Up to 25 million more Europeans are at risk of sinking into poverty by 2025 if governments push on with austerity measures, international aid agency Oxfam warned on Wednesday, calling such policies “moral and economic nonsense.”
“Europe’s handling of the economic crisis threatens to roll back decades of social rights,” said Natalia Alonso, head of Oxfam’s EU office. “Aggressive cuts to social security, health and education, fewer rights for workers and unfair taxation are trapping millions of Europeans in a circle of poverty that could last for generations. It is moral and economic nonsense.”
“The only people benefiting from austerity are the richest 10 percent of Europeans, who alone have seen their wealth rise,” Alonso said. “Greece, Ireland, Italy, Portugal, Spain and the UK — countries that are most aggressively pursuing austerity measures — will soon rank amongst the most unequal in the world if their leaders don’t change course.”
“For example, the gap between rich and poor in the UK and Spain could become the same as in South Sudan or Paraguay,” Alonso added.
If left unchecked, austerity policies could put between 15 million and 25 million more Europeans at risk of poverty by 2025, the agency said.
“This would bring the number of people at risk of poverty in Europe up to 146 million, over a quarter of the population,” warned Oxfam ahead of a EU finance ministers meeting in Vilnius.
Oxfam said that there are lessons to be learned from the deep cuts made to social spending in Latin America, Southeast Asia and Africa throughout the 1980s and 1990s, noting that some countries in those regions took two decades to claw their way back to square one.
“There are alternatives to austerity. Ahead of [today’s] EU finance ministers’ meeting, we’re calling on European governments to champion a new economic and social model that invests in people, strengthens democracy and pursues fair taxation,” Alonso said. “Governments could raise billions for public services, such as health and education, by taxing the wealthiest and cracking down on tax dodging.”
“A new model of prosperity is possible. Investing in schools, hospitals, housing, research and technology, millions of Europeans could be put back to work and support a sustainable economy,” Alonso added.
“We are going to listen to all the countries that have been bailed out,” to see what progress has been made and what more needs to be done, one European government source said.
Twice-bailed out and still struggling Greece may get the most attention as the 17 ministers gather in Vilnius for informal talks followed by a meeting with their non-euro zone peers.
Ministers are also set to discuss how to help Ireland as it exits its rescue at the end of this year. Portugal is also a cause for concern after parts of its bailout program were ruled illegal.
They will also review progress in Cyprus, bailed out earlier this year for about 10 billion euros via a controversial rescue which saw creditors, shareholders and large depositors forced to pay to wind up one of its largest banks.