title: Opinion of the Economic and Social Committee on the 'Costs of poverty and social exclusion in Europe'

eurovoc_concepts:
aid to disadvantaged groups
fight against unemployment
marginalisation
poverty
social cost

text: 14. 9. 98 EN Official Journal of the European Communities C 284/25 grammes and industrial cooperation centres should be set up to stimulate the exchange of technological know-how and promote technological agreements (licences, transfer of patents. ), between enterprises. The Committee recommends that the resources of Phare, Tacis and MEDA be mobilized to this end. 9. 2. Notwithstanding the priority given to the appli- cant countries, our other neighbours and the Euro- Mediterranean Area, it is desirable for the European Union to join forces with our main developed partners in promoting the opening up of networks for the promotion, exploitation and provision of information on RTD on the basis of the principles of reciprocity and mutual interest. Schemes could be launched with the developing 9. 3. countries, and more especially our partners under the Lomé Convention, to create favourable conditions for the dissemination of technologies geared to the needs of their economies and particularly SMEs and local craft-based industries. In its opinion on the Green Paper on the future of the Lomé Convention (1), the Committee had proposed horizontal instruments for cooperation and the dissemination of technological innovations under the new European Development Fund. (1) OJ C 296, 29. 9. 1997, p. 65. Brussels, 1 July 1998. The President of the Economic and Social Committee Tom JENKINS Opinion of the Economic and Social Committee on the ‘Costs of poverty and social exclusion in Europe’ (98/C 284/07) On 11 July 1996, the Economic and Social Committee decided to draw up an opinion, in accordance with Rule 23(3) of its Rules of Procedure, on the ‘Costs of poverty and social exclusion in Europe’. The Section for Social, Family, Education and Cultural Affairs, which was responsible for preparing the Committee’s work on the subject, adopted its opinion on 18 June 1998 (the rapporteur was Mr Burnel). At its 356th plenary session held on 1 and 2 July 1998 (meeting of 1 July), the Economic and Social Committee (ESC) adopted the following opinion by 130 votes to six, with 14 abstentions. I. THE ECONOMIC AND SOCIAL COMMITTEE CALLS ATTENTION TO THE SEVERITY OF THE SITUATION — Interim programme to combat poverty (3). — Specific action to combat poverty (4). 1. The ESC has always paid considerable attention to inequality and injustice; it has therefore always been concerned about poverty and its extreme manifestation, namely social exclusion. The following opinions and reports issued by the ESC serve to demonstrate its concern for this issue: — Programme of pilot schemes and studies to combat poverty (1). — Modifications to the programme of pilot studies to combat poverty (2). (2) OJ C 263, 17. 11. 1975. (3) OJ C 180, 28. 7. 1977. — Amendment to the decision on a specific Community action to combat poverty (5). — Information Report on poverty (March 1989) (not published in the Official Journal). — The economic and social integration of the least- privileged groups (6). (4) OJ C 113, 7. 5. 1980. (5) OJ C 25, 28. 1. 1985. (6) OJ C 263, 20. 10. 1986. (7) OJ C 159, 26. 6. 1989. C 284/26 EN Official Journal of the European Communities 14. 9. 98 — Own-initiative Opinion on poverty(1). — Alternate resources and social assistance in the social protection systems (2). — Own-initiative Opinion on social exclusion (3). — Action programme to combat exclusion and promote the economic integration of the least-privileged groups (4). The Committee’s vigilance is not reflected solely in 2. its documents on specific issues. Some of the Committee’s opinions deal indirectly with the causes and conse- quences of poverty. Attention is drawn in this respect to the opinions on the economic and social situation, unemployment, young people, the elderly, training, information, social cohesion and integration; and the opinions dealing with groups and individuals who are liable to be victims of the ‘accidents of life’ and history. 3. Particular mention should be made of the cam- paigns undertaken by the ESC to enhance civil rights; these campaigns were predicated on the vital need to recognize everyone’s political, social, economic, cultural, individual and family rights and responsibilities. 4. The Member States are taking measures — geared to their respective situations, resources and political approaches — to stifle poverty and tackle its effects. 5. The EU is also playing an active role, by means of both general programmes and specific action, such as measures to combat long-term unemployment, promote training and reintegration in society and develop ailing areas and sectors of activity. 6. Public institutions and private bodies and move- ments dedicated to combating poverty are full of enthusiasm for their task. 7. Associations — which often have to make do with inadequate and insecure resources — are stepping up their work at the ‘sharp end’ of the problem. The churches and the bodies which stand up for human rights are drawing attention to the principles of freedom, justice and solidarity, whilst, at the same time, taking concrete action. POVERTY IS, HOWEVER, CONTINUING TO 8. SPREAD AND WORSEN. The ESC thus raises its voice loudly and forcefully in support of all those who are sickened by poverty and calls attention to the severity of the situation. (1) OJ C 221, 28. 8. 1989. (2) OJ C 14, 20. 1. 1992. (3) OJ C 352, 30. 12. 1993. (4) OJ C 52, 19. 2. 1994. II. AN APPRAISAL FOCUSING ON THE COST OF POVERTY AND SOCIAL EXCLUSION 1. The approach which the Committee has chosen to adopt presents it with a difficult task given the diverse situations and the shortage of information. 2. There are two ways in which the term ‘costs of poverty and social exclusion’ can be understood: the costs to the victims, and the costs to those engaged in combating poverty and social exclusion. 3. Poverty and social exclusion exact a toll on their victims by lowering their quality of life. It should not be completely impossible to measure this loss of quality of life. The legal concept of pain and suffering can be calculated as a monetary value and compensation may be paid. This loss of quality of life also brings about a sharp reduction in the extent to which the everyday needs of households can be met. 4. The shortfall in consumption does not penalize only the poor. It penalizes the economy as a whole: business turnover suffers, workers lose out because fewer new workers are taken on, and the state and the social security systems suffer as a result of the decline in (a) tax revenue linked to the level of income and consumption; and (b) social contributions geared to the level of business activity. Consumers with low purchasing power turn to cheaper products, which frequently means products imported into the EU. The cost of poverty and social exclusion also 5. includes the cost of public and private help provided by society to the victims of these phenomena: preventive measures, social back-up measures, various benefits in cash and in kind, etc. 6. The question of what the term the ‘high cost of the measures to combat poverty’ means to a Member State or Community should be addressed. Are such costs brought about by the existence of a large number of poor people? Are they the result of a vigorous policy and strong action to prevent poverty and to tackle poverty? 7. It is not just the public authorities which are working to combat poverty. By educating their children, with a view to promoting their interests, parents invest part of their time and resources for the good of the country and society. By carrying out their family responsibilities, parents help to educate children and young people and thus help to ensure that they have a stake in society. This parental contribution is one of the reasons why family policies need to be expanded. 14. 9. 98 EN Official Journal of the European Communities C 284/27 8. Associations and movements specifically dedicated to the prevention and treatment of poverty play a very important role by showing solidarity and demonstrating a close concern for real issues. These associations largely rely on unpaid volunteers; the work of such volunteers represents one of the ways in which solidarity is expressed in practice. The work of these associations is funded from grants, charitable appeals and members’ contributions. There is no clash between the predominant role played by social workers and professional teachers and the role played by voluntary workers. One of the key ways in which social reintegrations can be achieved is by teaching — or re-teaching — the potential or actual victims of social exclusion to ‘stand on their own two feet’; this task requires personal attention and patience on the part of support workers and thus places a high demand on the availability of individuals. Bearing in mind the whole range of consequences of poverty and social exclusion and the very severe risks which they pose to individuals and society, everyone must realize that they have to take action, at their respective levels and in the light of their respective skills and resources. statistical definition and analysis of social exclusion; and the quality of assessments and reports. The goal pursued here by Eurostat is to set up a procedure for providing regular briefings on social exclusion and poverty addressed to the EU Member States. The first report should be published at the end of 1999. These are very important decisions. 