Eastern Europe frowns at EU ‘poverty’ target

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Eastern EU countries have either rejected or dismissed as irrelevant a planned EU target to reduce poverty, proposed by the European Commission under a ten-year economic plan called 'Europe 2020'. The EURACTIV network reports.

The Commission's proposed target to reduce the number of European citizens living below the poverty line by 25% created tension both inside and outside the EU executive before it had even been unveiled (EURACTIV 01/03/10).

The proposal featured among one of five priorities in a ten-year economic plan unveiled by the European Commission in March, called 'Europe 2020'.

Since its launch, the Europe 2020 blueprint and in particular its poverty target have been criticised at the highest political level in Eastern European EU countries.

Eastern European leaders have expressed fears that the poverty target could downgrade the EU's so-called cohesion policy, which aims to bridge the development gap between rich and poor regions of the EU (EURACTIV 25/03/10).

With an annual budget of around 40 billion euros, cohesion policy represents the second largest section of the EU budget after agriculture (which received 58 billion euros in 2009), and is of particular relevance to poorer Eastern EU members.

EU heads of state and government rubber-stamped the Commission's proposed Europe 2020 strategy at a meeting in March but delayed sensitive discussions on education and poverty, two of five headline goals set out in the original proposal (EURACTIV 26/03/10).

Another summit, to be held on 17-18 June, is expected to adopt further details of strategy, including country-specific targets. But some countries have complained that the timeframe to define these targets is too short.

Bulgaria and Romania: Poor, but not inspired

Romanian President Traian Basescu criticised the European Commission's proposed ten-year economic strategy for lacking a commitment to pursuing the EU's goal of bridging regional development gaps and promoting "unattainable" targets (EURACTIV 27/04/10).

Instead, he said that the Union needed internal cohesion. "Without internal cohesion, [the EU] is not competitive; it does not count in global competition. Romania appeals for accelerating the process of reducing the gaps between the older and the newer members of the EU," he stated.

However, poverty remains an issue in most East European EU member countries, and Romania is certainly one of the countries facing the biggest challenges.

In the Visegrad countries – the Czech Republic, Slovakia, Hungary and Poland – living standards have greatly improved since the fall of communism in the early 1990s. In contrast, many Romanians – like their Bulgarian neighbours – associate the last two decades with a continuous process of impoverishment and deteriorating living standards.

Starting from an official poverty rate of 7% in the beginning of the 1990s, the number of Romanians in this category had tripled by 2008, when the economic crisis began, EURACTIV Romania reported.

"Poverty reduction has never been part of Romanian strategies in the last twenty years," says Professor Catalin Zamfir, director of the Institute for Quality of Life Studies. "There are no clear, focused programmes with such an objective. As a consequence, we are witnessing a serious deterioration on the labour market and great difficulty for people to integrate into society."

As for the future, Professor Zamfir says the neo-liberal strategies professed by the country's elite would never have the objective of bridging the social gap. As a consequence, the country's hopes of achieving the EU's poverty reduction goals are "unrealistic," he said.

As for Bulgaria, the country with the lowest average salary in the EU (€302 per month), official statistics do not reflect the harsh reality.

According to the country's Ministry of Social Policy, a fifth of the population lives below the poverty line. Since the EU average hovers around 17%, the situation may therefore appear normal.

However, according to the KNSB, a trade union, a typical family of two adults and two children needs about €980 to cover all their living expenses, reported Dnevnik, EURACTIV's partner in Bulgaria. According to the trade union, only 11% of Bulgarian households earn this amount or exceed it. Along this line, it would appear almost 90% live below the poverty line, not 20%.

There is also another alarming tendency in Bulgaria: around 636,000 people – or a third of employed citizens – belong to the 'working poor' category, because the average salary in their sector is significantly lower than the national average. Well-educated people such as teachers receive monthly wages of less than €300, and the minimal monthly salary is set at €120. Many retired people live on a minimal pension of €70 per month.

Bulgaria is also the country with the lowest degree of absorption of EU funds, and the fight against poverty does not appear to be in the country's priorities at all. Recently, Regional Policy Commissioner Johannes Hahn indirectly criticised Bulgarian Prime Minister Boyko Borissov for concentrating all his country's efforts on the absorption of funds for road infrastructure and neglecting the 'Europe 2020' targets.

The 'Visegrad Four': Putting hopes elsewhere

By contrast, in the Czech Republic – the Eastern EU country with the highest living standards where the average salary is €1,030 – only 9% of citizens are at risk of poverty. This statistic is questionable, because it represents the lowest poverty rate in the EU.

However, experts explain that this surprising figure is a result of protective measures inherited from the communist era, EURACTIV Czech Republic reported.

