted to inflation since the early 1990s; this has hit medium-income families. Family allowances are very low. The average benefit per child was approximately 1 per cent of the GDP (European Commission, 1995a). Nevetheless, large families are protected in that children’s allowances increase with the number of children, they are favoured in housing policy, they enjoy tax exemptions and are provided with non-material benefits; in addition a pension is given to the mother (means-tested since 1997). (b) Important reforms of the Spanish tax system took place in the early 1990s. The most important element in economic aid for families consists of tax rebates. Personal income taxation was reformed in 1978 to joint taxation for married couples; new changes were introduced in 1989 whereby married couples could choose between joint and separate taxation. Since 1991 means-tested tax exemptions have been introduced for childcare expenses of working parents with young children; means-tested tax exemptions exist for dependent children under the age of 30 living with their parents and with low income. There are tax rebates for those who cohabit with disabled parents; the latter can be beneficiaries of tax relief if taxed individually. In 1995 deductions for family dependants were adjusted in proportion to inflation forecasts and differential levels of tax deductions were introduced for children on the basis of their birth order. As in Greece, family allowances in Spain are low, but large families are protected in that children’s allowances increase with the number of children, they are favoured in housing policy, they enjoy tax exemptions and are provided with non-material benefits. In the late 1990s the family allowances system was reformed, including an increase in the dependent-child allowance

204 Notes and, although it is means-tested, it became attributable not only to workers on social security, but to all. After the reforms, however, the allowances were not updated in the line with inflation and thus lost a large amount of their purchasing power (27 per cent) (Cordon, 1994). 6. For example, the amount of allowance received in Greece for the third child was increased in 1997 from 34,000 drachmas to 40,000 drachmas per month and the child’s age from which the mother can benefit from this amount was raised from three to six. In addition, every mother of four children or more receives 10,000 drachmas per month for each unmarried child under 23 plus a tax-free monthly pension of 23,000 drachmas for life – this is means-tested however, based on an annual family income below 3 million drachmas.

4

Social Security: Pensions and Social Minima

1.

Cf. the following articles of the constitutions of Greece, Italy, Portugal and Spain: (i) Articles 21 and 22 of the Greek Constitution Article 21 (1) The institution of the family, being the foundation of the preservation and improvement of the nation, as well as marriage, motherhood, and childhood, shall be protected by the State. (2) Families with a large number of children, war and peace invalids, war victims, widows, and orphans of persons killed in the war, and those suffering from mental or physical illness shall be under special state care. (3) The State shall be concerned with the health of the citizens and shall take special measures for the protection of youth, old age, cripples, and those who are destitute. (4) The provision of homes to those who are homeless or live in inadequate housing conditions shall be the subject of special care by the State. Article 22 (1) Work is a right and shall be placed under the protection of the State, which shall take measures with a view to creating conditions for full employment and for the moral and material improvement of the working agricultural and urban population. (2) The general conditions of work shall be determined by law and supplemented by collective agreements arrived at by free collective bargaining and, in the event of their having failed, by the regulations fixed by arbitration. (3) All forms of compulsory labour shall be prohibited. Special laws shall determine matters relating to the forcible recruitment of personal services in the event of war or mobilisation or for the benefit of the defence needs of the country or in the case of social emergency caused by a natural catastrophe or likely to endanger public health, and matters relating to the services offered to local authorities with a view to satisfying local needs. (4) The State shall provide for the social security of the workers, as the law provides. (ii) Article 38 of the Italian Constitution (1) Every private citizen unable to work and not provided with the resources necessary for existence is entitled to private and social assistance. (2) Workers are entitled to adequate insurance for their requirements in case of accident, illness, disability, old age, and involuntary unemployment.

Notes 205 (3) The disabled and persons incapable of employment are entitled to education and vocational training. (4) The responsibilities laid down in this Article are entrusted to organs and institutions provided or assisted by the State. (5) The freedom of private assistance is affirmed. (iii) Articles 63, 71 and 72 of the Portuguese Constitution Article 63 (1) Everyone is entitled to social security. (2) It is the duty of the State to organise, coordinate, and subsidise a unified and decentralised social security system, with the participation of the trade union associations, other organisations representing the workers, and associations representing the other beneficiaries. (3) The right to set up private and non-profit-making institutions of social solidarity that pursue the social security objectives laid out in this Article and in Articles 67, 69, 70, 71, 72, is recognised; they are regulated in the law and subject to State supervision. (4) The social security system protects citizens in sickness, old age, disability, widowhood, orphanhood, unemployment, and all other situations in which the means of subsistence or capacity to work are lost or reduced. (5) All the periods of time spent working regardless of the sectors of activity where the work was performed, are taken into account for the purposes of calculating the amount of old age and disability pensions, in accordance with the law. Article 71 (1) Citizens who are physically or mentally disabled enjoy all the rights and are subject to all the duties embodied in the Constitution, except for the exercise or performance of those for which their disablement renders them unfit. (2) The State carries out a national policy for prevention and for treatment, rehabilitation, and integration of handicapped persons, develops a form of education to make society aware of its duties of respect for them and solidarity with them, and ensures that they enjoy their rights fully, without prejudice to the rights and duties of their parents or guardians. (3) The State assists the disabled persons’ associations. Article 72 (1) Old people have the right to economic security and to conditions of housing and of family and community life that prevents and overcomes their isolation and marginal position in society. (2) The policy for the old also comprises economic, social, and cultural measures that tend to provide old people with opportunities for personal selffulfillment through active participation in community life. (iv) Articles 41, 49 and 50 of the Spanish Constitution Article 41 The public authorities shall maintain a public system of social security for all citizens which will guarantee social assistance and services which are sufficient in cases of need, especially in cases of unemployment. Complementary assistance and services shall be free. Article 49 The public authorities shall implement a policy of prevention, treatment, rehabilitation, and integration of those who are physically, sensorially, or mentally