2. 3. Most of the statistical data referred to in this opinion is taken from a survey carried out by Eurostat in 1993. 2. 3. 1. States; Austria, Finland and Sweden joined in 1995. At that time the EU comprised 12 Member It is quite likely that changes have since taken 2. 3. 2. place regarding the level of poverty in one or other of the states covered by the 1993 survey. Such changes will not however detract from the importance of the data set out below. III. SOURCES USED IV. BEFORE ADDRESSING THE QUESTION OF THE COST OF POVERTY WE NEED TO BE AWARE OF THE ACTUAL SITUATION This opinion draws mainly on four sources of 1. information: inter alia, by providing answers to the four questions set out below: — the work carried out by Eurostat and national statistical institutes and bodies; 1. How can poverty be defined and measured? — opinion polls; 2. How can social exclusion be defined? — conceptual observations and some national data compiled with the assistance of members of the ESC study group; — information based on the experience of bodies which help to combat poverty and social exclusion. 3. What is the actual number of poor people in the EU? 4. Why are people poor and how do they become poor? 2. Three observations immediately spring to mind: 1. Definition and statistical measurement of poverty 2. 1. There is a considerable shortage of data relating to the costs of poverty as described above; such data is also not necessarily available in the same form in the various Member States. 1. 1. If they are to be meaningful, the various phenom- ena associated with poverty have to be measured using the yardstick of ‘households’ (1). It is thus assumed that all the members of a household share the same standard of living. 2. 2. Eurostat and the national statistical institutes have a very important role to play in providing strategic back-up to political decisions and in helping to assess follow-up action. Whilst regretting, therefore, that Eurostat did not have sufficient resources to enable it to meet its requests, the Committee notes with keen interest that steps were taken on 15 April 1998 to set up a task force to examine the question of statistics in respect of social exclusion and poverty. Recommendations are to be put forward in the autumn of 1998 in respect of: the adoption of comparable concepts and definitions in respect of income; an analysis of financial poverty; a Statistical ‘households’ should not be confused with ‘families’, which comprise a couple or a single adult, together with their children. A family may well be divided between several statistical households. A statistical household, on the other hand, may include persons not related in any way. (1) The international statistical definition of a ‘household’ is: ‘a single person or group of persons usually living in the same accommodation’. C 284/28 EN Official Journal of the European Communities 14. 9. 98 1. 2. The EC Commission has drawn up a statistical definition of poverty. This definition is based on average expenditure per unit of consumption or equivalent adult. (1) Households are classified as ‘poor’ if their income falls below 50 % of this average figure; this represents the ‘poverty line’. In view of all the consequences which poverty 1. 3. has on the lives of its victims this phenomena has to be measured as close as possible to the areas in which people live. The table below thus sets out the poverty lines set by each of the individual EU Member States; the figures are given in the respective national currencies and are based on total recorded income in the respective Member States: 1. 5. The richer the overall number of inhabitants of a country is, the higher the poverty threshold. To quote an example, when a Luxembourg household slips below the national poverty threshold it has a purchasing power which is three times higher than that of a Greek of Portuguese household slipping below the poverty threshold in their respective countries. 1. 6. There are variations within one and the same Member State, in addition to the significant differences in standard of living between Member States. To quote an example, the same level of income will not ensure the same standard of living in different regions, the centre of large cities, various urban areas, suburbs or villages. State Poverty thresholds calculated on the basis of average income, expressed in national currencies Comparison of poverty thresholds (and average standards of living) expressed as an index. Weighted average of the thresholds of the 12 EU states = 100 Luxembourg Germany United Kingdom Belgium Denmark Netherlands France Italy Ireland Spain Greece Portugal 38 750 LFR 1 248 DM 378 £UK 22 930 BFR 5 328 DKR 1 175 HFL 3 716 FF 667 600 LIT 294 £IRL 48 090 PTA 67 990 DRA 42 580 ESC 202 115 111 110 108 106 106 84 82 77 66 64 1. 4. The standard of living in the various EU Member States varies considerably. With a view to comparing poverty lines, the sums involved in the various national currencies have been converted into a single currency using exchange rates which take account of differences in general price levels between the various states; the differences in levels of income in respect of the twelve poverty lines thus reflect the differences in the purchasing power of the households concerned. The use of these exchange rates ensures ‘parity of purchasing power’. (1) Under the ‘Oxford scale’ for assessing units of consump- tion: the first person, generally an adult, counts as one unit of consumption; subsequent persons aged 14 or over count as 0,7 of a unit; each person aged under 14 counts as 0,5 of a unit. Under the scale used by Eurostat and a number of national institutes: the first person is counted as under the Oxford scale; persons aged 14 or over count as 0,5 of a unit; persons under 14 count as 0,3 of a unit. By way of example, if we take a household comprising two parents, a child aged 15 and two children aged 10 and 7, the number of units of consumption are as follows: — Oxford scale: 3,4 units — Other scale: 2,6 units. 2. Definition of ‘social exclusion’ 2. 1. The Committee has already set out its views on social exclusion in an own-initiative opinion drafted by Miss Maddocks. This opinion was adopted unanimously on 30 September 1993 (2). 2. 2. Poor households display different levels of pov- erty; this is of course the result of different levels of income but is also sometimes brought about by other factors, such as: the psychological state of the persons concerned, the quality of their family relationships, their general situation as regards relationships and social life, the rules governing access to social measures and social support, and whether or not they can turn to associations for help. It is not necessarily possible to place a financial value on all of these factors but they have a considerable impact on the way in which poverty starts and develops. 2. 3. The term ‘severe poverty’ has thus been intro- duced to describe the situation of individuals and families who have reached the verge of marginalization or have already crossed the dividing line. All victims of marginalization run the risk of sinking into social exclusion, sooner or later, if appropriate measures are not taken as soon as possible to ease their plight. ‘Complete’ social exclusion is the final culmi- 2. 4. nation of a series of specific exclusions from basic rights. The rights in question here include: the right to receive training; the right to have a job; the right to decent accommodation; the right to live as a couple and lead a responsible family life; the right to have access to social protection and care services; and the right to enjoy a reasonable standard of living. Victims of social exclusion — be they individuals or families -Generally speaking, people descend into a state of social exclusion quite quickly i. e. they cease to be regarded by society as persons who enjoy those rights and characteristics which are fundamental to human dignity, as expressed by social, economic and cultural integration and civic recognition. Victims of social exclusion are no longer able legitimately to exercise their basic rights in the normal way. They are effectively without rights and without a voice. (2) See OJ C 353, 30. 