A new comprehensive study launched on 5 March by the European Trade Union Institute (ETUI) and the European Trade Union Confederation (ETUC) confirms growing forms of social inequality in all EU member states. This worrying trend is the result of long-term policy choices for market liberalism and the prioritisation of harsh austerity programmes as a result of the financial and fiscal crisis post-2008.
The Benchmarking Working Europe 2012 report sees rising inequalities also happening in traditionally more “egalitarian” societies and points to a reversal of historical trends for poor(er) EU regions to catch up and converge with rich(er) ones. The report also criticises that an increasing number of workers (in particular young workers) are getting trapped in insecure and sub-standard contracts.
Growing inequalities in Europe also have a direct negative effect on the EU’s low-carbon transition and its climate/energy policies as member states face financial pressures and therefore lack the means to develop strong resource productivity programmes and poor households are facing serious housing, heating and energy challenges.
The report states that the EU’s discourse that new post-crisis growth will solve the “temporary” phenomenon of rising inequalities is fundamentally flawed. The link between growth and equality has snapped and the tide is no longer rising for all.
ETUI believes there will be no lasting way out of the crisis in the absence of a reduction in inequality. Policy remedies for exiting the crisis should therefore focus on redistribution and “deconcentration” of wealth.
Manos Matsaganis and Chrysa Leventi (Athens University of Economics and Business)
Eloi Laurent (OFCE)