Originally published on Friends of europe 27/09/2013
27/09/2013
By Natalia Alonso
If left unchecked, up to 25 million more Europeans will be at risk of falling into poverty as a result of austerity measures implemented by a number of European countries. This figure, the equivalent of the Netherlands and Austria’s population combined, would see those suffering from poverty reach 146 million – over a quarter of the population – in a region historically lauded for its attention to public services.
Austerity policies have long been seen as the only viable solution to the huge debt crisis experienced by many European countries, but as unemployment grows to record highs and poverty rates increase, the evidence suggests that these policies are not working. Across Europe the impacts differ, but all add up to the same conclusion.
If left unchecked, up to 25 million more Europeans will be at risk of falling into poverty as a result of austerity measures implemented by a number of European countries. This figure, the equivalent of the Netherlands and Austria’s population combined, would see those suffering from poverty reach 146 million – over a quarter of the population – in a region historically lauded for its attention to public services.
Austerity policies have long been seen as the only viable solution to the huge debt crisis experienced by many European countries, but as unemployment grows to record highs and poverty rates increase, the evidence suggests that these policies are not working. Across Europe the impacts differ, but all add up to the same conclusion.
Some countries such as Greece, which saw a fall in real wages of 10 per cent within the course of a single year, and Spain, currently undergoing cuts equivalent to 11% of its GDP, are taking the worst brunt of the austerity measures. However, even the UK, which many claim is reacting ‘positively’ to the austerity packages, will see more than 1 million public sector jobs cut by 2018 and see wealth gaps become more akin to those of South Sudan than a developed country. Already now, one in ten working households in Europe live in poverty.
As it could take 25 years for Europeans to enjoy the same standard of living they had five years ago, it is becoming clear that austerity is a policy which is both immoral and economically flawed.
We know this because we have seen it before. In the 1980’s and 1990’s we watched how structural adjustment programmes tore apart the economies and civil societies of many South-East Asian, Latin American and African countries with ferocious cuts in public services such as health and education and shocking increases in inequality.
It took Indonesians 10 years for poverty to return to 1997 levels and some Latin American countries have only recently recovered, 25 years since the 1981 economic crisis began. In Europe, eventual return to growth could do little to patch the huge losses in quality of life unless policies to shrink the gap between rich and poor are put in place.
At Oxfam, we strive to help those affected by poverty no matter where they are. It is unsurprising that our experiences all around the world have taught us that, more often than not, it is policy which has the greatest impact on poverty. Austerity is creating more problems than it is solving, but there are alternatives. At Oxfam, we believe in people and only by investing in them can we truly come out of the recession.
We must target employment creation, maintain free public services for those who need them and promote greater participation in both the political and economic system. A fairer tax system must be employed – including a Financial Transaction Tax and policies to curb tax evasion – in order to help us achieve these basic goals. Oxfam is proud to stand with civil society in envisaging a new model of prosperity built on social justice and environmental sustainability, but only with united action can this be achieved.
Natalia Alonso is Head of Oxfam’s EU Office
The issues confronting the EU as it moves forward in a time of economic recession will be further discussed at Friends of Europe's tenth annual high-level roundtable The State of Europe: Tough choices for a troubled Europe on Wednesday, 2 October.