12. 1993. 14. 9. 98 EN Official Journal of the European Communities C 284/29 2. 5. Not every victim of poverty is, however, bound to suffer marginalization or social exclusion. In the same way, whilst victims of poverty and social exclusion may take to crime and violence, it is not by any means all such victims who are involved in such extreme action. What is true, however, is that poverty, and social exclusion may give rise to legal measures, educational schemes and programmes to check these phenomena which are costly to society; there is also a need to highlight the cost of acts of violence to victims, perpetrators and their respective families. Children cannot be held responsible for the acts of their parents; they should also not suffer as a result of those acts. 2. 6. In the same way, all victims of social exclusion cannot be classified as ‘poor’. Some forms of social exclusion derive mainly from causes which are of a physical, psychological, social, ethnic, cultural, religious, political, etc. nature and other forms of social exclusion are linked to handicaps; such situations are not necess- arily accompanied by financial deprivation (though this is frequently the case). 2. 7. Whilst it has been possible mathematically to establish the threshold for poverty, it is, however, more difficult to establish the dividing line between ‘first degree poverty’, if one dares use the term, and social exclusion. Only the most extreme form of social exclusion, namely homelessness, can be readily iden- tified. It is, however, clear that if adequate or timely action is not taken to combat poverty, there is a risk that it may lead — sooner or later — to marginalization and social exclusion. 2. 8. The victims of marginalization and social exclusion are not properly covered by statistics. Most of the persons concerned do not enjoy conventional living conditions. A large proportion of them live in: hostels, social readjustment centres, temporary shelters, bed and breakfast accommodation, shantytowns, cara- vans, or, worst of all, they have no fixed address, sleeping in the open, in railway stations or under bridges. The final stage in the process of social exclusion 2. 9. is moral collapse which may lead people to suicide, which represents the final cry for help which goes unanswered. Suicide is one of the major causes of death and it is on the increase, particularly amongst young people, the very lonely and the elderly. 3. How many poor households and individuals are there in the EU? Eurostat has calculated the poverty thresholds 3. 1. for the various Member States, based on half the average income per unit of consumption; as was pointed out above, these units of consumption were established using a different scale to the traditional Oxford scale (1). (1) Under the ‘Oxford scale’ for assessing units of consump- tion: the first person, generally an adult, counts as one unit of consumption; subsequent persons aged 14 or over count as 0,7 of a unit; each person aged under 14 counts as 0,5 of a unit. Under the scale used by Eurostat and a number of national institutes: the first person is counted as under the Oxford scale; persons aged 14 or over count as 0,5 of a unit; persons under 14 count as 0,3 of a unit. By way of example, if we take a household comprising two parents, a child aged 15 and two children aged 10 and 7, the number of units of consumption are as follows: — Oxford scale: 3,4 units — Other scale: 2,6 units. 3. 1. 1. The reason why the yardstick of half the average income was chosen was in order to maintain continuity with the estimates of the level of poverty made earlier by the Commission. As will be demonstrated at a later stage, the use of this yardstick provides a much higher proportion of poor people than if the yardstick of half the median income were used to determine the poverty threshold. 3. 1. 2. Reference to income rather than expenditure leads to a sharp increase in the number of poor households. The use of a different method of establishing units of consumption produces only a very slight change in the percentage of poor households in the overall population; it does, however, slightly reduce the pro- portion of poor households in the category of large families while increasing the proportion amongst house- holds comprising just one person. 3. 1. 3. In the table below the figures in the left hand column indicate the percentage of poor households, calculated in accordance with the criteria described above (2), in each of the 12 Member States which made up the EU in 1993. State percentage of poor households — reference criterion: half of average income percentage of poor households — reference criterion: half of median income Belgium Denmark Germany Greece Spain France Ireland Italy Luxembourg Netherlands Portugal United Kingdom 13 9 13 24 19 16 21 18 14 14 29 23 EU-12 17,3 9 5 10 18 11,5 11 6 13 7 10 19 14 12 3. 1. 4. As was the case with all the other tables the purpose of these statistics is of course not to set out a ‘league table’ in respect of the various Member States; this would be insulting to poor people, the Member States and their governments which are having to tackle difficult situations using the measures which they deem appropriate. It is interesting to compare the above figures 3. 1. 5. with the figures for the percentage of poor households in each of the 12 Member States listed above established on the basis of half the median level of income rather (2) See point 3. 1. 1. C 284/30 EN Official Journal of the European Communities 14. 9. 98 than the average level of income. These figures have been calculated by the French Institute for Statistics and Economic Studies and are set out in the right hand column of the table. poor households when the reference basis used is the median level of income (or standard of living) in the EU, rather than the median living standard in the respective states themselves. 3. 1. 6. When there is a considerable discrepancy between the two sets of percentages this implies that the state concerned has a particularly large percentage of persons having very high income levels (this results in a significant difference between the figure represented by half the average income and that represented by half the median income). Irrespective of whether the calculations were 3. 1. 7. made on the basis of half the average income or half the median income, the figures for the percentage of poor people in the respective Member States have so far always been established on the basis of the standard of the individual state living (average or median) of concerned. As the standard of living varies from one Member State to another, a household regarded as poor in one Member State would, if it retained its standard of living, not be regarded as poor in another Member State. In the light of this observation there is a need to determine the percentage of poor people in each Member State of the EU measured on the basis of half the average or median income in the EU, i. e. regarding the EU as a single economic entity. These figures are set out in the right hand column of the table below. The reference criterion used was half the median level of income in the EU-12 in 1993; this figure was determined on the basis of recorded levels of income in each of the Member States, expressed in a single currency using exchange rates which ensured ‘parity of purchasing power’. Percentage of poor households State calculated by reference to half the median income in the respective state (%) calculated by reference to half the median income in EU-12 (%)(*) Belgium Denmark Germany Greece Spain France Ireland Italy Luxembourg Netherlands Portugal United Kingdom Average of EU-12 9 5 10 18 11,5 11 6 13 7 10 19 14 12 7 5 7 36 25 10 25 19 1 9 44 13 13,7 (*) These figures were calculated by the French National Institute for Statistics and Economic Studies (INSEE) using data from the 1993 Eurostat survey. 3. 1. 8. The states having a standard of living — and consequently also a poverty threshold — below the median level for the EU have a higher percentage of 3. 1. 9. On the basis of the 1993 survey, the total number of poor people in the EU-12 was 57 million, using the reference criterion of half of average income, and 38,7 million, using the yardstick of half of median income. Austria, Finland and Sweden, joined the EU two years after the 1993 survey had been drawn up. On the basis of careful extrapolation and in the light of information obtained from various sources, it may be conjectured that the total number of poor people in the EU-15 could be approximately 59 million or 39,5 million, depending on the reference criterion used. This would mean that one person in six, or one person in nine, was poor. After having made an appraisal of poverty in the 3. 