A long walk to poverty awareness 21/10/2015 EP Intergroup - - PowerPoint PPT Presentation

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A long walk to poverty awareness 21/10/2015 EP Intergroup - - PowerPoint PPT Presentation

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Public meeting to mark the International Day for the Eradication of Poverty A long walk to poverty awareness 21/10/2015 EP Intergroup Fighting Against Poverty - International Day for the Eradication of Poverty 2015, Brussels 21/10/2015

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Public meeting to mark the International Day for the Eradication

  • f Poverty

« A long walk to poverty awareness »

21/10/2015

EP Intergroup Fighting Against Poverty - International Day for the Eradication of Poverty 2015, Brussels 21/10/2015

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This presentation does not claim to set out an exhaustive examination of the subject, nor to be a scientific work, but rather to find patterns for thought and discussion.

EP Intergroup Fighting Against Poverty - International Day for the Eradication of Poverty 2015, Brussels 21/10/2015

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1957 : Treaty of Rome

  • The signatory Heads of State affirm “as the

essential objective of their efforts the constant improvements of the living and working conditions of their peoples” (Preamble, Treaty of Rome)

EP Intergroup Fighting Against Poverty - International Day for the Eradication of Poverty 2015, Brussels 21/10/2015

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Europe’s First Efforts

  • 1987: Program for European Aid for the Most

Deprived (PEAD): makes surpluses from the Common Agricultural Policy available for distribution to Europe’s most deprived.

  • Commission President Jacques Delors, who

considers solidarity a priority, develops and strengthens European funds (notably cohesion), in order to offset the market.

EP Intergroup Fighting Against Poverty - International Day for the Eradication of Poverty 2015, Brussels 21/10/2015

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2000: EU adopts Lisbon Strategy

  • Objective: "sustainable economic

growth with more and better jobs and greater social cohesion.“

  • New element: flexicurity: it is the worker

who needs protection and assistance to either transition successfully in his/her existing job or move to a new job.

EP Intergroup Fighting Against Poverty - International Day for the Eradication of Poverty 2015, Brussels 21/10/2015

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2010: EU adopts EU2020 Strategy

  • 1st specific poverty reduction target at EU

level: at least 20 million fewer people in or at risk of poverty and social exclusion.

  • Creation of European platform against poverty

and social exclusion.

EP Intergroup Fighting Against Poverty - International Day for the Eradication of Poverty 2015, Brussels 21/10/2015

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2011 European Semester created - a yearly cycle of economic policy coordination

  • A dialogue between the Commission and

Member States on the adoption of national budgets.

  • First scoreboard with economic and social

indicators created.

EP Intergroup Fighting Against Poverty - International Day for the Eradication of Poverty 2015, Brussels 21/10/2015

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Assessment of EU action since 2000

  • Results clearly show that insufficient progress has been made.
  • 2000: Lisbon Strategy: intended 70% employment rate and 3% of GDP

spent on R&D not achieved.

  • Increased employment results have not sufficiently helped to lift the most

excluded out of poverty. Low-skilled workers still face insurmountable barriers.

  • In 2010 there were 23,7% of the EU population at risk of poverty and

social exclusion in the EU.

  • In 2014 there were 24,4% (122 million people).
  • The crisis has hit Europe’s most deprived citizens hardest.

(Source: Eurostat)

EP Intergroup Fighting Against Poverty - International Day for the Eradication of Poverty 2015, Brussels 21/10/2015

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Open questions

  • 1. Definition of poverty?
  • 2. Impact of fiscal consolidation by population

category?

  • 3. Impact of tax policies on the most deprived?
  • 4. The impact of reduced public investment on

the most deprived?

  • 5. Other ways to tackle poverty without extra

public money?

EP Intergroup Fighting Against Poverty - International Day for the Eradication of Poverty 2015, Brussels 21/10/2015

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  • 1. Definition of poverty?
  • Often income indicators are used rather than poverty
  • indicators. Eurostat: "this indicator does not measure wealth
  • r poverty, but low income in comparison to other residents in

that country."

  • Does not assess, for example:

– Access to public services – Health – Education

(source : François Bourguignon, « Du revenu aux dotations : le renouvellement des conceptions de la pauvreté », Regards croisés sur l’économie 2008/2, p. 34-42)

EP Intergroup Fighting Against Poverty - International Day for the Eradication of Poverty 2015, Brussels 21/10/2015

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2.1 Impact of fiscal consolidation by population category?