206 Notes handicapped, who shall be given the special attention which they require and be afforded special protection for the enjoyment of the rights which this Title grants to all citizens. Article 50 To citizens in old age, the public authorities shall guarantee economic sufficiency through adequate and periodically updated pensions. Likewise, and independently of the family obligations, they shall promote their welfare through a system of social services which shall take care of their specific problems of health, housing, culture, and leisure.

5

National Health Systems: An Originality of the South?

1. In the Recommendation for the Broad Economic Policy Guidelines for 1999, member states are invited to review pension and health care systems in order to be able to cope with the financial burden of welfare spending on the ageing population and the need to influence future labour supply. See Draft Report from the Council (ECOFIN) on the Broad Guidelines of the Economic Policies of the member states and the Community appended to the Presidency Conclusion on the Cologne European Council 3/4 June 1999. 2. The Report is made up of a number of indices measuring different types of goal attainment and performance of the health systems. These include: responsiveness level; responsiveness distribution; fairness of financial contribution; as well as the average level of health of the population; combining criteria such as the adjusted life expectancy, health equality in terms of child survival. The overall health system performance is reported as a league table ranked from the highest level of achievement or performance to the lowest level. The measurement of achievement in the level of responsiveness was based on a survey of nearly 2,000 key informants in selected countries. Key informants were asked to evaluate the performance of their health system regarding seven elements of responsiveness: dignity; autonomy; and confidentiality; as well as prompt attention; quality of basic amenities; access to social support networks during care; and choice of care provider (encompassed by the term client orientation). The ‘fairness’ was meant to measure both fairness of financial contribution and financial risk protection. 3. Cf. the articles 21 (paragraph 3), 32, 64 and 43 of the constitutions of Greece, Italy, Portugal and Spain, respectively: (i) Article 21 of the Greek Constitution (3) The State shall be concerned with the health of the citizens and shall take special measures for the protection of youth, old age, cripples, and those who are destitute. (ii) Article 32 of the Italian Constitution (1) The Republic shall protect health as a basic right of the individual and as an interest of the community, and shall grant free medical care to the poor. No one shall be forced to undergo any medical treatment, except as provided for by law. In no case shall the law violate the limits set by respect for the human being. (iii) Article 64 of the Portuguese Constitution (1) Everyone has the right to protection of his or her health and the duty to defend and foster it.

Notes 207 (2) The right to health protection is to be met by: (a) A universal and general national health service taking into account the economic and social conditions of the citizens, tending to be free of charge; (b) The creation of economic, social, and cultural conditions securing the protection of children, the young, and the old; the systematic improvement of living and working conditions; the promotion of physical fitness and sports in school and among the people; the development of the people’s sanitary education. (3) In order to secure the right to health protection, the State has prime duty to: (a) Secure the access of all citizens, regardless of their economic condition, to preventive as well as curative and rehabilitation medical care; (b) Secure a rational and efficient medical and hospital coverage of the whole country; (c) Direct its action towards the socialisation of the costs of medical and medico-pharmaceutical care; (d) Control and supervise medicine practiced in partnership and privately, coordinating it with the national health service; (e) Control and supervise the production, marketing and use of chemical, biological and pharmaceutical products and other means of treatment and diagnosis. The national health service has a decentralised management in which the beneficiaries take part. (iv) Article 43 of the Spanish Constitution (1) The right to health protection is recognised. (2) It is incumbent upon the public authorities to organise and watch over public health and hygiene through preventive measures and through necessary care and services. The law shall establish the rights and duties of all in this respect. (3) The public authorities shall foster health education, physical education, and sports. Likewise, they shall facilitate adequate utilisation of leisure. 4. In an effort to provide a conceptual scheme to formalise the concept of disability and classify the consequences of diseases and disablement, the WHO introduced the International Classification of Impairments, Disabilities, and Handicaps (ICIDH) manual in 1980. In the ICIDH classification system, three principal concepts are used to describe the consequences of disease at the level of its impact on the body and on the person as a social being: ● ●

●

impairments which are losses or disturbances at the level of an organ; disabilities which are physical problems generating functional limitations such as, climbing stairs and more complex activity restrictions such as bathing and cooking; handicap which results from impairments or disability that limit the fulfilment of a role which is normal for that individual OECD (1998).

