1. EAPN General Assembly: Workshop 1: Social Progress in a time of Crisis.
Causes of the Crisis and
Proposals for Change for 2010
Sian Jones, Policy Coordinator, EAPN.

2. Outline
Impact of the crisis on the poor
Tackling the causes as well as impact
How far has Lisbon delivered on poverty?
2010 – Key Challenges
EAPN Proposals for 2010 and beyond.

3. Impact of crisis on poverty?
Uneven impact – UK, IE, BE, ES first, but now new member states, particularly Baltic states (Lithuania, Latvia, Hungary)
Most obvious impact – decline in growth leading to loss of job’s
Most precarious hit first, with short-term working/enforced holiday – not always with pay recuperated through social protection.
Difficult to judge full social impact - lack of data although SPC analysis useful
Focus on new poor hides worsening situation for 79 million people already in crisis.

4. Broader social impact hidden
Growth in indebtedness/action of loan sharks – but no integrated support.
Homelessness linked to credit crunch, job loss with pressure on already restricted rental market.
Contradictory tendencies on prices – reduction in luxury goods, electrical goods but rises in food and energy – new area for speculation.
Economic Recovery plans defending existing industry/ investing in infrastructure and low-carbon – not in new social services.
Regressive Activation strategies penalising unemployed with benefit cuts when no jobs to go to.

5. What about the causes? – Short term
Immediate causes:
too little financial regulation,
too easy credit
too little transparency,
detachment of virtual from financial economy:

6. What about the causes? Long Term
Underlying Causes:
Flawed Neo-liberal theory (A. Greenspan)
Moral turpitude/Greed
Failure of redistribution mechanisms (people and regions)
Supported and underpinned by Lisbon Strategy (post 2005).

7. What happened to the Lisbon pledge?.
Original objectives of Lisbon strategy 2000:
«  create the most competitive and knowledge-driven economy in the world, capable of sustainable economic growth, with more and better jobs and greater social cohesion »
Commitment to make a decisive impact on poverty by 2010.
Change in 2005 to focus on Growth and Jobs
Trickle down theory to impact on social cohesion – is it working? Is this the right basis for future strategies?

8. Lisbon’s Success
Between 2001 and 7, average growth of 2.1%
Employment Growth reached 1.8%.
Employment Rate increased to 65.4% - mainly through employment of women (58.3%) in PT work
Unemployment from 8.6% to 7.1% by 2007
Long term unemployment from 4% to 3%.
But with the economic crisis – what remains?

9. Has this delivered social inclusion?
16% of EU population at risk of poverty – 78 million people
No significant decrease since 2000 (15% in 2001, Old MS), increases in AT, BE, NL, UK and PL.
Higher poverty risk faced by women (17%), children (19%) and older people (19%)
Value of poverty threshold varies – 558 EU for single person Rumania/ compared to 17, 087 in Luxembourg.
Inequality gap rising – with SE, SL, CZ, DK, FI, AT and LU with lowest gaps and highest gaps in PL, LA, LI, PT.
In 2006, income of richest 20% nearly 5 times higher than income of the poorest 20%.
Poverty risk is highest where greatest income inequalities

10. Challenging the myths: 1. Better growth leads to social inclusion
“ The assumption that economic growth will raise the adequacy of standards of living of all, just as a tide lifts all boats together, is not often observed in practice” (Commission SWD: Monitoring progress towards the objectives of the European Strategy for Social Protection and Social Inclusion, )
In LT, EE, PL, SK, IE, MT and CY, strong economic growth did not result in big reduction in poverty rates.(2004/5)
In CZ, EL, LU, HU and SE – the poverty rate increased.
“No causal link between growth and living standards for different groups, if no mechanisms established to improve the situation of those at the bottom of the income distribution ( rise in low wages, income redistribution”(European Commission.).

