EAPN General Assembly: Workshop 1: Social Progress in a time of Crisis.

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 newsocial 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 populationat 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, 6.10.08) • 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 pathwayto 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 www.eapn.eu For more information contact: Sian Jones, Policy Coordinator. European Anti Poverty Network (EAPN) Tel: 00 32 2 226 5859 E-mail: sian.jones@eapn.eu Visit our website: www.eapn.eu