Home > Uncategorized > Poverty in the European Union: on the increase

Poverty in the European Union: on the increase

Recently, Eurostat published new data on ‘people at risk of poverty or social exclusion‘ (see the publication for operational detail). The database shows that up to and including 2012 poverty increased almost everywhere in the EU, aside for Romania and Poland which devaluated their currencies, for one thing, and which were more or less shunned by the banks before 2008 because of the fragmented nature of their financial systems which meant that financial bubbles were largely absent. Important points: (a) Increases were often large, (b) differences in levels between countries are large and (c) poverty increased almost everywhere, especially in austerity countries (countries marked with an asterix showed a decline of poverty in 2012).

Poverty

Technical detail: the increase is calculated as the difference between 2007, 2008 or 2009 with the years with the highest rate of poverty (most often but not always: 2012). Latvia showed a very large 5% poverty decrease in 2012, despite this Latvia still is one of the EU countries with the highest rate of poverty. Note that the Greek increase occured despite a very considerable decline of the poverty threshold! Bulgaria knows the highest poverty rate of the EU (almost 50%), almost twice as high as for instance th Polish rate

According to Deirdre McCloskey, poverty (and growth) is a much more important problem than inequality as the historical record shows that the lifting tide Tsunami of economic growth rises all boats (well, at least the very large majority), a rise much larger than any redistribution of national wealth could accomplish. But arguments against wealth inequality are not arguments pro redistribution. I, for one, can envisage a rules based writing down of loads of debts in the European Union, which would actually lower the total amount of wealth (as wealth owners, like my pension fund, would have to face haircuts). This would enable a redirection of the flow of money towards production and income again in stead of towards servicing zombie debts based upon a past era of house price inflation and Ponzi mortgage borrowing and lending. It would lead to a society with less debt and wealth but higher employment and lower unemployment. As well as less poverty, more equality and more dynamism – the German Wirtschaftswunder (based upon writing down German debt and i.e. lower wealth for the holders of this debt) is the historical example of such a situation. Arguments against wealth inequality are not necessarily arguments in favour of redistribution of wealth.

  1. Bruce E. Woych
    May 29, 2014 at 5:04 pm

    http://en.wikipedia.org/wiki/Economy_of_Poland ECONOMY OF POLAND
    (EXCERPTED SUMMARY)
    “Since the global recession of 2009, Poland’s GDP continued to grow. In 2009, at the high point of the crisis, the GDP for the European Union as a whole dropped by 4.5% while Polish GDP increased by 1.6%.[24] As of November 2013, the size of EU’s economy remains below the pre-crisis level, while Poland’s economy increased by a cumulative 16%.[24] The major reasons for its success appear to be a large internal market (in terms of population is sixth in EU) and a business friendly political climate. The economic reforms implemented after the fall of communism in the 1990’s have also played a role; between 1989 and 2007 Poland’s economy grew by 177%, faster than other countries in Eastern and Central Europe, while at the same time millions were left without work.[24]

    Another factor which allowed the Polish economy to avoid the financial crisis was its low level of public debt, at about 50% of GDP, below the EU average (around 90%).[24] Strict financial regulation also helped to keep household and corporate debt low. Furthermore, unlike many other European countries, Poland did not implement austerity but rather boosted domestic demand through Keynesian policy of tax cut, and foreign-assistance funded public spending.[24] An additional reason for its success lay in the fact that Poland is outside the Euro zone. The depreciation of the currency, the złoty, increased international competitiveness and boosted the value of Poland’s exports (in złotys).[24]”
    ——————————————–
    “Having won an absolute majority in the new parliament based on a broad rejection of the austerity programme imposed by the conservatives, the Social Democratic Party (PSD) and their coalition partners, the National Liberals (PNL), are now set to continue and deepen austerity measures in line with the demands of the country’s international creditors.”
    [EXCERPTED FROM: http://www.wsws.org/en/articles/2013/01/24/pont-j24.html Romanian government announces new round of austerity measures
    By Andrei Tudora and Tina Zamfir
    24 January 2013

  2. Ack Nice
    May 30, 2014 at 11:28 am

    “Arguments against wealth inequality are not necessarily arguments in favour of redistribution of wealth.”

    Because: Justice – Oh yeah THAT old worn-out idea – Who wants or needs justice, we don’t need no steenking justice!

    ?

    Because: Everybody knows that of course we can have safety, prosperity, sustainability, freedom, liberty, fraternity, democracy, order, good government, security, health, peace and happiness without justice!

    ?

    Because: Who cares that the wealthpower giants have over 30 trillion dollars in stolen wealth they took off working families globally for generations, hidden away in tax havens? That fact is of no consequence in the human liberty equation

    ?

    Because: Leaving all the stolen loot in the hands of the robbers means they will not use it to always keep devouring governments and manufacturing more new legal thefts

    ?

    Because: There’s nothing really wrong with the fact that the biggest cause of death of children in Africa is simple lack of a clean glass of water to drink, while the privately-owned nuclear-powered submarines are on back order

    ?

    Because: The fact that every 5 seconds every day right round the clock another wholly innocent babe under the age of 5 dies the lingering, tortuous, excruciating, perfectly known to be perfectly preventable death by simple lack of fairpay for their working parents to purchase the means to keep them alive just doesn’t matter – to even one economist on this planet

    ?

    Because: It sure as shootin’ aint the children of professional economists who are being sacrificed in the millions on the altar of the indefensible as it is lethal overpayunderpay ratio economists haven’t the consciousness, good sense, nor soul to condemn without equivocation

    ?

    Because: Justice belongs not inherently to the globe’s working families but is the province of the economics profession to dole out or not at the economists’ whim and fancy

    ?

    Because: those who are fond of thinking of themselves as “post-autistic” economists are just as completely insanely autistic as what they criticize

    ?

    Because: economists have the unquestionable right to go on playing with the lives of Earth’s workingpoor families like we were nothing more than pixels in their favorite violent video game

    ?

    Because: the last frozensolid sea on this planet will be the economics profession

    ?

    Because: the truth about money, work, and wealth has so few moving parts it is hard for people to see it behind the squillions of manufactured rube-goldberged parts the economists erect to obfuscate reality and what matters

    ?

    Because: university economics departments are the leading cause of brain damage

    ?

    Because: If you ask a small child “what time is it when the house is on fire?” they will say “It is time to get out of the burning house, of course!” but if you ask an economist the same question they will say it is time to convene a conference in the living room to discuss and debate how fast the flames can be predicted to spread to each room according to each of their beloved pet theories and models?

    ?

    Because: when the canapé’s catered for their livingroom conference start to toast the economists will submit papers telling the world they have discovered by their due diligence that canapé’s taste better when toasted?

    ?

    Because: economists are so ubiquitously panblind they actually named this place “REAL WORLD”

    ?

    Because: This entire universe is shot right through with higher intelligence and only professional economists are impervious to it?

    ????????????

    Newsflash for the Ladies and Gentlemen of the economics profession:

    THE HOUSE IS ON FIRE! IT IS TIME TO GET OUT OF THE BURNING HOUSE!

    this message brought to you by the mothers and fathers and children of the world’s working families

    …who will still be going to church and waving at the royals in their passing glittering carriages after we have strangled the last politician with the guts of the last economist

    hava nice weekend, y’all

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