5. The positive lists include the drugs that can be prescribed and the negative ones those that are not to be financed by public funds.

208 Notes 6. According to Costa (Costa et al., 1994: 29, as quoted by Granaglia 1997: 157), the mortality rates of individuals aged 18–74 with school degrees equal or inferior to the elementary degree are much higher than those of individuals in the same age group, but with university degrees. 7. According to article 148 of the Spanish Constitution, the Autonomous Communities may assume competencies in the following: 1. organisation of their institutions of self-government; 2. alterations of the municipal boundaries contained within its area, and in general the functions which belong to the state administration concerning local corporations and whose transfer is authorised by the legislation on local government; 3. regulation of the territory, urbanism and housing; 4. public works of interest to the Autonomous Community in its own territory; 5. railways and highways whose itinerary runs completely in the territory of the Autonomous Community and within the same boundaries and transportation carried out by these means or by cable; 6. ports of refuge, recreational ports, airports, and generally those which do not carry out commercial activities; 7. agriculture and livestock raising in accord with the general regulations; 8. woodlands and forestry; 9. activities in matters of environmental protection; 10. water projects, canals and irrigation systems of interest to the Autonomous Community and mineral and thermal waters; 11. fishing in inland waters, hunting and river fishing; 12. interior fairs; 13. promotion of the economic development of the Autonomous Community within the objectives marked by the national economic polity; 14. handicrafts; 15. museums, libraries and conservatories of interest to the Autonomous Community; 16. monuments of interest to the Autonomous Community; 17. promotion of culture, research and, when applicable, the teaching of the language of the Autonomous Community; 18. promotion and regulation of tourism within its territorial area; 19. promotion of sports and adequate utilisation of leisure; 20. social assistance; 21. health and hygiene; and 22. the custody and protection of its buildings and installations, the co-ordination and other functions with respect to local police forces under the terms an organic law shall establish. After five years have elapsed and through the reform of its statutes, the Autonomous Communities may then expand their competences within the framework established in article 149. 8. Catalonia since 1981, Andalusia since 1984, the Basque Country and Valencia since 1987, Navarre and Galicia since 1991, and the Canary Islands since 1994.

Notes 209 9. Since 1978, family medicine is a recognised medical speciality with three years’ vocational training.

6 Migration into Southern Europe: Some Reflections on Policy Implications 1. Most of the emphasis will be on Italy, Spain and Greece. Portugal is a different case as most migrants in Portugal come from its former colonies and the impact of immigration has been lower than in the other three countries. 2. For example, 50 per cent of the Filipinos in Greece are university-educated (Iosifides, 1997: 34). 3. An example is the ‘great migration’ from southern Italy to North America, with an estimated annual departure of some 800,000 people (King, 1992). 4. The problem, however, was that no money from the central state was made available for the implementation of these initiatives, and the money available at local level was meagre; hence a discrepancy soon emerged between the principles underlying the legislation and its actual implementation (Zincone, 1999: 50). 5. It has been estimated that around 80 per cent of those over 65 who live in some coastal parts of Spain are Northern Europeans (Misiti et al., 1995). Another estimate is that there are more than 1.5 million Northern European migrants in the Spanish coastal areas and in the Canary Islands (Balao Para, 1994, cited in Betty and Cahill, 1999: 84). 6. For an account of the problems available data on retirement migration is surrounded with, see Williams, King and Warnes (1997). 7. Another distinction made in the literature (Betty and Cahill, 1999: 87–9) is that between registered residents (that is elderly migrants who live permanently in the host country), non-registered residents (that is those who spend a major proportion of the year in the host country, but have not registered with the local authorities), long-stayers (that is people who own dwellings which are used as second homes especially during the cold winter months) and renters (that is those who prefer to rent in order to avoid paying local taxes etc.). 8. The British Consul in Corfu estimated that out of a total British community of about 3,000, in 1997 there were approximately 800 retired British migrants in the island. The editor of a British magazine estimated the retirees to be fewer than 100. The actual number estimated during fieldwork dropped down to around 45. 9. For example, unlike the foreign retirees in Spain (Rodriguez, FernandezMayoralas and Rojo, 1998), retirees in Tuscany and Corfu had a history of high international mobility prior to retirement, had international career paths in business, diplomatic service, most were highly educated and were familiar with the host country and culture prior to retirement (see King and Patterson, 1998; Lazaridis, King and Poyago-Theotoky, 1999). 10. The situation in Tuscany or Corfu, where there are no coastal enclaves and retired migrants live in the countryside or in towns, makes integration more likely (for Corfu see Lazaridis, King and Poyago-Theotoky, 1999; for Tuscany see King, Warnes and Williams, 1998). Command of the language is a key requirement for integration, but learning to speak Portuguese or Spanish fluently is not easy when living in an enclave, surrounded by English pubs, shops, restaurants, and so on.

210 Notes

7 Concluding Considerations: Are Southerners Becoming More European than Southern? 1.

2.

3.

