Europe: From the Crash to Covid and Beyond

‘From the Crash to Covid and Beyond’ is the thirteenth publication in Social Justice Ireland’s European Research Series.  The data in this report surveys trends between the financial crisis of 2008 up to the ongoing Covid-19 pandemic.  In fact, one of the key findings of this report - that the European Union itself and many member states never fully recovered from the crash of 2008 - should inform investment policy at EU level as work on rebuilding our society and economies gets underway. 

In this time of unprecedented crisis, the European Union must heed the lessons from the financial crash of 2008.  Twelve years on from the last major shock, and after seven years of continuous growth, the first year of Covid-19 has seen the European Union confront:

 

• 14.9 million people unemployed
• 5.8 million people long-term unemployed (representing over 37 per cent of total unemployment across the EU, a cause for concern)
• 2.9 million young people aged under 25 unemployed (the highest rates are in Spain, Greece and Italy)
• 84.5 million people living in poverty (over 3.5 million more people than in 2008) - of whom over 18.7 million are children (one fifth of Europe’s children are living in poverty).

It is vital that the path to recovery involves utilising positive economic momentum to deliver on new and more effective rights given many ongoing challenges and macro-level developments such as automation and increasing precarity.

‘From the Crash to Covid and Beyond’ is the thirteenth publication in Social Justice Ireland’s European Research Series.   This report analyses performance in areas such as poverty and inequality, employment, access to key public services and taxation.  These areas are examined in light of the key social policy responses of the European Union to the financial crisis of 2008 including the social investment package, as well the more recent pandemic-related European Recovery Plan.

Main Findings: Health

• In international terms, European countries stand out globally as leaders in health care and provision EU citizens enjoy near-universal access to healthcare.  However, since 2008 many people in the EU experienced an erosion of health coverage which has only become more starkly evident in the wake of the coronavirus pandemic.
• In Greece, for example, nearly 2.5 million people lost access to health services during the crisis due to unemployment or inability to pay health insurance contributions before remedial legislation restored coverage for the whole population in 2016. As a result of this, when the pandemic hit in spring 2020, Greece possessed just 560 Intensive Care Unit (ICU) beds to serve a population of 10.7 million. Rebalancing sharp inequalities between public and private healthcare through the temporary nationalisation of private health care facilities in November 2020 and March 2021 played an important role in ensuring Greece could effectively withstand the second and third waves of the pandemic.
• Large inequalities in life expectancy persist not only by gender (women still live nearly 5.5 years more than men on average), but also by socioeconomic status; on average across EU countries, 30-year-old men with a low education level can expect to live about 7 years less than those with a university degree or the equivalent.
• Large inequalities also exist in how people experience chronic disease: in the EU, 27 per cent of people aged 65 and over in the highest income quintile reported at least two chronic diseases, compared with 46 per cent for those in the lowest income quintile.
• A majority of Member States – twenty-two in total – now face key challenges around the provision of accessible and cost-effective healthcare.
• There is a clear income gradient in terms of unmet healthcare need across the EU.  Data from February and March 2021 tends to confirm this concern with just under half (47 per cent) of all those reporting unmet medical needs citing hospital or specialist care as the service forgone. 
• Experience of the pandemic has affirmed the need for universal access to quality healthcare in the EU and the importance of accessible, efficient and well-resourced primary care and healthcare systems.

Main Findings: Poverty

• 84.5 million people in the EU are living in poverty (over 3.5 million more people than in 2008) - of whom over 18.7 million are children.
• Around one fifth of Europe’s children are still living in situations of income poverty.
• The ability to tackle the challenges of child poverty and youth exclusion will be decisive in Europe’s capacity to guarantee a long-term future to its citizens.
• in 2019 just over 9 per cent of employed people in the EU lived in poverty) and it has been at similar levels since 2014.  This means that about 10 per cent of employed people in the EU live in poverty on an ongoing basis and, obviously, that getting people into work is not always sufficient to lift them out of poverty.
• Some groups are particularly affected (including younger people, people with lower education levels, and non-standard workers, poor households with children including lone parents).
• Financial distress of households (defined as the need to draw on savings or to run into debt to cover current expenditures and based on personal perceptions) is still running at high levels especially for lower-income groups. It stood at 12.9 per cent of the overall population in February 2021, and at 23.7 per cent for those in the lowest income quartile. 
• Overall, while there have been some improvements in the latest years (2018-2021) in several indicators and for key groups, Europe is still far off-track in relation to meeting its poverty reduction targets.
• The social indicators suggest little improvement for very many people living in Europe, with dis-improvements for some groups in several countries. These include older people in some countries, an issue that particularly affects older women.
• Those working who still live in poverty is another group to be concerned about and this issue now affects a greater proportion of people than it did in 2008.
• The position of children, in particular, while improved somewhat continues to be strikingly negative for very many children with potentially very serious long-term consequences.

