UN report reveals nearly seven million more people, including over 800,000 children, have fallen into poverty due EU economic policies over the last six years
The disastrous effects of the EU drive to cut budgets and slash public spending are detailed in a 357-page World Social Protection report by the UN agency, the International Labour Organisation.
“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 EU austerity-driven nations like Ireland, Cyprus, Greece, and Portugal have seen their disposable incomes plummet, leading to lower consumption.
In Greece, salaries dropped 35 per cent since 2008 while unemployment increased by 28 per cent while welfare services are being replaced with a system that limits the responsibility of the Greek state.
The ILO notes that the emphasis has been disproportionally placed on the fiscal objective of balancing public budgets “without due consideration to the objective of adequate benefits to all people”.
EU policies have given rise to persistent unemployment, lower wages and higher taxes, boosting poverty and social exclusion rates, which now affects some 123 million people or 24 per cent of the EU population.
“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 has admitted that unemployment has increased to close to 26 million, including 5.3 million young people and around half of the unemployed have been without a job for more than a year.
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