Petmesidou (1996) has elaborated on a double division of the Southern Europeans on two axes, North–South and East–West. However interesting this double dichotomy, it seems that the reality is not so geometrical. For instance, Portugal, the extreme ‘Westerner’, shares a lot of common features of relative underdevelopment with Greece. Besides, this model does not take into account that the statist–clientelistic elements in Italy and Greece, consolidated in the post-war period are not shared, at least to the same extent, by the Iberian countries, due to the historical disparities. The peripheral countries are obliged to re-examine their social policy strategy, in order to avoid an unbalanced growth that could enlarge the budget deficits. See for the case of Greece, Kazakos (1994). Regarding inflation, the national debt and, principally, the public deficit.

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Index accelerated admissibility procedures 183 accident insurance 19 accidents 148 activity rates 35, 41 Addis, E. 73–4, 81, 86 adjustment, automatic 107 administration, public 7, 198 corruption 13–14, 16, 184 admission rates 137, 145, 146 Advanced Institute for the Prevention and Emergency of Work (ISPESL) (Italy) 151 age at marriage 77 at retirement 104, 111, 112, 114 Age Concern 187 aged dependency ratio 78 ageing population 132, 168–9 Agency for Regional Sanitary Services (Italy) 152 agriculture 3, 5, 174 employment in 38, 39, 87, 88, 89 AIDS 128 Albanians 180 alcohol consumption l28 Amato Reform 1992 (Italy) 114 ambulatory care 135, 136, 144 Andre, I.A. 92 Anglo-Saxon welfare model 2, 3–4 Anthias, F. 180 Argandona, A. 52 Association of Greek Industrialists (SEV) 60–1 asylum applications 181–3 for humanitarian reasons 177 atypical work 88–91 Autonomous Communities (Regions) 161, 162 AZIMUTE programme 56 Bacalhau, M. 58 Baganha, M.I. 178

Baldwin-Edwards, M. 178, 180, 183 Balearic Islands 185, 186, 187 Barbesino, P. 171–2 Barot, R. 176 Bermeo, N. 67–8 Beveridgean welfare systems 1–2, 123 Betty, C. 187, 188 Bimbi, F. 83 birth allowances 82 births outside marriage 75 Bismarckian welfare systems 1–2, 123 black/grey economy see informal economy breadwinner, carer and 72–3 British Legion 187 Bruneau, T. 58 budget deficit 16, 196 Cahill, M. l87, 188 care 71, 92 childcare 23–4, 73–4 of the elderly 78, 186–7 carer, breadwinner and 72–3 Caritas 184, 188 Catholic Church 3, 4, 7, 8–9 Central Health Council (KESY) (Greece) 140 child allowances 82 child benefit package 79–80 childcare 23–4, 73–4 citizenship, social migrants and 183–4, 188–9 women and 84 civil service 8, 85 clientelism 7, 10–11, 41–2 Greece 62–3 legacy of 198–9 cohabitation 76, 77 collective dismissal 51–2 colonies, former 172–3 commodification 85 competition 166 concertation, social 49–50, 52, 56, 60–1, 67, 192

229

230 Index Confederacion Espanola de Organizaciones Empresariales (CEOE) 49–50 Confederacion Sindicat de Comisiones Obreras (CCOO) 49, 67 Confederation of Trade Unions of Greece (GSEE) 60, 67, 112 confluent love 77 constitutions and health systems 129–30, 206–7 and social security 94–5, 204–6 construction 174 Continental welfare model see state-corporatist welfare model contracting out 157 contribution rates 101 contributions 25–6, 98 receipts 110, 113, 116, 120 Corfu 185, 186, 188 Corkill, D. 178 corporatism 8, 9 corruption 13–14, 16, 184 Costa Blanca 187 Costa del Sol l85, 187, 188 Cousins, C. 91 coverage of the health system 123–5 Daly, F. 176 de Sousa, B. 5–6 death grant 148 decentralisation 133 defence expenditure 22–3, 97, 98 demographic change 74–7 dental disease 128 deregulation 38 Greece 61 Italy 47–8 Portugal 55–6 Spain 50–2 development, economic 191 unequal 17–18 Dini Reform 1995 (Italy) 114 disability expenditure 134, 135 disability pensions 96–7, 105, 106–7, 111 diseases 127, 128 dismissal 51–2 distribution state 2 district funds 95, 117 district health authorities (ARS) (Portugal) 156

divorce 76–7 doctors 134 Greece 145 Italy 152, 154 Portugal 157 Spain 164 domestic chores 92 domestic service 174 dual labour market system

173

early retirement 53 earnings-related social insurance schemes 72–3 Eaton, M. 178 economic development see development, economic economic growth 39, 196–8 economic liberalism 15–16 Economic and Monetary Union (EMU) 63, 194 performance of Southern states and EMU process 195–8 Economic and Social Agreement 1990 (Portugal) 56 economy 3, 5 changes in and labour market trends 34–42 education 87, 90 elderly 71, 77–8 distribution of social protection benefits and 12–13, 23, 24, 96 pensions see pensions retirement migration 185–9, 190 emigration 169–71 employees’ contributions 25–6, 98, 110, 113, 116, 120 employers’ contributions 25–6, 98, 110, 113, 116, 120 employment structural changes 38–42 women and 41, 85–91, 91–2 see also labour market; unemployment employment policy reforms Greece 59–61 Italy 43–8 Portugal 55–7 Spain 48–52 employment protection legislation 51–2, 54