11. 2. A job is the best route out of poverty
Unemployed face higher risk of poverty
41% of unemployed live under poverty threshold
In 2007, 9.4% of children lived in jobless households.
But 8% of people in work at risk of poverty
20% of the those at risk of poverty are in work 12% of the poor are unemployed…..
Why? – low wages, precarious jobs, enforced part-time work.
A job is not enough to guarantee an escape from poverty. Quality work/living wages provide essential floor to sustainable economy

12. 3. Social protection as a cost on growth
Average gross spending on social protection ranges from 15% of GDP ( Baltic States, RO) to more than 28% in BE, DE, DK, and SE. Spending has declined in most MS.
Social Spending reduces risk of poverty by nearly 40%, without it the rate would be 26% (instead of 16%)
Countries with the lowest at risk of poverty rates are those who spend more on social benefits.
Increased expenditure on social protection linked to increased prosperity as measured by GDP per capita
Countries with the highest spending on social benefits/ with the lowest rates of inequality are also generally the happiest!
Effective Social protection systems not only reduce poverty, and increase security, but provide an essential platform for participation, and social cohesion as well as supporting growth.

13. 2010: Key Challenges
2010 – EU year against poverty and social exclusion, 10 years on from Lisbon, new post 2010 strategy
An economic model that has failed to deliver on poverty and prosperity for all and has contributed to the crisis.
A crisis that is exacerbating impact on poor/ and widening gap between old and new poor
No more business as usual – Time for change

14. Short-term solutions – 5 key steps
Reinforcing social protection/ minimum income and access to services.
Defend employment protection and promote Active Inclusion to quality jobs.
Invest in new social/green jobs and social economy.
Guarantee public finance/redistribution.
Invest in Participation and Civil Society.

15. Long-term solutions – post Lisbon 2010- 2020
Tackle the causes not just symptoms.
New vision for the EU and post 2010: economic growth as instrument to deliver public good.
Reinforce priority of social rights over market freedoms – defend public services
Develop social and sustainable model that promotes global equity.
Embed participative democracy now! – NGO’s and people in poverty are a vital part of the solution!

16. EAPN Overarching Proposals.
An EU We Can Trust: New Goals
Put people and planet before profit
Put the economy at service of social and sustainable development
Make the fight against poverty, inequality and social exclusion, a pre-requisite for progress

17. An EU We Can Trust: 3 Key Demands
A new social and sustainable post 2010 EU strategy
A Social Progress Pact – Delivering on rights and solidarity
Building a dynamic partnership for change

18. 1. New Social and Sustainable post 2010 Strategy
New overarching objectives and architecture: promoting social cohesion and fundamental rights delivered through 4 pillars (economic/employment/social/ environmental)
New tools to ensure implementation and political visibility eg poverty targets, new indicators beyond GDP, use of Structural Funds to deliver social inclusion

19. 2. A Social Progress Pact
1. Challenge the causes of poverty – reduce inequality/ share the wealth
Monitoring wealth and income inequality, promoting more progressive distribution and redistribution measures including action against tax evasion/avoidance.
2. Guarantee adequate minimum income, universal social security system and access to services.
Implement Social Rights: Directive on adequate minimum income and on Services of General Interest, Right to a bank account and fair credit/loans, investment in universal social protection for all.
3. Create a pathway to inclusion – Active Inclusion.
Implemented integrated Active Inclusion approaches (adequate income, and access to quality jobs and services.) at national and EU level.

20. Social Progress Pact – cont.
Invest in quality social/green jobs and social economy
Support to new proximity services/ low carbon economy, set targets for quality jobs/ living wages/create infrastructure for social economy.
Challenge discrimination/promote diversity
Strengthen and implement anti-discrimination legislation and promote pro-active measures/develop new integrated migration policy/implement gender pact.
Promote coherent EU approach to global social justice and equity
Implement Aid commitments, back co-responsibility and food sovereignty/effective regulation through UN, promote global social standards.

21. 3. Building a dynamic partnership for change
Implementing participative governance, involving NGOs and people in poverty at all stages of policy cycle.
Ensure financial and other support to NGOs who support/empower people in poverty and provide services.

22. Conclusions.
Tackling the impact of the crisis is not enough – need open debate about causes.
Lisbon/growth model hasn’t delivered on poverty and exclusion in times of boom.
Time for change: Economy as the servant of a new social and sustainable strategy.
Social Progress Pact – EU framework to move forward to deliver key Social Rights – poverty and inequality.
NGO’s and people in poverty – active partners to change.

23. Conclusions

24. Thank you for listening!
For more information see EAPN Position Paper on 2010 soon available on
For more information contact:
Sian Jones, Policy Coordinator.
European Anti Poverty Network (EAPN)
Tel:
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