A Long Walk to Poverty Awareness

Mario Monti opened the meeting with a key note speech which reflected on the role of globalisation in the world and whether or not it is responsible for increasing poverty levels? There have been positive impacts thanks for globalised markets and the parallel developments of globalised governance means that public powers have been able to also organise themselves in parallel to provide global management solutions to global markets. The development of the European project has enabled many barriers to be removed and to stimulate growth, and through the Treaties public policies have been put in place to accompany this and to ensure that the market is not stunted by protectionism, nor that cartels can be formed to abuse a dominant position. Overall globalisation has helped to reduce the unequal distribution of wealth up to now, which has been positive. ‘Third world’ countries have been able to develop because of globalisation, which is positive, but in ‘developed countries’ there has been a growing gap between rich and poor, with the rich becoming very rich and the poor very poor, The development of the ‘third world’ means it is no longer possible for the ‘developed countries’ to use their imperialist policies to exploit them.

However it is not reasonable to blame European « austerity » measures for increased poverty in the EU. Imagine the state of poverty in the Member States if the EU did not exist: in the 1960/70s the public was indifferent to public debt and deficit, and there was no EU Commissioner telling Member States off for their excessive deficit and no public debate about the issue. Thus governments spent beyond their means, placing the debt onto the next generation, who now are often struggling to find work. Are these people victims of « austerity » or irresponsible budgetary policies in the past? Sound, sustainable fiscal consolidation demands a budget which is more or less balanced, over the course of the cycle, with the possibility to go beyond these limits if the investments being made clearly have the potential to create economic growth. This represents common sense.

Those who are against « austerity » want to go back to the old system, often very fruitful for the politicians in the short-term, but with negative effects on the young and future generations in the longer-term. Societal inequalities have to be taken into account, and the market forces which often lead to an unacceptably unbalanced distribution of wealth need to be harnessed through parallel policies, in the form of taxation, which harness the growth and re-distribute wealth. The problems seen nowadays come to a greater extent from a lack of Europe, where there is a refusal at the Member State level to coordinate taxation and reduce tax competition, for example, and to harness the advantages of economic activity for all rather than from European policies being responsible for increased poverty.

A panel discussion followed Mario Monti’s speech.

Sylvie Goulard, intergroup president, made a brief presentation providing an overview of recent actions at European level to fight against poverty and social exclusion, from the Lisbon Strategy through to the creation and implementation of the European Semester. The issue of poverty has entered the consciousness of European decision makers, and there is a will to improve the situation for Europe’s most deprived, as the objective of the EU2020 strategy to reduce the number of people living in poverty or at risk of poverty by 20 million illustrates.

Unfortunately the data collected clearly shows to what extent these positive ambitions are yet to bring positive, concrete results. Instead quite the opposite is unfortunately true; figures show that since 2010 the number of people living in poverty or at risk of poverty has unfortunately increased in the EU. Many questions remain open and need to be reflected on, for example concrete definitions concerning poverty.

Her presentation (see below) examined what fiscal consolidation is, why it is necessary and what effects the choices of national governments have had on different sectors of society, for example spending increases on older people and the impact this has had on budgetary resources for education and families. As Mario Monti had already underlined, tax policy is a very important element of fighting against inequalities and ensuring a better distribution of wealth throughout society. Different tax policies have a range of both direct and indirect effects on Europe’s most deprived, which need to be taken into account. Tax evasion, which remains a big problem in Europe and is deeply unfair on Europe’s citizens who are contributing to society through their taxes, also needs to be tackled, as the Commission has started to do with the decisions concerning Fiat and Starbucks on 21st October.

Reflection needs to continue, both in terms of how the work force is viewed in economic terms and the importance of investing in human capital, but also how to diversify funding opportunities, for example through the private sector, rather than relying solely on public finances as the tool to fight against poverty. Something which is very clear is that effective policies will only be conceived if civil society, including the most deprived, is included in their conception.

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Raymonde Languet and Isabelle Bouyer, representatives of ATD Fourth World in Champagne Ardennes, presented the long battle which ATD has undertaken to try to ensure that social precariousness is legally recognised as a potential source of discrimination. Since 2009 ATD is working to see this element added to the list of discrimination criteria in French law. This is not seen as an end in itself but an important marker and reference point in their fight to end this discrimination. ATD and its members are fighting to allow all members of society, including the most deprived, to live with dignity, not to simply manage to survive. A law proposal to fight against social precariousness was passed in the French Senate in June 2015, and will soon be discussed in the National Assembly.

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Raymonde and Isabelle used poignant examples, experienced by people living in poverty in Reims to illustrate the discrimination suffered because of social precariousness. For example a mother and son where the son started orthodontic treatment with a mutuality but during the treatment changed to having universal health cover (which means you do not have to pay for health care in France). The dentist announced, in the waiting room in front of other patients, that he would no longer treat the boy, and that he had to go to the hospital. Both the mother and son felt great shame. That evening the boy removed his appliance alone in his bedroom and has never worn one since. At 12 years of age he had already experienced public humiliation because his parents receive universal health cover.

It is only by considering Europe’s most deprived as partners that this humiliation and discrimination will stop. If one side considers that they know everything and the other nothing then civic rights will continue to be denied to some in society.

Jorge Nuno Mayer from Caritas Europa recalled that 1% of the world’s population owns more than 50% of global wealth. At the midway point it is clear that the EU is far from reaching its EU2020 objectives. However he also highlighted that the Millennium Development Goals have achieved some positive results, and on an even more positive note, the UN Sustainable Development Goals adopted a few weeks ago focus not just on developing countries but also wealthier countries, like the EU Member States.

This intervention picked up elements of all the other speakers’ points. The need for budgetary balance was underlined, but highlighted the difference in means when talking about the budget of a country and that of a family. Extreme measures have been taken to rescue banks which were in trouble, and it is now essential to ensure that irresponsibility in the financial sector does not continue because it is assumed that the state will always pick up the bill. The figures speak for themselves; although the economic situation seems to be improving slightly poverty continues to rise, as do unemployment figures. Reforms are necessary, but they should have both fiscal durability and social assessments before it is decided to implement them.

Jorge also highlighted some of the success stories which Caritas has put in place in Member States where they are present, which are often highly innovative. For example there is a hotel in Vienna called Magda’s Hotel. Vienna is seeing many refugees arriving, struggling to find work and facing extreme poverty and exclusion. To counter this Magda’s Hotel has been set up as a role model for combatting poverty and creating new jobs for accredited refugees. 20 refugees from 16 countries, speaking 36 languages run the hotel, which is run as a social business rather than for profit. Projects like this illustrate the importance of social investment and how a new vision is needed to assess the potential of GDP growth through exactly these kinds of projects.

The meeting was concluded with the traditional ceremony around the commemorative stone in honour of the victims of extreme poverty.


(c) European Parliament 2015 and Sylvie Goulard’s office