2. EU it would be helpful to briefly examine the facts which are known about the gravity of the situation in the world as a whole. People in many countries are striving for 3. 2. 1. development. These nations look towards the European Union with a mixture of envy and hope, sometimes backed up by a more or less objective understanding of the situation in European countries. We must not disappoint the legitimate expectations of these peoples since to do so would be to contravene the principles set out in the Universal Declaration of Human Rights. Article 1 of the declaration states that ‘all human beings are born free and equal. and should act towards one another in a spirit of brotherhood’. 3. 2. 2. In 1994 4,3 billion people — three quarters of the world’s population lived in the Third World. According to the figures for 1992, 57 countries — with a total population of 3,7 billion — had an annual per capita GNP of less than $ 675. Over a billion human beings have to live on less than $ 1 a day. Even bearing in mind the impact — which is difficult to assess — of the ‘informal’ economies, the discrepancy in wealth between the EU and the Third World is of the order of 25:1. The reason for drawing attention to this harsh 3. 2. 3. reality is not to try to convince poor people in the EU that it would be very wrong of them to complain, since other continents have billions of people who are much poorer than they are. The aim is rather to highlight a dual responsibility: — a responsibility towards our fellow citizens who are living in poverty and misery; — a responsibility towards people living in countries which remain underdeveloped and with which some Member States have historic ties; people in these countries want to see an improvement in their living conditions, or in the case of many such people, they simply want to avoid dying of hunger. Indifference or even the use of force, are not the weapons 14. 9. 98 EN Official Journal of the European Communities C 284/31 which should normally be used to combat poverty; ritualistic statements of pity for the victims of poverty are equally inappropriate; — retired persons who are former unskilled manual workers or non-manual workers aged over 75 and the widows of these retired persons; — these observations underline the importance of the North-South dialogue and the urgent need for humanitarian reasons and on grounds of maintaining geo-political balance, for talks on world economic issues and trade to cover also the wretched situation of people living in severe poverty. 4. Why are people poor or why do they become poor? 4. 1. The direct causes of poverty are all aggravated by situations which considerably, and in a lasting way, restrict the prosperity of households to the point where the exercise of household rights, the fulfilment of household responsibilities and the quality of the life of the household are seriously jeopardized. 4. 1. 2. On the basis of the statistics provided by Eurostat, four main factors in the development of poverty may be identified. The first two factors are unemployment and lack of vocational qualifications. These two factors are frequently interlinked. People who lack vocational qualifications find it difficult to secure stable employment and even those with jobs command only inadequate wage levels. The other two factors are large families (four or more children) and age (persons aged over 75). The latter factor is to a large extent generation-related: the oldest people do not always have levels of pension equivalent to those secured by later generations. 4. 1. 3. By combining a number of criteria (socio- economic categories, the skill level of the ‘head of household’, the length of time people have been unem- ployed, family sizes and age) it is possible to identify types of households among which there is a strong probability of finding a high proportion of poor people. The characteristics of such households are as follows: — households (couples with or without children and single-parent families) in which all the adult members are unemployed; — persons who have been unemployed for long periods (over a year and, in particular, over two years) and who are aged over 25, irrespective of their level of skills; — unemployed persons — particularly people who have been unemployed for long periods — who are aged under 25, and who do not live with their families; — workers who have jobs but receive low rates of pay because they are poorly qualified, are obliged to work part-time or work intermittently; — households comprising only one wage-earner, who is an unskilled manual worker or non-manual worker; — farmers engaged in mixed farming or livestock farm- ing whose holdings are of such a type (small size, poor yields, producing unprofitable products) that they provide only a low level of income, in cases where such households do not have additional sources of income, such as those obtained by wage-earners; — families having four or more children, in cases where the head of household is a manual worker or a non-manual worker — irrespective of whether the person is employed or unemployed — having a spouse who is not in gainful employment or who is unemployed; — single-parent families in which the head of household — most frequently a woman — is unskilled. 4. 1. 4. Amongst the causes of poverty, unemployment has a particularly strong impact even though it is invariably not the main cause of poverty. All unemployed there are an persons are not, however, poor but increasing number of poor people amongst persons working in semi-skilled or unskilled jobs who conse- quently are on low incomes and whose jobs are frequently insecure. 4. 2. Poverty may also have a number of causes which are more indirect than those mentioned above. Examples of such causes are inadequate or inappropriate training which makes it difficult to find and hold down jobs, particularly at times of recession or rapid technological change. Further examples of such causes are poor health and the inadequate or non-existent care; these situations may give rise to job instability or may even make it necessary for people to give up work altogether. 4. 3. The influence of living conditions should be highlighted. Insecure living conditions are frequently brought about by poverty but these conditions them- selves may also trigger poverty or represent a factor which accelerates a slide into poverty, marginality or social exclusion. Accommodation has a considerable influence 4. 3. 1. on the quality of life, the happiness of couples, the bringing up of children. Those who are homeless have no foothold in society, it is rarely possible for them to find stable employment. Accommodation is a factor in determining social esteem. People who are homeless may sometimes lose all their civic entitlements and even their civic rights. Some states have, however, taken steps to enable homeless people to vote. Housing conditions vary according to location. The location of housing has a bearing on most items of household expenditure: transport, educational expendi- ture, shopping conditions, and hence the cost of shop- ping; it also sometimes influences social relationships. 4. 3. 2. Owning one’s own accommodation is tanta- mount to having an additional source of income. With a view to measuring actual standards of living more effectively, many countries, therefore, add to the income or expenditure of home-owning households a notional income designed to give a monetary value to this advantage. The poverty threshold is thus raised to a higher level than would otherwise be the case and this results in a slight increase in the proportion of poor households. C 284/32 EN Official Journal of the European Communities 14. 9. 98 4. 3. 3. A number of households are in the process of buying their homes. They have to repay mortgages and make interest payments — some of which are excessively high — and this factor may have a negative impact on their quality of life. An excessive level of debt may trigger the slide into poverty or considerably worsen the situation. Objective information and help with decision-making before committing oneself to the pur- chase of property is thus a necessity, as is a policy on the provision of high-grade rented social housing. 4. 3. 4. On 18 March 1997 the European Parliament’s Committee on Employment and Social Affairs adopted a draft resolution in which it pointed out that there were no less than 18 million people in the EU who could be regarded as homeless or who were reduced to living in housing which lacked adequate facilities or was overcrowded. The draft resolution went on to state that housing had to be regarded as the cornerstone which underpinned all the other basic social rights (1). The ESC shares the Parliament’s appraisal and its conclusion. 