Main Findings: Employment

• 14.9 million people unemployed, of which 5.8 million people long-term unemployed (representing over 37 per cent of total unemployment across the EU, a cause for concern).
• 2.9 million young people aged under 25 unemployed (the highest rates are in Spain, Greece and Italy).  In April 2021, youth unemployment stood at 17.1 per cent in the EU-27). This represents 211,000 thousand more unemployed people aged 15-24 between April 2020 and April 2021.
• Emergency job-retention measures have unquestionably cushioned the impact of the economic contraction caused by Covid-19 and the public health measures introduced to curb it. 
• Sweden continues to have the highest employment rate in the EU (80.8 per cent in 2020).  The lowest employment rates in 2020 were found in Greece, Italy, Spain and Croatia.
• One-fifth of the EU labour force works part-time, and three-quarters of these are women.  It is notable that around a quarter of those working part-time want to work full-time. 
• In April 2021, youth unemployment stood at 17.1 per cent in the EU-27). This represents 211,000 thousand more unemployed people aged 15-24 between April 2020 and April 2021.
• The EU-27 average NEET rate (young people not engaged in employment, education or training) (ages 15-24) was 11.1 per cent in 2020, which was higher than in 2019. The rate was highest in Italy where almost one in 5 young people is in this situation (19.0 per cent).   
• The NEETs rate for slightly older age groups the picture is even more concerning. The EU-27 average NEETs rate for those aged 20-24, in 2020 was 15.7 per cent.  The fact that the rate is high, and is remaining relatively high, for these ‘older’ NEETs is a trend that should be of concern.

Main Findings: Education

• Early school leaving rates have unfortunately levelled off, the rate stands at 9.9 per cent, marginally below the EU 2020 target of 10 per cent.
• Some groups such as disabled people are particularly vulnerable - the proportion of early school leavers among young disabled people is 23.6 per cent, which is much higher than the rate for non-disabled younger people.
• In 2020 the average rate of participation in lifelong learning was 9.2 per cent, well below the target of 15 per cent. 
• Adult skills matter, because, where large shares of adults have poor skills, it becomes difficult to introduce productivity-enhancing technologies and new ways of working, which in turn stalls improvements in living standards and tends to widen income inequality. Furthermore, in all countries, adults with lower skills are far more likely than those with better literacy skills to report poor health, to be less involved in political processes and to have less trust in others.

Main Findings: Taxation

• As a ratio of GDP, in 2019 tax revenue (including net social contributions) accounted for 40.2 per cent of GDP in the European Union (EU-28). 
• Ten countries had total taxation ratios greater than the EU average of 40.2 per cent (in 2019).  It was highest in France (47.4 per cent of GDP), Denmark (46.9 per cent of GDP), Belgium (45.9 per cent of GDP) and followed by Sweden (43.7 per cent of GDP), Austria (43.1 per cent of GDP), Italy (42.6 per cent of GDP) and Finland (42.3 per cent of GDP).
• The lowest shares were recorded in Ireland (22.7 per cent of GDP), Romania (26.8 per cent of GDP), Bulgaria (30.2 per cent of GDP), Lithuania (30.4 per cent of GDP) and Latvia (31.3 per cent of GDP).
• It must be acknowledged in the case of Ireland that the highly globalised nature of the Irish economy as well as taxation policies pursued inflates GDP as a measure of activity – but even notwithstanding this, Ireland’s ratio compares poorly with many other countries, especially with its peers amongst the older accession countries.
• It is worth noting that amongst the countries with the highest total taxation ratios relative to GDP are some of the countries considered the most competitive in the world. Germany, Sweden and Denmark are amongst the world’s ten most competitive countries and Finland was ranked 11^th.  These are countries that also tend to score highly at protecting their populations from poverty or social exclusion and they tend to be more equal societies in terms of incomes.
• Without raising resources, countries cannot invest in infrastructure and services required to promote inclusion and to sustain development.

Download ‘From the Crash to Covid and Beyond’ here.

Interested in the social rights and the future of Europe? Join us online on Wednesday, 17th November 2021 for our Annual Social Policy Conference where we will have a fantastic line up of national and international speakers discussing the European Pillar of Social Rights.