Index 231 employment subsidy programmes 61–2, 65 Employment and Vocational Training Institute (Portugal) 59 enclaves, expatriate 187 Esping-Andersen, G. 2, 7–8 ethnic specialisation 174 etatism 8, 15–16 ethnic migrants 172 European Commission 2, 102 European Convention on the Juridical Status of Immigrant Work 95 European Convention on Social Security 95 European Social Fund (ESF) 59, 64–6 European Union/Community (EU/EC) 74, 185 Ad Hoc Group on Immigration 175 distribution of income 27–8 financing of social security 25, 26 general characterisation of social protection systems 18–22 impact on social protection systems 194–8 minimum income schemes 102 poverty 29 Social Affairs and Employment Council 121–2 unemployment 32–3, 37 vocational training 65 expatriate enclaves 187 familism 82–4 family 3, 5, 41–2, 69–92, 192 distribution of social protection benefits and 12–13, 23–4 gender, welfare state and 70–84; changing structures 74–7; childcare 73–4; elderly 77–8; family policy and familism 82–4; income transfers 78–82; maternity, paternity and parental leave 74 retirement migrants’ loss of family network 186–7 support and unemployment 62, 64, 173 family allowances 78–81 family benefits 78–82 family policy 82–4

Feio, P.A. 92 Ferrera, M. 6–7, 17, 83, 99 critical approach to model of 7–16 fertility rate 74–5 financing 25–6 health systems 132–7 passim; Greece 139–40; Italy 150–2; Spain 160, 161–2 pension systems 98–9, 104 fixed-term contracts 40, 50–1, 54, 55, 61 flexibility, labour market 38, 66–7 gender, family and 88–91 Greece 61 Italy 47–8 Portugal 55–6 Spain 50–2 foreign legal resident population 170, 171 Foreigners’ Law 1985 (Spain) 176 France 102 gender 69–92 family, welfare state and 70–84 inequalities in the labour market 85–91 migration flows 168, 174 general practitioners (GPs) 152 General Scheme (Regime Geral) Portugal 95, 114–17 Spain 95, 117–18, 121 General Social Security Revenue Office (Spain) 118 generosity of social protection 11–12, 99–101 Germany 195 Goddard, V. 70–1 Gonzalez, M.J. 70 government 98 budget deficit 16, 196 consumption 198, 199 contributions 25–6, 98, 110, 113, 116, 120 expenditure 16; military expenditure 22–3, 97, 98; see also health expenditure; social expenditure public debt 195, 196 Greece 12, 17–18, 126 budget deficit 16 Catholic Church 4, 9

232 Index Greece – continued clientelism 10–11 constitution 18, 129, 204, 206 etatism 15–16 EU Structural Funds 195 GNP 196–8 gender, family and social welfare 71–2, 83; changing family structures 75, 76–7; childcare 73; elderly 77–8; income transfers 79–82; maternity, paternity and parental leave 74 government consumption 199 government expenditure 16; military expenditure 22, 23, 97, 98; social expenditure 21–2 health status of population 127–9 labour market 31, 55, 59–66, 67–8; employment policy reforms 59–61; passive measures for the unemployed 63–4; trends and economic change 34–42 passim; unemployment 30, 31, 32–3, 36–8, 62–3; vocational training 64–6; working time 60, 61–2 migration: care and support of migrants 184; ethnic specialisation 74; immigration policy 175, 176, 178–9; inward 170, 171, 172; refugees 181–3; retirement migration 185, 188; sweeping operations 180 national health system 123, 124, 125, 139–49; cash benefits 146–8; health expenditure 130–2; institutional commitment 129–30; institutional structure, financing and organisation 132–7 passim, 139–42; pharmaceutical care 148; problems and prospects 148–9; services 132–7 passim, 142–6; subjective evaluation 138–9 pensions 95, 108–12; expenditure 95–7; financing 98, 99; generosity 99–101; minimum income scheme 101–3 passim; services and benefits 103–7 poverty 27–30 reform of public administration 198

scope and structure of social protection 12–13, 23–6 passim women and employment 87–90 Greek Orthodox Church 4 Grimshaw, D. 67 growth, economic 39, 196–8 GSEE (Confederation of Trade Unions of Greece) 60, 67, 112 ‘handicap-privileges’ 86 health areas 162 health care see national health systems health centres 156, 164, 165 see also hospitals health expenditure 130–2, 134, 135–7 Italy 130–2, 150 Portugal 130–2, 155, 156, 157, 159 Spain 130–2, 160, 161 health insurance 19 health status of population 127–9 health tax 150 HELP 187 Higher Health Council (CSS) (Italy) 151 Higher Institute of Health (ISS) (Italy) 151 honour and shame value system 70–1 hospitals Greece 140, 141, 144–5, 146, 147, 148 Italy 152–4 Portugal 156–7 Spain 162, 164, 165 housekeeping 177 IKA (Institute for Social Insurance) (Greece) 97, 108, 111, 140, 141, 142, 144 cash benefits 146–8 ILO Convention on Equality of Treatment 95 immigration 171–2 policy 175–80 see also migration Immigrants see immigration Immigration Act 1998 (Italy) 178 in-patient care 134, 135, 137 income distribution 27–8 income-related family benefits 78–81, 82