4. 4. Following the above objective appraisals of poverty, consideration should now be given to the lessons to be learned from opinion polls, i. e. what they tell us about how poverty is viewed. 4. 4. 1. Opinion polls conducted amongst households with a view to securing a subjective assessment of poverty, based on the appraisals by households of their own levels of prosperity, yield results which are sometimes different from analyses based on essentially objective data, such as household expenditure. The sharpest contrasts occur when the target groups are retired persons and large families. 4. 4. 2. Retired persons tend to consider themselves to be poorer than their standard of living would indicate. In the case of some retired persons this may be put down to the following factors: fear for the future; lack of occupation; isolation; failure to take account of the value of services that they sometimes receive either free of charge or at a reduced cost. 4. 4. 3. Members of large families are frequently more content with their lot and their relatively low standard of living than are people living alone and even childless couples having much higher standards of living. The reason for this is because of their children, large families have a very high degree of resilience to poverty (2); it should also be noted that in the case of the poorest large families the children frequently represent the family’s only hope. 4. 4. 4. Opinion polls also confirm the overriding importance of having a job, as a factor in determining whether or not people are optimistic and feel part of society. Households which, on the basis of mathematical criteria, may be classified as ‘poor’ declare themselves not to be poor if at least one person in the household has a stable job providing gainful employment; on the other hand, households which, on the basis of mathematical criteria, cannot be defined as ‘poor’ declare themselves to be poor if no member of the household is in gainful employment. 4. 4. 5. Self-assessed levels of poverty are therefore influenced by considerations other than standard of living. The fact that people are employed, elderly or lonely brings home to them their vulnerability and triggers distressing questions relating to their value to society and what fate has in store for them. V. HOW CAN WE MEASURE THE COSTS OF POVERTY AND SOCIAL EXCLUSION? 1. Preliminary observations 1. 1. If we are to calculate the costs of poverty and social exclusion we must first of all agree on what is meant by these words and be able to describe the persons and numbers of persons concerned. In the above paragraphs an attempt has been made to carry out an appraisal and provide some broad figures. 1. 2. In order to proceed to the following stage there is a need to (a) determine the cost of tackling situations of poverty and social exclusion and implementing prevention measures and (b) measure the impact on production, employment, fiscal revenue and social secu- rity contributions of the reduction in the level of consumption attributable to poor people and victims of social exclusion. 1. 3. This is a complex and difficult task. By way of an example, although it is recognized that unemployment plays a role in the development of poverty, the total cost of unemployment cannot be included in the cost of poverty. In the same way, it cannot be assumed that all family benefits help to prevent poverty. A further question which needs to be answered is whether poor families receive assistance because of their family status or because they are poor. Quite apart from consider- ations of accountancy, the answer to this question is important from the point of view of defining the nature of family benefits (do they represent compensation or assistance?) and from the point of view of specifying where necessary, which families are entitled to receive benefit. It should be noted that in the case of very poor families and individuals, welfare payments frequently represent their only resources on which they can rely, if not their only source of income. (1) PE 219. 267/fin Part A — rapporteur: Mr Brian Crowley, MEP. (2) Large families frequently receive assistance from associ- ations which stress the need to learn how to acquire or regain dignity in all its forms: parental dignity, social dignity and civic dignity. 1. 4. On a more general note, whilst it may seem possible to quantify the cost of some measures explicitly designed to tackle the consequences of poverty (specific benefits and services), it is more difficult to pinpoint, within overall budgets, the costs of specific poverty- 14. 9. 98 EN Official Journal of the European Communities C 284/33 prevention measures in fields such as education, training, information, accommodation and health. All policies are implicitly preventive. Education involves measures to combat illiteracy and medical care improves the state of public health by treating individual patients, and vice-versa. these costs: (a) by estimating the costs of the production which would be achieved by partially or wholly unem- ployed poor people if they were provided with work; (b) by estimating the level of overall demand if the unfulfilled needs of poor people were met. 1. 5. On the basis of partial data acquired from various sources one fact is already clear: poverty and social exclusion exact a heavy economic cost and this cost is tending to increase. As has already been noted, Eurostat is at the present time unable to provide full information, established on a harmonized basis, on the costs of poverty and social exclusion. The ESC does not, by itself, have the means to draw up an exhaustive table setting out the costs of poverty and social exclusion. With a view to carrying the appraisal a stage further, however, the Committee has set out below an outline method for calculating these costs, together with exam- ples. The ESC does not seek, though, to prescribe a particular course of action. Flexible implementation of this method by members of the study group set up by the Committee’s Section for Social Affairs — some of whom have already compiled information on the subject — should help to enable further progress to be made at a later stage. 2. The Committee’s contribution towards the estab- lishment of an outline method of calculating costs The costs of poverty include (a) real expenditure 2. 1. and (b) a shortfall in revenue or loss of income. The cost can be calculated under the following four headings: (a) aid — in cash or in kind — provided by 2. 1. 1. states, regional authorities and social or public health bodies to the victims of poverty in order to enable them to bring some improvement, however slight, to their situation and (b) the collective costs assumed by society in respect of: finding jobs for victims of poverty; bringing about their reintegration into society; and in making good the damage sometimes caused by people suffering from poverty; 2. 1. 2. poverty or social exclusion; the cost of carrying out policies for preventing the losses incurred by the public purse as a 2. 1. 3. result of the shortfall in taxes and social security contributions brought about by under-employment and the reduced levels of income and consumption of poor households and, of course, the victims of social exclusion; 2. 1. 4. the ‘cost’ to the productive apparatus of the loss of production caused by under-employment and the low level of purchasing power of poor people; there are two ways in which attempts can be made to calculate 2. 2. It should by now be possible to calculate, in every Member State, the costs listed under the first heading. The costs could be calculated on the basis of: 2. 2. 1. a list of the social benefits which are, as a general rule, paid only to disadvantaged groups (minimum living wages and a number of paid benefits, subject to means-testing) and a list of the benefits — generally paid to a broader group of beneficiaries — where part of these benefits is paid to poor households and poor individuals, even though it is difficult to assess the percentage involved; 2. 2. 2. surveys, involving a sample of households who are asked to compile, with the assistance of a member of the survey team, a list of their income (both income from work and income from transfer payments). Using this method it is possible to identify poor households — according, for example, to the definition used by the Commission — and to calculate their incomes from various welfare payments. 2. 