As Europe's One Percent Flourishes, Millions Sink into Poverty

On a continent that is home to some of the world’s richest people, most profitable businesses, and most valuable assets—including 342 billionaires—more than 120 million people are at risk of poverty, exemplifying the “unacceptable” levels of inequality sweeping Europe in 2015.

That’s according to Oxfam, whose new report, A Europe for the Few, Not the Many (pdf), warns that the excessive influence of wealthy individuals, corporations, and interest groups on policy-making is exacerbating poverty and inequality across the continent.

“We live on a rich continent where poverty and inequality are on the rise and are the product of political choices, not fate,” said Natalia Alonso, deputy director of advocacy and campaigns for Oxfam in Europe. “To tackle inequality and poverty in Europe, we must reduce the influence the rich and powerful have in shaping government policies in their favor at the expense of the majority of European people.”

Until 2012, for example, just two percent of participants in European Commission expert groups on tax matters represented a public interest, such as trade unions, consumer groups, and civil society organizations. By 2014, this had improved just slightly—82 percent of participants still represented a private or commercial interest.

Meanwhile, between 2009 and 2013, the number of Europeans living without enough money to heat their homes or cope with unforeseen expenses, a state known as “severe material deprivation,” rose by 7.5 million to 50 million people. These are among the 123 million people—almost a quarter of the European Union’s population—at risk of living in poverty. Women are disproportionately represented among those at risk for poverty, and the number of children living in poverty within the EU grew by one million between 2009 and 2013.

It is estimated that the richest one percent of Europeans hold more than a third of the region’s wealth.

“Poverty in the EU is not an issue of scarcity during the crisis, but a problem of how wealth is distributed,” said Isabel Ortiz, director of social protection at the United Nations International Labour Organization (ILO), in her introduction to the Oxfam report.

“As wealth continues to accumulate at the top, the ability of these elites to disproportionately influence the rules further exacerbates inequality,” the report reads. “This vicious cycle of wealth concentration, abuse of power and neglect of citizens has detrimental impacts on economic growth, social stability, and democracy as well as on marginalization and poverty.”

Oxfam also pinpoints austerity measures—such as privatization of public services and spending cuts—and unfair tax structures as “key drivers” of worsening poverty and inequality. For example, since 2008 in Ireland, decreasing incomes and significant unemployment have forced almost a quarter of a million people out of expensive private health insurance schemes. At the same time, Ireland has cut its health care budget by 12 percent.

Indeed, the organization estimates an additional 15–25 million people face the prospect of living in poverty by 2025 if austerity policies continue.

“Yet economic inequality and poverty are not inevitable,” the report authors conclude. “Oxfam’s experience of working in Latin America, sub-Saharan Africa and South-East Asia during previous financial crises has taught us that there are alternatives. There are deliberate policy interventions and political commitments that Europe can take now to break the cycle of poverty, inequality, and political capture that fuels democratic bankruptcy.”

Such measures, according to Oxfam’s recommendations, include:

  • Re-investment in social services like free, universal education and healthcare for all;
  • Promotion of progressive national tax systems across Europe;
  • Steps to “ensure that policy-making processes become less permeable to vested interests and more democratic, through mandatory public lobby registries, stronger rules on conflict of interest and balanced compositions of expert groups.”

“Governments need to rebalance our unfair tax systems so that companies pay their fair share of taxes,” said Oxfam’s Alonso. “Governments must also rethink austerity and reinvest in public services and guarantee decent wages, so that the poorest in our societies do not continue to pay the price of the financial crisis.”

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