Index 233 income replacement rate 99–100, 101, 103 income transfers to families 78–82 Indicatore della Situazione Economica (ISE) 78 industry, employment in 38, 39, 87, 88, 89 infant mortality 127 INFONOR 59 informal sector 16, 29, 40, 41,42, 68 Greece 61 migrants and 168, 173 women and 88 INPS (Istituto Nationale della Providenza Social) (Italy) 103, 112, 114 INSALUD (Istituto National de la Salud) (Spain) 135, 160, 161, 161–2, 164, 166 INSERSO 160 INSS (National Social Security Office) (Spain) 118, 160 Institutes of Shelter and Cure (IRCCS) (Italy) 151 institutional commitment 129–30 institutional structure 132–7 insurance 2, 9–10, 18–19, 123, 132–3 insurance funds 140, 141 International Convention on the Protection of the Rights of all Migrant Workers and Members of their Families 94 invalids, pensions for 96–7, 105, 106–7, 111 Iosifides, T. 171, 172 Ireland 5 IRM programme 102 Italian bias 11–12 Italy 12, 16 budget deficit 16 clientelism 10–11 constitution 94, 129–30, 204–5, 206 corruption 14 etatism 15–16 gender, family and the welfare state 70, 72–3, 83; changing family structures 74–7; childcare 73–4; elderly 77–8; income transfers to families 78–82; maternity, paternity and parental leave 74

government expenditure 16; military expenditure 23, 97 health status of population 127–9 labour market 43–8, 67–8; employment policy reforms 43–8; trends and economic changes 34–42 passim; unemployment 30, 31, 32–3, 35, 37, 38 life expectancy 126, 127 migration: care and support for migrants 184; ethnic specialisation 174; foreign residents 172; immigration policy 175–6, 177–8, 179; naturalisation 183; refugees 181–3 national health system 9, 129–37 passim, 149–55; finance and organisation 132–7 passim, 150–2; health expenditure 130–2 passim, 150; institutional commitment 129–30; institutional structure 132–7 passim; pharmaceutical care 155; problems and prospects 155; services 132–7 passim, 152–4; subjective evaluation 137–9 pensions 112–14; financing 95–7, 98, 99; generosity 11–12, 99–101; minimum income schemes 103; services and benefits 103–7; structure 95 poverty 27–30 passim structure and scope of social protection system 12–13, 23–6 passim women and employment 85–91 passim Jurado, T. 70 Jurado Guerrero, T.

76

Katrougalos, G. 64 KEKs (centres for vocational training) (Greece) 65–6 King, R. 169, 170, 171, 172, 176, 181, 184, 185 Konjhodzic, M. 170, 171 Koser, K. 169

234 Index labour market 31–68, 84 changes in the economy and trends in 34–42 employment policy reforms 43–8, 48–52, 55–7, 59–61 gender inequalities 85–91, 91–2 migrants and 173–4 policy reforms 42–3 unemployment see unemployment vocational training 53–4, 59, 60, 64–6 working time 53, 56, 60, 61–2 see also under individual countries LAEK 61 Langan, M. 85 ‘Latin Rim’ model see Southern European welfare model Lazaridis, G. 40, 71 Leibfried, S. 3 Leitner, S. 71 length of stay 137 liberal welfare model 2, 3–4 life expectancy 77–8, 126, 127 Lister, R. 84 living arrangements 71, 76 local health units 150, 152, 154 lone parent families 76, 80–1 Lutz, H. 169 marriage 70, 75–7, 91 marriage allowance 81–2 marriage benefit 81 Martelli Law 1990 176, 177 Martin, C. 83 maternal mortality 127, 128 maternity grant 146 maternity leave 74 Matsaganis, N. 17 Mediterranean diet 127 migrants see immigration; migration migration 167–90, 193 fragmented policy responses 175–84 new migration 168–9 retirement migration 185–9, 190 shifts and changes 169–75 migration entrepreneurs 174 military expenditure 22–3, 97, 98 minimum income schemes 25, 56, 58, 101–3, 198 minimum wage 59, 61, 66

Moncloa Accords 49 moral panic 169, 181 mortality rates 127, 128 Naldini, M. 70, 76 National Centre for Protection against Occupational Risks (Portugal) 117 National Employment Accord 1982 (Spain) 50 National Health Council (Italy) 151 National Health Council (Portugal) 155–6 national health systems (NHS) 7, 9–10, 123–66 cash benefits 146–8 coverage 123–4 distribution of social protection benefits 12–13 finance 132–7, 139–40, 150–2, 160, 161–2 health expenditure see health expenditure health status of the population 127–9 institutional commitment to 129–30 institutional structure 132–7 and migrants 187–8 organisation 132–7, 150–2, 161–2 pharmaceutical care 135–7, 148, 155, 157, 166 services 132–7, 142–6, 152–4, 156–7, 158, 159, 162–6 subjective evaluation 137–9 see also under individual countries National Institute of Social Security (Spain) 118 National Institute of Social Services (Spain) 118 national origin of refugees 181–3 National Pensions Centre (Portugal) 117 National Pensions Fund (Portugal) 95 National Programme of Professional Training (Spain) 54 National Social Security Office (INSS) (Spain) 118, 160 National Welfare and Assistance Institute for Artists (ENPALS) (Italy) 113 National Welfare Institute for Employees of Public Authorities (INPDAP) (Italy) 112

