Thursday

29th Oct 2020

EU populism feeds on poverty, World Bank warns

  • Former EU commissioner and World Bank chief Georgieva will launch the report in Brussels on Thirsday (Photo: worldbank.org)

The World Bank has warned that deepening economic inequality in the EU risked fuelling populist politics.

The US-based development body is to say in a report, out on Thursday (8 March), that inequality has been "mounting in many parts of the EU since 1990 as low-income Europeans have been falling behind in the labor market."

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

  • Warsaw: National EU economies have prospered, but poor regions getting left behind (Photo: Alexey Topolyanskiy)

Its figures show that the earnings of the poorest 10 percent of Europeans fell by 7 percent in recent decades, while the earnings of the EU's wealthiest 10 percent grew by 66 percent.

The report notes that poor regions in parts of eastern Europe, such as Hungary and Poland, still have less than 50 percent of the EU average GDP per capita, even though national economies in the east have prospered.

It says most of southern Europe - Greece, Italy, and Spain - is falling further behind the EU curve due to low productivity and low growth.

It also says that technological change has wiped out 15 percent of manual jobs in Europe in the past 15 years.

Manual workers in Austria, Bulgaria, Greece, Hungary, Italy, Latvia, Romania, and Slovenia, were the hardest hit, the report notes.

The report adds, according to highlights released to press on Wednesday, that economic pessimism is rational in these areas and should be taken "very seriously" by EU institutions.

It also warns that that pessimism can be easily exploited by populist politicians.

"The machine will stall unless steps are taken to ensure people benefit equally", Kristalina Georgieva, the World Bank chief executive and a former EU commissioner, said in a statement ahead of the publication.

Arup Banerji, who is in charge of the EU countries department at the World Bank, said: "The EU is growing, but Europeans are not growing united".

Georgieva added, in an interview with the Financial Times newspaper: "If left unattended, the risk is right there that people feel disenfranchised, disillusioned, and left behind."

"There will be fertile ground for populism - not necessarily for [politicians] who come up with solutions, but people who come up with the right slogan," she added.

"The convergence machine of the EU is still working - but it's not working for everyone and there are signs of growing divides," she said.

"Low-income Europeans are falling behind in the labour market across much of the EU. If this is not addressed, there will be a growing inequality with all the consequences of that," Georgieva said.

Feature

New year, old problems for one of EU's poorest places

The year is off to a rocky start in Vaslui, one of EU's most impoverished regions and Romania's poorest county, where two 12-year olds were found in alcohol-induced coma after having spent their Christmas carol-singing money on alcohol.

Germany asks capitals to give a little in EU budget impasse

European Parliament negotiators are demanding €39bn in new funding for EU programmes such as Horizon research and Erasmus, in talks with the German EU presidency on the budget. Meanwhile, rule-of-law enforcement negotiations have only just begun.

EU budget talks suspended in fight for new funds

MEPs are requesting additional, new funding of €39bn for 15 EU programs. The German presidency argues that budget ceilings, agreed by EU leaders at a marathon summit in July, will be impossible to change without a new leaders' meeting.

News in Brief

  1. Kaczyński attacks feminism in apocalyptic terms
  2. US official berates new EU farm policy
  3. Corona death-toll in Europe up 40 percent
  4. Turkey's France boycott goes against EU trade deals
  5. Study identifies four problems in political social media
  6. Court: Belgium violated human rights with Sudan deportations
  7. Frontex launches inquiry into alleged pushbacks
  8. Italy: Police uses teargas against anti-lockdown protests

EU countries stuck on rule of law-budget link

Divisions among EU governments remain between those who want to suspend EU funds if rule of law is not respected, and those who want to narrow down conditionality.

Stakeholders' Highlights

  1. UNESDAMaking healthier diets the easy choice
  2. Nordic Council of MinistersUN Secretary General to meet with Nordic Council on COVID-19
  3. UNESDAWell-designed Deposit Return Schemes can help reach Single-Use Plastics Directive targets
  4. Nordic Council of MinistersNordic Council meets Belarusian opposition leader Svetlana Tichanovskaja
  5. Nordic Council of MinistersNordic Region to invest DKK 250 million in green digitalised business sector
  6. UNESDAReducing packaging waste – a huge opportunity for circularity

Latest News

  1. Belarus: Where's the EU when you need it?
  2. MEPs hear clash over occupied Hungarian drama school
  3. EU Commission sticks to €20bn AI target, despite Covid
  4. Confusion over Frontex's Greek pushback investigation
  5. MEPs push for limited 'right-to-repair' on consumer devices
  6. What American decline means for Europe
  7. Post-Covid is a different world - EU needs to secure a role
  8. Post-Brexit UK vs EU on Ukraine's future

Join EUobserver

Support quality EU news

Join us