3. If we opt to calculate the costs of the benefits normally earmarked for poor people or which may be paid to them, the following payments could be included: — unemployment allowances, known as ‘solidarity’ payments, paid to the long-term unemployed; these allowances should be distinguished from ‘unemploy- ment insurance payments’; — retraining allowances and job-seekers allowances paid to the long-term unemployed, in particular young people and elderly workers; — minimum subsistence payments (such as income support) paid to persons without income or savings; — welfare payments paid to children from deprived backgrounds, young people who are in difficulty and low-income handicapped persons; — means-tested family benefits paid to families having at least three children; payments made to lone parents; payments made to low-income families; — minimum subsistence payments made to old people, welfare payments or home-helps for old people who have no income or savings; — medical grants paid to low-income sick people, invalids, handicapped persons and, more generally, people who do not benefit from social protection or have only a very inadequate level of protection; — means-tested housing benefits paid to persons whose level of income is such that it does not enable them or their families to live in decent housing conditions; the provision of accommodation for deprived the provision of persons or homeless persons; C 284/34 EN Official Journal of the European Communities 14. 9. 98 shelters for young people in difficulty; the provision of shelters and hospices for elderly people who have no income or savings; — additional schooling for children from deprived areas or backgrounds; literacy courses; rehabilitation programmes for young people who are in difficulty; — price reductions or free access to certain services provided by the community: transport, meals, heating, information, recreation, cultural services, etc. ; — the payment of social workers caring for: poor people in all age groups; young people experiencing difficulties; the long-term unemployed; etc. ; invest- ments and the operating costs in respect of the departments employing these social workers; — operating costs for measures to prevent and curb certain crimes, the causes of which can be attributed to poverty; these measures include treatment for alcoholism and drug addiction linked to poverty. These benefits go under different names in the 2. 3. 1. various Member States. The above reference list is not absolutely exhaustive but it nevertheless covers a broad area. Our goal is to ascertain, through reference to the accounts of the bodies responsible for distributing benefits, the overall cost of each of the benefits con- cerned; in cases where the benefits are also paid to people not strictly classified as ‘poor’, an estimate should be made of the proportion of the benefits which actually do go to poor people. 2. 3. 2. One of the weaknesses of this method lies in the fact that aid is often directed towards individuals rather than households; the situation may thus arise that a person in receipt of a given benefit may in fact be living in a household which is not poor. It is therefore possible that the overall cost of the benefits listed above will, when taken at face value, exceed the total value of the benefits paid to the victims of poverty, in the strict sense of the word. 2. 3. 3. A questionnaire covering, to all intents and purposes, all of the abovementioned costs has been forwarded to members of the ESC study group, with the request that they endeavour to obtain the information concerned from the competent bodies in their respective countries. Replies have been received in respect of Austria, Belgium, Spain, France, Germany, Greece, Italy and the UK. Information, sometimes very comprehen- sive, has been provided concerning the number and the characteristics of employed persons and, in a number of cases, the allowances they receive and the various other social protection measures. In most cases, however, it turned out to be almost impossible to identify the proportion of the allowances and benefits concerned paid exclusively to poor people. If reliable figures are to be obtained in this respect, long, painstaking, specific research would be necessary involving a large number of institutions and requiring a considerable amount of coordination in each of the respective countries. 2. 3. 4. Very few attempts have been made to provide a general view of the situation. Attention is drawn, however, by way of example, to the work carried out by Dr Rudolf Martens in Germany. Dr Martens who estimated that in 1994 the cost to the public purse of providing allowances for the long-term unemployed, social assistance, and various forms of care and therapy amounted to approximately DM 70 billion (or some ECU 37 billion). A further general indication is provided by the fact that at the beginning of 1997 the French Ministry for Social Affairs announced that it would be earmarking FF 126 billion (ECU 19,5 billion) for measures to combat poverty and social exclusion in the course of that year. figure was boosted by expenditure by local That authorities which was of the order of FF 40 billion (ECU 6 billion). An alternative basis on which to assess the costs 2. 4. of measures to combat poverty is to carry out surveys of household sources of income. In 1993 Eurostat carried out a survey based on a panel of EU households; the information which this survey provided on the number of poor people has been used in of this opinion. The French Ministry for Social Affairs has endeavoured to utilize the data in this survey relating to the income of poor households in France; the findings are set out below, solely by way of an example. 2. 4. 1. Surveys of households tend to have a number of weaknesses, such as the risk of under-assessing income in the case of rich households (or households described as ‘not poor’) and poor households. Poor households may, despite the diligence of survey workers in helping them to provide objective answers, be tempted to keep quiet about the existence of certain sources of income for fear of losing that income, particularly in the case of means-tested benefits. This stance is based more on fear than a desire to defraud. A further source of under-assessment — for which this time the households taking part in the survey cannot be held responsible — is linked to the deliberate disregard by the survey of healthcare ‘in kind’. Another area not taken into account is the costs resulting not from the payment of welfare benefits to households themselves but rather from, for example, the salaries paid to social workers and teachers or costs linked to the provision of free, or reduced cost, access to certain services provided by the community (e. g. transport and meals). 2. 4. 2. An additional drawback of direct surveys of ‘ordinary’ households is the imperfect picture which they provide of the situation of those who are at the ‘bottom of the heap’. In the case of the survey under review, the persons carrying out the survey found it very difficult to question people belonging to the social groups hardest hit by poverty who are not only poor but also victims of social exclusion (1). For this reason, in connection with its report on poverty which was to (1) The survey did not cover, for example, poor people resident in hospitals or public or private ‘institutions’ in general. 14. 9. 98 EN Official Journal of the European Communities C 284/35 be presented by Mrs Geneviève de Gaulle, the French Economic and Social Council was obliged to commission the Centre for Research and Documentation on Living Conditions (CREDOC), to carry out a special survey of a sample of persons living at the ‘sharp end’ of poverty. In the analysis of the data in the Eurostat 2. 4. 3. survey, the poverty threshold was set at half the median household income per unit of consumption. On the basis of this criterion 11 % of French households were considered to be poor in 1993, as against 16 % on the basis of a poverty threshold set at half the average income. The reference basis for calculating units of consumption was the Eurostat scale. The use of this scale gives a slightly increased figure for the percentage of poor households in France as against the figure obtained using the Oxford scale (10 % instead of 9,6 %) but the figure for the number of poor individuals is reduced (9 % instead of 10,4 %). 2. 4. 4. Using the abovementioned criteria, the author of the study carried out by the French Ministry for Social Affairs found that income from welfare payments received by poor people in 1993 totalled — if we rely strictly on the data provided by the households questioned in the Eurostat survey — FF 63 billion, or slightly less than ECU 10 billion. The total figure does, however, rise to approximately FF 130 billion (ECU 20 billion) if we (a) correct the total to take account of the effects of under-assessment, which involves crediting to each household the benefits which it did not declare despite the fact that it doubtlessly received them, given the rights enjoyed by households and the current practices pursued by the administrative bodies respon- sible for welfare payments, and (b) supplement the assessment by including in the calculations the costs of implementing measures to combat poverty not covered by the Eurostat survey. If, instead of using the criteria adopted in the 2. 