Tuesday

6th Dec 2016

Austerity measures destroying EU social model: report

Austerity measures meant to pull Europe out of the crisis have put some 800,000 children into poverty.

The findings, among others, are detailed in a 357-page World Social Protection report out Tuesday (3 June) by the Geneva-based UN agency, the International Labour Organisation (ILO).

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

  • 6.6 million more people at risk of poverty or social exclusion today when compared to 2008 (Photo: EUobserver)

“The achievements of the European social model, which dramatically reduced poverty and promoted prosperity in the period following the Second World War, have been eroded by short-term adjustment reforms,” notes the report.

The report argues that fiscal consolidation meant to reduce debt has failed to stimulate the kind of economic growth needed to create jobs.

It notes that maintaining social protection not only reduces poverty but also stimulates growth by boosting the health of the vulnerable, increasing their productivity, and by extension props up domestic demand.

The report says that families in austerity-driven nations like Ireland, Cyprus, Greece, and Portugal have seen their disposable incomes plummet, leading to lower consumption.

In Greece, salaries dropped 35 percent since 2008 while unemployment increased by 28 percent. At the same time, social security reforms are being replaced with a system that limits the responsibility of the Greek state.

For comparison, the ILO estimates poverty rates in Finland in 2010 would have been over 30 percent, as opposed to around 7 percent, had the government slashed social protection transfers to those in need.

The ILO notes some structural reforms imposed on governments are designed to streamline administration.

But the emphasis, it says, has been disproportionally placed on the fiscal objective of balancing public budgets “without due consideration to the objective of adequate benefits to all people”.

Europe’s solution to the crisis for the past five years has instead given rise to persistent unemployment, lower wages and higher taxes.

All three have boosted poverty and social exclusion rates, which now affects some 123 million people or 24 percent of the EU population.

Before the start of the crisis in 2008, the figure was 116 million. Today, around 800,000 more children now live in poverty compared to five years ago.

“Some estimates foresee an additional 15-25 million people facing the prospect of living in poverty by 2025 if fiscal consolidation continues,” warns the ILO.

The European Commission, for its part, notes unemployment has increased to close to 26 million.

It says 5.3 million young people are jobless and around half of the unemployed have been without a job for more than a year.

“Although there are some signs of economic recovery, it remains slow; it is still very fragile; and it is uneven throughout the EU,” EU employment commissioner Laszlo Andor said Monday.

Andor says nearly a quarter of the population is still considered at risk of poverty or social exclusion.

Focus

Anti-HIV measures failing in EU, says WHO

Rates of infection have stayed constant for a decade in the EU, though there has been a massive surge in Russia apparently caused by drug users sharing needles.

News in Brief

  1. Idea of road transport agency gains momentum among MEPs
  2. EU dismisses euro crisis risk after Italian referendum
  3. Italy result poses no risk to the EU, Sapin says
  4. EU asked to clarify links to Iran executions
  5. Italian economy minister tipped as caretaker PM
  6. EU tells US tech giants to act faster against hate speech
  7. Iceland's Pirates in bid to form government
  8. Danes are the happiest workers, study says

Stakeholders' Highlights

  1. European Jewish CongressEJC President Breathes Sigh of Relief Over Result of Austrian Presidential Election
  2. CESICESI Congress Focuses on Future of Work, Public Services and Digitalisation
  3. European Gaming & Betting AssociationAustrian Association for Betting and Gambling Joins EGBA
  4. ACCAWomen of Europe Awards: Celebrating the Women who are Building Europe
  5. European Heart NetworkWhat About our Kids? Protect Children From Unhealthy Food and Drink Marketing
  6. ECR GroupRestoring Trust and Confidence in the European Parliament
  7. UNICEFChild Rights Agencies Call on EU to put Refugee and Migrant Children First
  8. MIRAIA New Vision on Clean Tech: Balancing Energy Efficiency, Climate Change and Costs
  9. World VisionChildren Cannot Wait! 7 Priority Actions to Protect all Refugee and Migrant Children
  10. ANCI LazioRegio-Mob Project Delivers Analysis of Transport and Mobility in Rome
  11. SDG Watch EuropeCivil Society Disappointed by the Commission's Plans for Sustainable Development Goals
  12. PLATO15 Fully-Funded PhD Positions Open – The Post-Crisis Legitimacy of the EU (PLATO)