Index 235 National Welfare Institute for Industrial Managerial Employees (INPDAI) (Italy) 113 National Welfare Institute for Journalists (INPGI) (Italy) 113 naturalisation 183–4 Navy’s Social Office (Spain) 118 Netherlands 123–4 non-income-related family benefits 81–2 nurses 134, 145, 147, 154, 164 OAED (Greek Manpower Organisation) 60, 61, 65 OAEE pension fund 108 OECD 54, 99–100 OGA (Organisation of Agricultural Insurance) (Greece) 108, 140, 141 old age see elderly old age insurance 19 Open Care Centres (KAPI) 78 organisation of health systems 132–7, 150–2, 161–2 Organisation for the Administration of Health Resources (ODIPY) (Greece) 149 Orloff, A.S. 69 Ostner, I. 85 overtime 90 pacts, social 49–50, 52, 56 Papadopoulos, T. 81, 83 parental leave 74 part-time work Greece 61 Spain 51, 53 women and 88, 89, 90 PASOK 67 paternity leave 74 patronage 7, 10–11, 62–3 see also clientelism pendulum migration 168 pensions 8, 93–122 constitutional and legal aspects 94–5 distribution of social protection benefits 12–13 expenditure 95–7 financing 98–9, 104 generosity of 11–12, 99–101 minimum income schemes 101–3 services and benefits 103–7

structure of social security system 95 women and 71–3 see also under individual countries Peripheral Systems of Health (PESYs) l49 peripheral welfare model 5 Petmesidou, M. 65–6 Petra programme 65 pharmaceutical care 135–7, 148, 155, 157, 166 physical frailty 186–7 political parties 7 Portugal 11, 16–17 constitution 94, 129, 205, 206–7 corruption 14 etatism 15–16 EU Structural Funds 195 gender, family and the welfare state 71–2; changing family structures 74–7 passim; childcare 73–4; elderly 77–8; income transfers 78–82 passim; maternity, paternity and parental leave 74 GNP 197 government expenditure 16; military expenditure 23; social expenditure 21 health status of population 127–9 informal economy 16 labour market 55–9, 67–8; employment policy reforms 55–7; trends and changes in the economy 34–42 passim; unemployment 30, 31, 32–3, 36, 37, 38, 57–8; vocational training 59 life expectancy 126 migration 170; immigration policy 178, 179, 183; inward 170, 171, 172; refugees 181–3 national health system 9, 155–9, 160; health expenditure 130–2, 155, 156, 157, 159; institutional commitment 129–30; institutional structure and organisation 132–7 passim; pharmaceutical care 157; problems and prospects 157–9; services 132–7 passim, 156–7, 158, 159; subjective evaluation 137–9

236 Index Portugal – continued pensions 114–17; constitutional and legal aspects 94–5; expenditure 95–7; financing 98–9; generosity 99–101; minimum income scheme 101–2; services and benefits 103–7; structure of system 95 povert 27–30 structure and scope of social protection system 12–13, 23–6 passim women and employment 86–91 passim potential life years lost per 100,000 from selected pathologies 27, 128 poverty 100 persistence of 27–30 primary care 144, 152, 162–4 primary health care teams (EAPs) 162–4 private sector 6–7 health systems and 133–4, 142, 157–9, 161 pension schemes 108, 112–13 Prodi Reform 1997 (Italy) 114 prostheses 164–6 prostitution 174 public administration see administration, public public debt 195, 196 public sector 6–7 employment in 62–3, 88 public service state 2 purchasing power standards (PPS) 100–1 qualification requirements

l04–5

racism 180–1, 190 receipts (social security) 26, 110, 113, 116, 120 Red Cross 184 refugees 181–3 regional disparities 17–18 employment 40–1 health systems 129, 140–1, 150 social security 102, 103 regularisation of migrants 175–80 replacement rates 99–100, 101, 103 residential care 188