4. 5. abovementioned analysis of the recent Eurostat survey, we use the criteria of half the average income rather than half the median income and if we use the ‘Oxford’ scale, rather than the new scale, the total income from welfare payments currently received by poor people amounts to FF 115 billion (if we rely strictly on the data supplied by the households questioned in the survey). If we correct the figure to take account of the effect of under-assessment the estimated total could be between FF 180 and 200 billion (approximately ECU 30 billion). 2. 4. 6. It will be noted that account has not been taken of the cost of help provided to people in need by private associations and bodies. At the present time too little statistical information is available to enable an overall assessment to be made of this cost. In view of the important social role played by these bodies, it would be a useful exercise to question these bodies at local level. Turning to the question of appeals to public generosity, these are generally more effective with regard to help in combating certain illnesses (such as cancer, myopathy and AIDS) than in drives to combat poverty; in the latter case it is not always easy to make a distinction, in the case of funds collected by the associations concerned, between the amount of funding spent on helping combat underdevelopment in countries situated in other continents and the amount spent on helping poor people in Europe. 2. 4. 7. The Committee urges that account be taken of transfer payments made between family members and between generations, such as payments made to young people in difficulty as a result, for example, of unem- ployment. These transfer payments play a significant role in preventing poverty and helping to combat worsening poverty. In a study carried out four years ago the INSEE estimated that the sums involved in transfer payments between family members amounted to FF 140 billion (ECU 23 billion approx. ). 80 % of these payments are made by older persons to young persons and 20 % in the opposite direction. It would be useful to have this type of information for each Member State. 2. 5. It is more difficult to determine the cost of preventive measures than the cost of direct aid to people who are poor here and now and the cost of other help required to alleviate the present situation of these people. If we are to calculate the cost of preventive measures, we need to determine what proportion of the allowances designed to (a) partially offset the expenses incurred by families, (b) fund health expenditure (e. g. measures to safeguard the health of mothers and children) and (c) make payments to particular categories of pensioners, should be regarded as serving to prevent poverty and social exclusion. We should also endeavour to calculate the percentage of total expenditure on basic training and ongoing training which can be regarded as expendi- ture on preventing poverty and social exclusion. To quote an example, should we classify as expenditure on preventive measures the funding of all nursery schools and primary schools in the suburbs of large cities, in the light of the pupils which they look after, or should only a part of this funding be so classified? As far as we are aware no such calculations have so far been made; it would be no easy task to make them. 2. 6. A third area of study to which very little attention has been paid is the measurement of the cost of the last two elements of the cost of poverty, namely the loss of tax revenue and social security contributions and the loss of production as a result of the lower level of consumption by poor households. In the study on the situation in Germany carried 2. 6. 1. out by Dr Rudolf Martens it is estimated that in 1995 the shortfall in the public sector budget caused by the loss of tax revenue and social security contributions due to the number of persons officially recorded as being unemployed amounted to DM 65 billion (ECU 35 bil- lion); this shortfall was approximately evenly divided between the loss of tax revenue and the loss social security contributions. If we equate poor people with only the long-term unemployed, the loss of tax revenue security contributions brought about and social C 284/36 EN Official Journal of the European Communities 14. 9. 98 by unemployment amongst poor people would be DM 13 billion (ECU 7 billion), assuming that when calculating the loss of tax income and social security contributions, the figures in respect of long-term unem- ployed persons are based on those of an ‘average unemployed person’. Turning to the production shortfall brought 2. 6. 2. about by unemployment, the German Labour Market and Employment Research Institute (IAB) has estimated that (1) the figure for the Federal Republic of Germany in 1987 amounted to DM 190 billion (ECU 92 billion); this figure was based on the total number of unemployed persons calculated by the IAB, which included persons both officially registered as unemployed and those not officially registered. For the purposes of the calculations it is assumed that each unemployed person has a notional productivity equivalent on average to 75 % of the productivity of persons actually in gainful employment. We are dealing here, however, with unemployed persons as a whole and not just those unemployed persons who may be classified as ‘poor’. If we venture to estimate that the latter category comprises a fifth of the overall number of unemployed persons — be they registered or not — the production shortfall caused by unemployment would be of the order of DM 38 billion (ECU 18 billion). The value of the shortfall in social security con- 2. 6. 3. tributions in France brought about by unemployment in 1991 has been estimated at FF 138 billion (ECU 21 billion) (2). The following estimates have been made for loss of tax income: (a) loss of income tax revenue — FF 25 billion (ECU 3,8 billion) and (b) loss of VAT revenue — FF 14 billion (brought about by a shortfall in the level of consumption), which amounts to an overall shortfall of FF 39 billion (ECU 6 billion). Bearing in mind that not all unemployed persons may be classified as ‘poor’, the proportion of the overall number of unemployed persons who may be classified as ‘poor’ has been estimated at 25 % for the purposes of these calculations. This figure probably represents a minimum proportion. These people generally earn less than half the average wage. On thebasisofthesetwocriteriatheshortfallinsocialsecurity contributions alone for 1991 could be estimated at some FF 25 billion (ECU 3,9 billion approx. ). The two above-mentioned case studies 2. 6. 4. — referring to the situations in Germany and France are intended to serve only as specific examples; no conclusions, or, more importantly, no generalization should be made in respect of the other Member States on the basis of these examples. VI. CONCLUSIONS: DO WE WANT AN EU WHICH WORKS TO PROMOTE THE INTERESTS OF MANY OF ITS CITIZENS OR AN EU WORKING ON BEHALF OF EVERYONE? 1. In posing this concise question EC Commissioner Pa´draig Flynn got to the heart of the matter. This is an issue which transcends the field of the prevention and treatment of poverty, however important these issues may be. (1) Figures taken from a document provided by Dr Martens. (2) Initial general review drawn up by the French Ministry for Employment — 16 November 1994. 1. 1. The EU seeks to constitute a strong political, economic, social and cultural entity; it does, however, wish to avoid being ‘dominating’ since it is a body founded on the principals of humanism and democracy and therefore dedicated to respecting basic human rights. Is it not a fact that in any democratic society the goal of all activity is to improve living conditions, promote the common good by seeking to bring about fair improvements, based on freedom and responsibility, bearing in mind that, in the interests of justice, solidarity and respect for human dignity, priority has to be given to concern for the most vulnerable? 1. 2. We are duty bound to opt for the second of the two alternatives proposed by Commissioner Flynn; failure to do so would constitute a breach of faith with the founders of the EU and would be tantamount to rejecting the principals underlying the Universal Declaration of Human Rights. In the light of the situation as regards poverty and 2. social exclusion we have to recognize that we have failed in this respect; whilst we have perhaps failed in respect of some policies, the chief failure has been in observing human rights. Whether the number of poor people amounts to 40 mil- lion or 60 million — which does of course represent a considerable difference from an arithmetical point of view and it is the victims of misfortune and poverty who can best testify to this — the offence to human dignity is essentially equally as grave, from a moral and civic standpoint, bearing in mind the ethical requirements and standards which should be met by a society founded on moral principles. 