Poverty and Social Exclusion in the European South: Conclusions from the European Commission’s Annual Review
The European Commission published on January 15, 2015 the Annual Review on Employment and Social Developments in the European Union (EU). Greece, Ireland, Spain, Italy and Hungary are the member-states where poverty and social exclusion have marked the highest increase. These member-states had demonstrated striking weaknesses in these fields already since the 2011 and the first, strong signs of economic recession in the EU.
More precisely for Greece, the population placed at the bottom poverty line and social exclusion increased from 28,1% in 2008 to 35,7% in 2013, while exclusion from basic goods was also increased from 11,2% to 20,3% for the same period of time. Long-term unemployment surged from 3,7% in 2008 to 18,6% in 2013, and the employment rate for the active population (i.e. 25-64 years old) decreased respectively from 61,9% to 49,3%.
Furthermore, transition rate from part-time to full-time job positions was one of the lowest in the EU for Greece, Spain, France and Italy, while in Greece and Portugal 25% of those being employed in part-time positions ended up in unemployment. In this respect, in all previous member-states, a great majority of workforce face serious burdens in properly and effectively balance between job life and life outside the working environment, a fact that increases risks for mental health in the long run. Notwithstanding, one of the major side effects of the economic recession is education, as the majority of member-states have reduced or stalled public or private spending in this policy field.
From the Annual Report of the European Commission we can come to the following conclusions:
a. The markets being less exposed to grey economy, having developed a business-friendly environment, with strong export presence and more secured collective agreements have withstood the devastating effects of economic recession;
b. The markets being more exposed to macroeconomic turbulences, under tough consolidation programs, having an excessive debt to manage, are prone to even bigger economic and political instability;
c. Poverty and social exclusion are two of the major consequences of economic recession, with the European South demonstrating the weakest performance. In such cases, education spending and consumption are negatively affected, generating a rather asphyxiating condition for the segments of the population that suffer the most.
In such unprecedented economic and social conditions for the EU, there is a number of policy remedies / proposals that need to put at the top of the agenda in the forthcoming EU Summits:
a. Debt relief policies have to be further explored and implemented in Greece, Italy, Spain, Portugal and France;
b. Direct and indirect taxation rates need to be lowered for a specific period of time so that consumption and investments could be triggered;
c. Junker’s Investment Pact has to be more specific, time-oriented, and concise in its implementation, with special emphasis on the weakest member-states of the European South.
 Annual Review on Employment and Social Developments, http://europa.eu/rapid/press-release_IP-15-3321_en.htm