EU's fight on poverty a failure so far - Eurostat

Europe 2020

The Europe 2020 strategy, adopted by the European Council in June 2010, aims at establishing a smart, sustainable and inclusive economy with high levels of employment, productivity and social cohesion. The key objectives of the strategy are expressed in the form of targets in five areas: employment, research & development (R&D), climate change & energy, education, and poverty reduction, to be reached by 2020. These have been translated into national targets in order to reflect the situation and possibilities of each member state to contribute to the common goal.

The Europe 2020 targets for the entire union are to:

• reach an employment rate of 75% in the 20-64 age group;
• spend 3% of GDP on R&D;
• reduce greenhouse gas emissions by 20% compared to 1990 levels, while increasing the share of renewable energy to 20% of total consumption and improving energy efficiency by 20%;
• reduce the ratio of early leavers from education to less than 10% and increase tertiary educational attainment to at least 40% of the population aged 30-34,
• reduce the number of people at risk of poverty or social exclusion by at least 20 million.

How has Europe performed?

The Eurostat publication reviews the results of the past five years. The figure below shows the progress made since 2008 in nine areas.

Positive developments in energy, climate change and education

In total, there has been substantial progress in six out of nine areas. Most of the energy-related and climate change targets are already within arm's reach and could be significantly exceeded by 2020. The reduction of greenhouse gas emissions has been a standout success: the original goal was 80% of the 1990 emission levels, but this indicator already reached 77.1% in 2014, which translates to a 13% reduction over six years.

The latest available figures on energy consumption are from 2014, but these are already very close to the 2020 targets, some of which were probably met during 2015. The ratio of renewable energy in household consumption grew from 11% to 16% in six years, which also indicates that reaching 20% by 2020 is feasible.

Education has also performed well union-wide, as the ratio of leavers from education and training in the 18-24 age bracket fell from 14.7% to 11% over seven years and is well within sight of the 10% target. Meanwhile, the ratio of people aged 30-34 with tertiary education grew from 31.1% to 38.7% by the end of 2015 and is only 1.3 percentage points short of the 2020 goal.

Less success in employment and R&D

In contrast, little or no progress has been made since 2008 in two of the nine areas.

In 2008, 1.85% of the EU's GDP was spent on research and development, while six years later, the figure is still barely over 2% and appears unlikely to reach 3% by 2020. The Europe 2020 strategy set a goal of 1.8% for Hungary by 2020, and R&D spending grew from 1% of GDP in 2008 to 1.4% in 2014, which means that if the trend holds, Hungary will have done its share of the task.

As for employment, there has been no progress regarding the whole of the EU, which means that the legacy of the financial crisis is still with us. The employment rate was 70.3% in 2008 and 10.1% in 2015, so the 75% target is further away than it was eight years ago. Hungary has also been lagging behind in this respect, although recent years have brought significant improvements.

Fight on poverty a failure so far

In one area, the situation has not only failed to improve but has actually become substantially worse, and that is the number of people at risk of poverty or social exclusion. In 2008, 116.2 million people in the EU belonged to this group, which the Europe 2020 strategy aimed to reduce to less than 96.2 million. However, the figure grew to 120.9 million and reached 24.1% of total population by 2014. Within that, the number of severely materially deprived people grew from 8.5 million to 8.9 million.

The indicator 'At risk of poverty or social exclusion ' refers to the situation of people either at risk of poverty, or severely materially deprived or living in a household with a very low work intensity. The total number of people at risk of poverty or social exclusion is lower than the sum of the numbers of people in each of the three forms of poverty or social exclusion as persons affected simultaneously by more than one of these situations are only counted once.
Persons at risk of poverty are those living in a household with an equivalized disposable income below the risk-of-poverty threshold, which is set at 60% of the national median equivalized disposable income (after social transfers).
Severely materially deprived persons have living conditions constrained by a lack of resources and experience at least 4 out of the 9 following deprivation items: cannot afford to pay rent/mortgage or utility bills on time, to keep home adequately warm, to face unexpected expenses, to eat meat, fish or a protein equivalent every second day, a one week holiday away from home, a car, a washing machine, a color TV, or a telephone (including mobile phone).
People living in households with very low work intensity are those aged 0-59 who live in households where on average the adults (aged 18-59) worked less than 20% of their total work potential during the past year. (Students are excluded.)

People at risk of poverty or social exclusion, by country, 2008 and 2014 (% of population)

In Hungary, the ratio of people at risk of poverty or social exclusion was fifth highest out of 28 member states in 2014 at 38.1% of the population, up from 28.2% in 2008. Part of this is due to a 200,000 decrease in population over this period, and the trend is somewhat more favorable: the figure kept growing until 2013 but showed a steep decline in 2014 and 2015 and is now 59,000 lower in absolute terms than in 2008.

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