Combating Poverty and Social Exclusion in European Union Law

Ane Aranguiz

• Publisher: Routledge
• Year: 2022
• ISBN:
  9781000563528
• Edition: 1
• Topic: Volkswirtschaftslehre
• Subtopic: Wirtschaftsbedingungen

This book examines the potential role of European Union law in combating poverty and social exclusion in the European Union.

Anti-poverty strategies have been part of the European Union agenda for decades. Most saliently, over a decade ago, the EU's Member States pledged to lift 20 million people out of poverty. In spite of this commitment, the EU did not even meet a quarter of this target, and over 113 million people still were at risk of poverty and social exclusion by the end of 2020. This book addresses the incongruence between a quite developed EU policy strategy and a well-embedded legal objective on the one hand, and the lack of direct legal action on the other. Analysing the role of social policy instruments, fundamental rights, and the constitutional framework of the European Union, it makes a detailed case for a contribution of EU law to the policy objective of combating poverty and social exclusion.

Drawing on work in law, politics, social policy and economics, this book will interest scholars and policymakers in the areas of EU law, labour and social security, human rights, political science and social and public policy.

The Open Access version of this book, available at www.taylorfrancis.com, has been made available under a Creative Commons Attribution (CC-BY) 4.0 license.

Chapter 1 Introduction

DOI: 10.4324/9781003222125-1

1.1 Setting and background

In 2010, with the adoption of the Europe 2020 Strategy, Member States made the commitment to lift 20 million people out of poverty over the course of ten years. By the end of 2020, figures showed that 113 million people were still living in poverty and social exclusion which ‘only’ represented a decrease of 3.1 million as compared to the reference year in 2008.¹ This means that the strategy did not even live up to a fifth of its expectations. Granted, this was still a considerable reduction from its peak in 2012 when 123 million people were at risk of poverty and social exclusion, as the Europe 2020 Strategy began under the dreadful auspices of the great recession, which was quickly aggravated by harsh and severe austerity measures. And yet, social protection structures should be resilient enough to absorb, at least to a greater extent, the negative impacts of an economic crisis. Enter a global pandemic hand-in-hand with a new economic disaster, the EU commits to another quantifiable poverty target, though this time less ambitious, and with a particular focus on children. The discouraging results of what was once considered a major breakthrough for social Europe, begs the question of whether more, and if so what, can be done at the European level to improve the living standards in the EU and have 2030 actually reach the goals 2020 could not honour. For that, we first need to understand poverty in the context of the EU.

1 Eurostat, ‘Europe 2020 indicators – poverty and social exclusion’ (2020).

Poverty is a reflection of the ability of welfare systems to redistribute resources and opportunities in a fair and equitable manner. Unfair or unequitable redistribution leads to big inequalities between the few in whose hands excessive wealth is concentrated and the many that are pushed to live restricted and marginalised lives. A comparative analysis within the EU shows that the high risk of poverty and social exclusion is primarily a consequence of the way society is structured and how resources are produced and allocated.² In the EU, there are a number of poverty drivers. Firstly, as a consequence of economic recessions, the allocation of resources for the workforce has structurally changed resulting, on the one hand, in the proliferation of non-standard forms of employment that offer less favourable conditions for the worker and, on the other, in an increase of the risk of poverty as a consequence of unemployment.³ There has been an additional growth in the divergence between productivity and wage levels which has led to a downward pressure in wages. Subsequently, work is not a guarantee for a life in dignity, nor is economic growth sufficient to reduce poverty in a significant way, let alone reach preestablished quantifiable objectives. A second force behind the poverty trends in the EU refers to increasing income inequalities with particularly large income gains among the 10% of top earners.⁴ Income inequalities grew in the context of the economic crisis where fiscal packages that were introduced by a number of Member States in times of crisis hit low income groups more than any other.⁵ Income inequalities are closely linked to poverty and social exclusion as literature shows that the more equal a society is, the lower levels of poverty and social exclusion it will experience.⁶ The third and last driver relates to the impairment of welfare states to respond to these risks and inequalities due to their gradual deterioration as a consequence of excessive public expenditure cuts, often geared by supranational economic constraints. By lowering the benefit levels and making the eligibility criteria far more stringent, the situation of vulnerable groups of the society such as women, migrants, people with disabilities and children has considerably deteriorated. The last decade has proven that the urgency of restoring economic growth, while being first and foremost a matter of economic and monetary policy, cannot be done in isolation from the imperative of developing resilient social protection systems.⁷ The role of the EU in this regard, and generally in social affairs, however, has for years been part of a vast and heated debate.

