Austerity policies are leading to a massive increase in poverty and inequality in European countries, causing damage that will take two decades or more to reverse, according to a report from Oxfam GB. It warns that 25 million more people could be pushed into poverty in Europe by 2020.
- Income inequality was increasing in many European countries even before the financial crisis began. But now the European social model is under attack from ill-conceived austerity policies. Left unchecked, these measures will undermine Europe’s social gains and entrench poverty for a generation.
- Austerity programmes across Europe have dismantled the mechanisms that reduce inequality and enable equitable growth. The poorest groups have been hit hardest, as the burden of responsibility for the excesses of past decades is passed to those most vulnerable and least to blame.
- In 2011, 120 million people across the EU faced the prospect of living in poverty. Oxfam calculates this could rise by at least 15 million, and perhaps by as much as 25 million by 2020, as a result of continued austerity measures. Women will be the hardest hit. If current trends continue some countries in Europe will soon have levels of inequality that rank among the highest in the world.
- The European experience bears striking similarities to the 'structural adjustment' policies imposed on Latin America, south-east Asia and sub-Saharan Africa in the 1980s and 1990s. Countries in these regions were given financial bailouts in return for agreeing to measures including wage and public spending cuts. These policies led to stagnating incomes and rising poverty in many countries, scarring generations across the world. Meanwhile, the share of income of the richest in society increased rapidly.
- The report calls on European governments to follow an alternative path and invest in people and economic growth, invest in public services, strengthen institutional democracy and build fair tax systems.
Source: Teresa Cavero and Krisnah Poinasamy, A Cautionary Tale: The True Cost of Austerity and Inequality in Europe, Oxfam GB
Links: Report | Oxfam press release | Guardian report