  • Austerity, or fiscal consolidation: combination
  • f cuts in public expenditures and tax

increases.

  • Needed in order to avoid bankruptcy in

vulnerable countries.

EP Intergroup Fighting Against Poverty - International Day for the Eradication of Poverty 2015, Brussels 21/10/2015

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2.2 Impact of fiscal consolidation by population category?

  • Expenditure on education, family

and children decreased significantly in the Member States hardest hit by the crisis

  • Expenditure on old age has

increased

  • ‘increasing generational divide’

(Darvas & Tschekassin)

EP Intergroup Fighting Against Poverty - International Day for the Eradication of Poverty 2015, Brussels 21/10/2015

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2.3 The impact of fiscal consolidation on the most deprived?

  • Relation between discretionary fiscal effort and severe material

deprivation

(Source: Darvas, Zsolt and Tschekassin, Olga (2015) ‘Poor and under pressure: the social impact of Europe’s fiscal consolidation‘, Bruegel policy contribution 2015/04, Bruegel)

EP Intergroup Fighting Against Poverty - International Day for the Eradication of Poverty 2015, Brussels 21/10/2015

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  • 3. The impact of tax policies on the most

deprived?

Direct impact of tax policies:

  • EU Commission suggests moving the tax burden from labour towards

consumption (taxes on spending on goods and services, e.g. VAT)

  • Yet, the poor are the most vulnerable to tax increases on consumption

(Source: Darvas, Zsolt and Tschekassin, Olga (2015) ‘Poor and under pressure: the social impact of Europe’s fiscal consolidation‘, Bruegel policy contribution 2015/04, Bruegel)

Indirect impact of tax policies:

  • Tax evasion remains a long-lasting scandal in the EU – Fiat and Starbucks

judgements pronounced today, Apple and Amazon still to come.

  • Less taxes on labour should promote employment, according to the EU

Commission

EP Intergroup Fighting Against Poverty - International Day for the Eradication of Poverty 2015, Brussels 21/10/2015

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4.1 The impact of reduced public investment on the most deprived?

  • Crisis : drop in investment, in 2014, total investment was about 15% below

the level of 2007. (EU Commission and EIB, ‘Why does the EU need an investment plan’ Factsheet,

[URL: http://ec.europa.eu/priorities/jobs-growth-investment/plan/docs/factsheet1-why_en.pdf]

  • How to find the right balance between the immediate needs and future

long-term needs?

  • Financial discipline is necessary and requires difficult decisions and cuts:

but it is not possible to continue to live beyond our means in the long- term.

  • Irresponsible to place the burden on the next generation.
  • "Productive investment" is key, but how should this be defined? How to

ensure that all members of society will benefit?

EP Intergroup Fighting Against Poverty - International Day for the Eradication of Poverty 2015, Brussels 21/10/2015

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4.2 Investment in human capital?

  • Human capital: the knowledge, skills, competencies and attributes embodied in

individuals that facilitate the creation of personal, social and economic well-being (OECD definition)

  • Benefits:

– Individuals (employment, earning, life satisfaction) – Enterprises (productivity) – Society (economic growth, social cohesion)

  • Which notably are acquired through education, including life-long education

(vocational training for example)

(Source : Developed based on CEDEFOP (2013), Boarini et al (2012) and Heckman and Kautz (2013))

EP Intergroup Fighting Against Poverty - International Day for the Eradication of Poverty 2015, Brussels 21/10/2015

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4.3 Inequalities and economic growth

  • High wealth concentration limits investment
  • pportunities.
  • The rise of income inequalities between 1985-2005

estimated to have knocked 4,7% off cumulative growth between 1990-2010 on average across OECD countries. (source : OCDE report In It Together: « Why Less Inequality Benefits All », 2015)

EP Intergroup Fighting Against Poverty - International Day for the Eradication of Poverty 2015, Brussels 21/10/2015

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  • 5. Other ways to tackle poverty

without extra public money?

  • Why are available funds not claimed by those

who could? (Lack of information? Too complicated? Pride?)

  • How to involve the private sector? Are social

public policies sufficient to achieve the EU2020 poverty target?

  • Importance of cooperation with civil society,

including deprived person, to design policies.

EP Intergroup Fighting Against Poverty - International Day for the Eradication of Poverty 2015, Brussels 21/10/2015