retirement age at 104, 111, 112,114 early 53 retirement migration 185–9,190 return migration 170–1 Reyneri, A. 177–8, 179–80 Rhodes, M. 49 Rodriguez-Melguizo, I. 176, 181,184 romantic love 77 Rubery, J. 67 rural areas 140–1 Santos, F. 5–6 Scandinavian welfare model 2 sectors, employment by 35, 38, 39, 87, 88, 89 self-employment 108 semi-peripheral welfare model 5–6 service sector 38, 39, 87, 88, 89 services national health systems 132–7; Greece 142–6; Italy 152–4; Portugal 156–7, 158, 159; Spain 162–6 social security systems 103–7 short-term contracts 40, 50–1, 54, 55, 61 short-term social pact 56 sickness allowance 147–8 Singleton, A. 171–2 social assistance programmes 24–5 social citizenship see citizenship, social social clubs 187 Social Democratic welfare model 2 social dialogue 49–50, 52, 56, 60–1, 67, 192 Social and Economic Accord (Spain) 50 social expenditure 3, 20, 21–3, 196, 197 health 130–2 and military expenditure 97, 98 pensions 95–7, 109, 113, 115, 119 social legislation, introduction of 19 social pacts 49–50, 52, 56 social protection systems general characteristics 18–23 impact of EU 194–8 persistence of poverty 27–30 structure and scope 12–13, 23–6, 192–3 women and 71–3 social rights 18

Index 237 social security centres 117 social security deficit 99 social transfers 28 soft-budgeting 42 Southern European welfare model 3–5 Ferrera’s model 6–7; critical approach to 7–16 sub-category of state-corporatist model 17–18 Spain 11, 17–18 Catholic Church 9 constitution 94, 129, 205–6, 207 corruption 14 etatism 15–16 EU Structural Funds 195 gender, family and welfare state 71–3; changing family structures 74–7; childcare 73–4; elderly 77–8; income transfers to families 78–82; maternity, paternity and parental leave 74 GNP 197 government expenditure 16; military expenditure 23, 97 health status of population 127–9 labour market 48–54, 67–8; employment policy reforms 48–52; trends and changes in the economy 34–42 passim; unemployment 30, 31, 32–3, 35–6, 37, 38, 52–3; vocational training 53–4; working time 53 laws of 1836 4 life expectancy 126 migration 172; ethnic specialisation 174; immigration policy 175, 176, 178, 179; inward 170, 171; refugees 181–3; retirement migration 187, 188 national health system 9, 159–66; finance and organisation 132–7 passim, 161–2; health expenditure 130–2, 160, 161; institutional commitment 129–30; institutional structure 132–7 passim; pharmaceutical care 166; problems and prospects 166; services 132–7 passim, 162–6; subjective evaluation 137–9 pensions 117–21; expenditure 95–7; financing 98, 99;

generosity 99–101 passim; minimum income schemes 101–3 passim; services and benefits 103–7; structure of social security system 95 persistence of poverty 27–30 structure and scope of social protection system 12–13, 23–6 passim women and employments 85–91 passim special schemes 114–17, 117–18, 121 specialisation, ethnic 174 sponsorship of migrants 178 spouses, dependent 72–3 state-corporatist welfare model 1, 2, 7–8, 191 South European variant as sub-category of 17–18 stereotyping, negative 181 strategic health plans 162 strategic neo-corporatism 49 street-hawking 174 Structural Funds 195 subjective evaluation 137–9 subsidiarity 72 Catholic Church 9 subsidies, employment 61–2, 65 supplementary pension funds 108 surgery 164 survivor’s pension 12–13, 23, 24, 72–3, 96, 107 sweeping operations 180 Symeonidou, H. 78 tax 25, 26 allowances 78–81 health tax 150 tax-financed health systems 9–10, 123 teenage pregnancies 75 temporary contracts 40, 50–1, 54, 55, 61 temporary protection 183 third-country migration 169–84, 189–90 policy responses 175–84 shifts and changes 169–75 Tinios, P. 13 tobacco consumption 128 Toledo Pact 118 tolerated refugees 183 trade unions 49, 51, 60–1

238 Index trafficking in migrants 180 training, vocational 53–4, 59, 60, 64–6 training and apprenticeship contracts 51 transition programme, EC 65 Tuscany 185, 186 undocumented migrants 172, 176–9, 184 unemployment 29–30, 31, 32–3, 66, 67–8 trends 34–9 see also Greece; Portugal; Spain unemployment assistance 56, 58 unemployment benefits 12–13, 67 Greece 25, 60, 63–4 Portugal 56, 58 Spain 52–3 unemployment insurance 19 Union General de Trabajadores (UGT) 49, 67 universalism 9–10 university clinics 141 unofficial payments 140 USLs (local health units) (Italy) 150, 152, 154 Vaiou, D. 90–1 Vardakasanis, J. 97 Venturini, A. 173 violence, racist 181

vocational training 53–4, 59, 60, 64–6 voluntary groups 184, 187 Walby, S. 84 Wallerstein, I. 5 Warnes, T. 185 Warren, R. 41 welfare society model 5–6 WHO, World Health Report 128, 129 Williams, A. 169, 185 women 70 age at first birth 75 elder care 78 and employment 41, 85–91, 91–2 family and welfare state 70–4, 81, 83–4, 91 life expectancy 77–8 maternity and parental leave 74 work permits 171 Workers’ Statute (Spain) 49, 51 working time 53, 56, 60, 61–2 xenophobia

180–1

young people 64, 71 unemployment 37, 38 Young Worker Programme 65 youth unemployment 37, 38 Youthstart 65 Zincone, G.

176, 177, 178, 184

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