2 Frazer et al., ‘Putting the fight against poverty and social exclusion at the heart of the EU agenda: a contribution to the mid-term review of the Europe 2020 strategy’ (2014) OSE Research Paper, 11–15. 3 Storrie, ‘Non-standard forms of employment: recent trends and future prospects’ (2017) Eurofound. 4 Bonesmo, ‘Income inequality in the European Union’ (2012) OECD Working Paper. 5 Avram et al., ‘The distributional effects of fiscal consolidation in nine EU countries’ (2012) EUROMOD Working Paper; De Agostini et al., ‘The effect of tax-benefit changes on income distribution in EU countries since the beginning of the economic crisis’ (2014) EUROMOD Working Paper. 6 Frazer et al., supra n 2, 11–15. 7 Gomez, ‘The Europeanisation of policy to address poverty under the new economic governance: the contribution of the European Semester’ (2017) JPSJ 25(2), 49–64.

The founding fathers of the European integration process were convinced that economic integration would by itself contribute to social integration and the development of welfare states. This view advocated for leaving social policy matters to the Member States without supranational interference. But history proved them wrong. Not only are national social protection systems unequipped to deal with modern challenges, but the interference of budgetary constraints and internal market pressures have further hindered national social protection systems. The previous economic recession took quite a toll on social rights, not only because of the financial crises itself, but also due to the severe response to it. The implementation of fiscal consolidation measures regardless of due social stabilisers turned what originally was an economic recession into a deep social crisis.⁸ As a consequence, poverty and social exclusion have remained unacceptably high despite the overall wealth of the EU.

8 Vandenbroucke, ‘The case for a European Social Union: from muddling through to a sense of common purpose’ (2014) KU Leuven Euroforum.

Partly to reduce criticism for the lack of involvement of the EU on social issues, the political agenda of the EU has increasingly taken up social issues. Almost two decades ago when the Lisbon Strategy and the Open Method of Coordination for Social Protection and Social Inclusion (Social OMC) were launched, it seemed like a new era of the EU was about to begin in which poverty and social exclusion were finally anchored in the European social policy agenda. Even if this involved a non-binding process of flexible and open cooperation between Member States, the Social OMC was warmly welcomed and it was seen as a key instrument in the fight against poverty and social exclusion. Yet, it achieved little in reducing poverty and social exclusion.⁹ As a matter of fact, poverty and social inequality levels increased, as well as unemployment and precarious employment.¹⁰ Ten years after the Lisbon Strategy launched the Social OMC, the Europe 2020 Strategy introduced new elements to fight poverty and social exclusion, which included the ambitious headline target to lift 20 million people out of poverty by 2020. This initiative was again warmly received and was perceived as a major breakthrough in the social dimension of Europe. In 2021, the Action Plan to implement the European Pillar of Social Rights (EPSR) sets the headline target to lift 15 million people out of poverty, from which five million ought to be children. Notwithstanding the undisputable growing role of social issues on the political agenda of the EU and the arguable socialisation in the European Semester,¹¹ the policy focus essentially remains in promoting participation in the labour market and support income for an increased consumption, rather than combating the social inequalities affecting millions in the EU.¹²

9 Cantillon, ‘The paradox of the social investment state: growth, employment and poverty in the Lisbon era’ (2011) JESP 21(5), 432–449. 10 Peña-Casas, ‘Europe 2020 and the fight against poverty and social exclusion: fooled into marriage?’ in Natali and Vanhercke (eds.), Social Developments in the European Union 2011 (Brussels: OSE and ETUI, 2012), 159–185; Zeitlin, ‘The open method co-ordination and the governance of the Lisbon strategy’ (2008) JCMS 46(2), 436–450. 11 Zeitlin and Vanhercke, ‘Socializing the European semester: EU social and economic policy co-ordination in crisis and beyond’ (2018) JEPP 25(2), 149–174. 12 Copeland and Daly, ‘Poverty and social policy in Europe 2020: ungovernable and ungoverned’ (2014) Policy and Politics 42(3), 351–366; Pochet, ‘What’s wrong with EU2020?’ (2010) ETUI Policy Brief; de la Porte and Heins, ‘A new era of European integration? Governance of labour market and social policy since the sovereign debt crisis’ (2014) Comparative European Politics 13(1), 8–28.

The contribution of EU law to these efforts, however, has remained minimal even if the social competences of the EU have broadened over time. These competences are given to attain the social objective of the Union, which now explicitly includes the combating of social exclusion.

This constitutional landscape has, sin...