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The growing crisis in Europe

Since the implementation of austerity measures in Greece, 93% of households have registered a significant reduction in household income, 40% of households have at least one unemployed family member and many more struggle to pay their bills.

Caritas European Conference

Since the implementation of austerity measures in Greece, 93% of households have registered a significant reduction in household income, 40% of households have at least one unemployed family member and many more struggle to pay their bills. In Portugal, users of Caritas have doubled in the last year, whilst in Ireland there are now around 733,000 people, or 16% of the population, at risk of poverty.

These are just some of the depressing figures presented at the Caritas Europe Conference attended by ESN Policy officer Alfonso Lara Montero on the 21 February at the European Economic and Social Committee in Brussels. The meeting saw the launch of the report entitled “The impact of the European crisis" analysing the impact of austerity measures on society, specifically in Greece, Ireland, Italy, Portugal and Spain. The main findings of the study reveal that a majority of EU Member States are not honouring the social objectives within the Europe 2020 strategy, mainly as a result of budgetary cuts and plans for short term fiscal consolidation.

In response to the report’s conclusions, the Conference aimed to address two main questions:

  • How can the EU stimulate inclusive growth through the European Semester?
  • What are the most effective responses that the EU can adopt to counteract the worsening situation in Member States most affected by the crisis?

Egbert Holthuis from DG Employment at the European Commission referred to the Annual Growth Survey, the Commission’s annual examination of growth and economic governance in preparation of the European semester, as well as the Commission’s new Social Investment Package as potentially useful tools available to Member States as part the European Semester.

Veronica Lope Fontagne, Spanish MEP and Rapporteur on the employment and social issues in the Annual Growth Survey, highlighted that some Member States had not adopted the country specific recommendations issued by the Commission in 2012 and announced that the European Parliament will be preparing two reports in March and April looking at the social aspects of economic and employment policies. She argued that the European Parliament should be involved on an equal footing with the European Council in the drafting of the Annual Growth Survey as a means of ensuring a greater focus on social objectives in the future.

Elena Flores from DG Economic and Financial Affairs at the Commission told the audience that structural reform programmes taking place in some Member States at a time of very low growth should implement policies to mitigate the negative effects of the crisis while also promoting burden sharing. This is especially the case in Portugal, where the minimum eligibility period for unemployment benefits has been reduced, while certain job related taxes have been increased.

During the final panel session, Frank Vandenbroucke, Professor of Economics at Leuven University, argued that whilst previously the European project was about convergence, this is not the case today if we look at the rate of poverty across Europe. He added that while the Europe 2020 strategy is a valuable framework for promoting change, Member States are falling behind in adopting the relevant measures to achieve the education, employment and poverty targets set by the strategy.

“This crisis is not a natural disaster, it is a man-made socio-economic disaster (…) We are calling today for leadership from European politicians and decision makers", stressed Jorge Nuño-Mayer, Secretary General of Caritas Europa.

ESN has been working more closely with Troika countries who have been most affected by the crisis. Most recently ESN spent three days in Greece meeting with representatives of central and local government and visiting local services agencies.

Resources

Caritas Europe report: 'The impact of European crisis' (February 2013)