Tuesday

6th Jun 2023

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.

Analysis

Final steps for EU's due diligence on supply chains law

Final negotiations on the EU due diligence law begin this week. But will this law make companies embed due diligence requirements in their internal processes or incentive them to outsource their obligations to third parties?

Latest News

  1. Final steps for EU's due diligence on supply chains law
  2. Top EU court rules Poland's court reforms 'infringe law'
  3. Sweden's far-right is most anti-Green Deal party in EU
  4. Strengthening recovery, resilience and democracy in regions, cities and villages
  5. Why Hungary cannot be permitted to hold EU presidency
  6. Subcontracting rules allow firms to bypass EU labour rights
  7. Asylum and SLAPP positions in focus This WEEK
  8. Spanish PM to delay EU presidency speech due to snap election

Stakeholders' Highlights

  1. International Sustainable Finance CentreJoin CEE Sustainable Finance Summit, 15 – 19 May 2023, high-level event for finance & business
  2. ICLEISeven actionable measures to make food procurement in Europe more sustainable
  3. World BankWorld Bank Report Highlights Role of Human Development for a Successful Green Transition in Europe
  4. Nordic Council of MinistersNordic summit to step up the fight against food loss and waste
  5. Nordic Council of MinistersThink-tank: Strengthen co-operation around tech giants’ influence in the Nordics
  6. EFBWWEFBWW calls for the EC to stop exploitation in subcontracting chains

Join EUobserver

Support quality EU news

Join us