Officially, Prague is pushing for EU measures to boost growth and competitiveness, instead of fighting poverty.

"The biggest problem for us was the poverty goal because it did not have any explanatory value and it was not clear where the goal came from," Czech Minister for European Affairs Juraj Chmiel told EURACTIV.cz.

''Poverty will be automatically reduced by fulfilling other objectives of the strategy,'' said Richard Kadl?ák from the government's European Policies Coordination Department.

In Slovakia, the average wage reached €744 per month this year. But the average real wage in the country only reached pre-1989 levels in 2008. The country spends 17% of GDP on social protection (including health care), which is half the EU average.

But Slovakia is not investing much hope in the poverty reduction goal of the Commission ten-year plan. Slovak Prime Minister Robert Fico in fact said that the goals of the 'Europe 2020' strategy, including that of reducing poverty by 25% – are ''illusory''. He even warned that if adopted in its present form, Europe 2020 will have the same fate as the failed Lisbon Agenda.

Ivan Kor?ok, Slovakia's ambassador to the EU, argued that the poverty reduction target should rather be a result of the Europe 2020 strategy than one of its instruments (EURACTIV 25/03/10).

In Hungary, specialists questioned the effectiveness of EU funding designed for the social sphere.

Indeed, at a recent conference hosted by the Alliance of Social Professionals (3sz) in Hungary, several social-sector stakeholders claimed that EU monies from the European Social Fund (ESF) have minimal impact after implementation.

''Sometimes I think that we could even throw the money out of the window and it would have the same effect,'' a source told EURACTIV Hungary.

As for Poland, people there say that the real problem is not high prices, but low salaries. In the biggest of the East European countries, one can hear all kinds of opinions. Some say that the economic and societal situation in the country is very good and still improving.

On the other hand, elderly people and those who listen to controversial catholic, conservative radio station Radio Maryja will tell you that conditions in Poland are catastrophic, EURACTIV Poland wrote.

But for most Poles, their traditional resourcefulness remains the main response to the hardships. And if it turns out that in its present form, Europe 2020 does not appear to suit the Polish interest, Warsaw could well be leading a coordinated offer to achieve a better text, said Jedrzej Bielecki, a Polish journalist, told EURACTIV.

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Eastern EU countries are not alone in giving the cold shoulder to the draft poverty target. In France, the target will have no real impact, officials told EURACTIV.fr.

François Soulage, France's ambassador to the 2010 European Year for Combating Poverty and Social Exclusion, said that "the poverty reduction target of 25% contained in the Europe 2020 strategy will have no impact in France".

France set itself five objectives for 2010 in the context of the European Year for Combating Poverty and Social Exclusion:

  • Contribute to combating all types of poverty and exclusion by enforcing fundamental rights;
  • Include this objective in every policy so as to consider it an essential part of the sustainable development of society, and therefore help contribute to fulfilling the Union's objectives of sustainable economic growth, quality employment and a more cohesive society;
  • Help achieve the national objective to reduce poverty by one third in five years set by the French government in autumn 2007;
  • Promote social inclusion measures contained in PNAI 2008-2011 (National Programme for Social Inclusion), and;
  • Strengthen national ownership of EU tools for combating poverty and social exclusion.

Soulage said that the former French minister in charge of combating poverty, Martin Hirsch, had assured him in February 2010 that the pledges made at the beginning of the year will be honoured, but conceded that there had been no concrete action to date.

Hirsch was sacked in March 2010 after the French regional elections.

The fight against poverty is one of the five priorities of a draft ten-year economic plan unveiled by the European Commission in March, called 'Europe 2020' (EURACTIV 03/03/10).

The strategy defines five headline targets at EU level, which member states will be asked to translate into national goals reflecting their differing starting points:

  • Raising the employment rate of the population aged 20-64 from the current 69% to 75%.
  • Raising the investment in R&D to 3% of the EU's GDP.
  • Meeting the EU's '20/20/20' objectives on greenhouse gas emission reduction and renewable energies.
  • Reducing the share of early school leavers from the current 15% to under 10% and making sure that at least 40% of youngsters have a degree or diploma.
  • Reducing the number of Europeans living below the poverty line by 25%, lifting 20 million out of poverty from the current 80 million.

In a series of articles, the EURACTIV network presented the state of play in individual EU countries on each of the targets. This is a wrap-up of the network articles on the ‘poverty’ target, with a series of articles on the R&D target to follow in the course of May.

  • 17-18 June 2010: EU summit to adopt further details of strategy, including country-specific targets.
  • Autumn 2010: Member states to submit stability and convergence programmes, as well as national reform programmes.

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