One of the many gaps in the UK’s public debate over membership of the European Union has been the lack of any serious discussion of the EU’s contribution to social policy. Although the British Labour governments of 1997–2010 embarked on a high-profile attempt to reduce child and pensioner poverty through means-tested income transfers, few British commentators have set this initiative in the context of the wider anti-poverty drive which the EU launched at roughly the same time. Since the 2000 Lisbon summit the EU has been formally committed to eradicating poverty, and the Europe 2020 strategy agreed in 2010 set a target of lifting 20 million people out of the risk of poverty or social exclusion by 2020. This important essay collection reflects on the progress which the EU has made in fighting poverty over the last two decades, drawing on research commissioned by the ImPRovE project (2012–16) and financed by the European Commission’s 7th Framework Programme. The contributors make extensive use of cross-national datasets and EUROMOD microsimulations to assess distributional trends and policy effects in EU member states both before and since the 2008 financial crisis.
Much of the value of the volume lies in the detailed empirical evidence which is presented here, but the contributions also focus attention on a number of common themes. Firstly, several chapters reflect on the challenges involved in measuring poverty across the bloc using the three Europe 2020 indicators: the At Risk of Poverty (AROP) threshold developed by Tony Atkinson and his colleagues and adopted at the Laeken Summit in 2001, which is set at 60 per cent of median equivalized disposable income within each member state; an index of Severe Material Deprivation (SMD); and the number of people living in households with very low work intensity. Tim Goedemé et al. (Chapter 1) construct fully specified reference budgets for seven European cities, and find that the AROP relative poverty indicator maps unevenly on to the cost of maintaining a decent living standard: for instance, it is higher than the reference budgets for Luxembourg but well below them in Athens and Budapest. Likewise, Geranda Notten and Anne-Catherine Guio (Chapter 4) point out that ‘income poor and materially deprived populations only partly overlap’ (103), though they show that increased spending on cash transfers has nevertheless has a significant impact on SMD measures in the four countries they examine.
Secondly, contributors trace the shifting distribution of poverty risks within the EU during an age of austerity. Tim Goedemé et al. (Chapter 3) consider the implications of applying the 60 per cent relative income measure at EU rather than national level, and (predictably) find that the lowest incomes are disproportionately found in eastern Europe. However, some of the A10 accession states (particularly Poland) improved their position markedly between 2008 and 2014, whereas falling real living standards in Greece and other Mediterranean countries pushed many citizens in these states below an EU-wide relative poverty line. Manos Matsaganis and Chrysa Leventi (Chapter 6) use decomposition analysis to confirm that tax and spending changes in Greece and other peripheral states between 2009 and 2013 increased poverty rates, though the impact on inequality was more complex because some austerity measures (such as direct tax increases and cuts in public-sector pay) hit better-off households hardest.
More broadly, the contributors show that distributional patterns are still strongly shaped by national policies. The reliance on the relatively soft ‘Open Method of Coordination’ has meant that key social policy choices continue to be made by member states, and the impact of the EU’s non-binding poverty targets has been dwarfed by the constraints which Eurozone membership has imposed on governments’ fiscal autonomy. On the other hand, this does not mean that poverty-reduction efforts have been wholly unsuccessful. John Hills et al. (Chapter 5) show that tax and benefit changes were poverty-reducing in six out of seven countries studied between 2001 and 2011. Several of the chapters also attest to the growing importance of policy transfer within Europe, for instance through the spread of devices such as tax credits. Lane Kenworthy (Chapter 7) provides a valuable survey of recent literature on employment-conditional earnings subsidies, and Dieter Vandelannoote and Gerlinde Verbist (Chapter 11) explore the trade-offs involved in designing in-work benefits by reference to the Belgian context. Though most contributors focus on the relationship between transfer payments, work incentives, and income poverty, Stijn Oosterlynck et al. (Chapter 8) and Axel Cronert and Joakim Palme (Chapter 9) offer valuable refinements to the literatures on ‘social innovation’ and ‘social investment’, and reflect on the potential impact of these strategies.
The conclusions which emerge from this wide-ranging set of studies are downbeat, but not fatalistic. As the editors point out (Chapter 13), it is clear that the impact of EU initiatives on national policies has been patchy, and that the bloc as a whole is unlikely to hit its Europe 2020 targets. The Lisbon-era focus on raising employment and investing in human capital did not always translate into lower poverty rates even before the financial crisis, as András Gábos et al. show (Chapter 2), and fiscal austerity has severely hampered anti-poverty efforts during the subsequent decade. Bea Cantillon et al. (Chapter 12) argue that one of the biggest problems lies in the erosion of traditional social assistance schemes: ‘in nearly all European nations, the comparison of the social floor with the at-risk-of-poverty threshold shows a substantial inadequacy of net income packages for jobless families’ (284). Cantillon et al. suggest that ‘output’ targets are more likely to be met if the EU develops a parallel set of ‘input indicators’, monitoring the level of each state’s minimum wage and social assistance floor in relation to the relevant national AROP threshold. This is a promising idea, though the editors note that moves towards a common framework for social protection ‘would require a significantly greater budgetary effort on behalf of the some of the poorer Member States in Eastern and Southern Europe’ (303). This brings us back, of course, to the perennial issue of European fiscal solidarity.