2. 1. Depending on the reference criteria used, at least one person in nine in the EU is poor, according to the statistical data. The total number of victims of social exclusion is estimated to be around 4 million people. In the age group up to 16, one child in five lives in a poor household. And yet, taken overall, our society is highly developed and our culture is founded on lasting humanitarian values. Can we be content with the situation whilst there is even one human being who has been deprived of his dignity? There are significant differences in the level of 2. 2. poverty between the individual EU states. If we are to achieve a higher level of solidarity between the peoples of the EU, the requisite Community measures will have to be consolidated. 2. 3. If this goal is to be achieved, there will have to be a stronger political will amongst the citizens of each of the Member States to transcend the narrow, secure area of our own immediate personal and group interests in order to embrace solidarity rather than self-interest. 14. 9. 98 EN Official Journal of the European Communities C 284/37 2. 4. Firm action needs to be taken everywhere without delay against both the manifestations of poverty and social exclusion and also against the causes of these phenomena. Any procrastination would be harmful to the victims of poverty; it would also damage the image and cohesion of the EU. Who would be prepared to take such risks? 2. 5. The Committee endorses the desire expressed by the European Council in the appendices to the Treaties of Maastricht and Amsterdam to make measures to combat social exclusion one of the goals of EU social policy. 3. The Committee would welcome the introduction of procedures which would enable us to gain an accurate picture of both poverty and social exclusion. Detailed, specific studies should be made out of the situation in each of the EU Member States; these studies should be updated in the light of national surveys. The studies should be drawn up in accordance with rules laid down in agreement with the EU authorities so as to ensure statistical conformity. If successful action is to be taken to tackle poverty, the situation needs to be analyzed in a reliable, objective way. This necessary improvement in the understanding 4. of the situation should be backed up by an interactive drive to educate all those involved in providing social assistance. To this end action needs to be stepped up in the following areas: 4. 1. the ‘poverty and social exclusion dimension’ should be brought into all debates and policy statements, at both national and EU level, in the following fields: politics, education, training, information, employment, health protection and social welfare, housing, access to healthcare, development of new technology, etc. ; 4. 2. the development of courses in civics and an understanding of ethical values, with a view to increasing respect for all people and social groups, particularly the most vulnerable and all those whom misfortune, fate or circumstances have been made different from their fellow citizens; 4. 3. training should be provided for social workers, teachers, healthcare workers, magistrates, members of police forces, etc. in how to make contact with, receive and help people belonging to poor and vulnerable social groups; the exchange of experience between Member 4. 4. States and bodies engaged in combating poverty; emphasizing the role of ‘social dialogue’ as a 4. 5. highly pro-active means of ensuring respect for human dignity and promoting human dignity; proper recognition and real help needs to be 4. 6. given to social bodies, charitable associations and all organizations engaged in combating poverty; this should lead to the provision of practical support for unpaid workers by, for example, providing training for volun- teers. The work of volunteers provides a vital back-up to the work of professional social workers and teachers, whose expertise should be valued more highly and more fully recognized than is sometimes the case at present; 4. 7. victims of social exclusion should be given a collective voice; to this end they should be helped, by organizations which they readily regard as sympathetic. Victims of social exclusion could in this way regain or find freedom by learning how to stand on their own two feet, which is one of the fundamental aspects of citizenship. In addition to pursuing measures designed to 5. improve the living conditions of poor people and victims of social exclusions, there is a need, at the same time, to step up work in the field of the prevention of poverty. 5. 1. Measures to combat unemployment are of prime importance to the prevention and treatment of poverty, a fact which the ESC is constantly emphasizing. Admit- tedly not all unemployed persons are financially poor but many, if not all, are psychologically, socially and emotionally damaged. Unemployment — and especially long-term unemployment — invariably brings a deterio- ration in the living conditions, and hence the quality of life, of a large number of households. No-one would refuse to give their active support to the drive against unemployment given the risks which this phenomenon poses for human beings. The right to have a real job is a fundamental right. 5. 2. Upstream measures are necessary to prevent poverty; such measures need to be taken by society as a whole in the fields of education and training. It is vital to provide people with a general education which paves the way to language skills (reading, writing, speaking, mathematical skills, etc. ) and initial and ongoing vocational training. The ESC has always attached considerable importance to these matters. 5. 3. Help with the parental roles of educating and looking after children and young people (e. g. through the provision of high-grade child-care systems) are also key factors in promoting social integration and the teaching of responsibility, thereby helping to prevent marginalization. One of the goals of family policies and education is to enable families and teachers fully to carry out their roles and meet their responsibilities. 5. 4. Measures to strengthen housing policy — in particular social housing policy — and to monitor the health of the most vulnerable members of society are very important factors in preventing poverty and social exclusion. 6. The role played by the EU institutions is more significant than would at first sight appear to be the case. They are for example involved in specific measures to combat poverty and social exclusion and other contributory measures enacted in the fields of employ- ment, housing, education, public health, family life, young people, etc. The public should therefore be better informed of this role, particularly in view of the fact that action in this field is less noticeable than that in C 284/38 EN Official Journal of the European Communities 14. 9. 98 other practical fields, such as motorway construction or support for economic activities. 7. The drive to combat poverty and social exclusion justifiably hinges on solidarity. Is it not the case that, at times, the progress of developed societies — and consequently the progress of society in the EU — over the last 15 years has, to a greater or lesser extent, been marked by promotion of the interests of the strongest members of society, which has sometimes led to a deterioration in the situation of the less well-off and the disregard for the weakest members of society? As a result the rich are getting richer and the poor are becoming both poorer and more numerous. Is it not also a fact that a number of political decisions and decisions in other fields are tending increasingly to lead, inter alia, to a gradual reduction in the level of social expenditure, whilst at the same time passing on to private solidarity bodies responsibilities formerly met by community solidarity? The pretext sometimes given for such decisions is that they seek to give maximum leeway to market forces believing, no doubt in good faith, that this is the best way to safeguard business competitiveness, which is a necessary factor for combat- ing unemployment and, by extension, a decisive factor in preventing poverty. Can we, however, develop a society which gives real freedom to everybody in a ‘universe’ in which a large number of people suffer insecurity and injustice? The answer is clearly no. The challenges posed to all decision-makers and 8. members of the public by the increase in poverty and social exclusion do, however, call for a response based on something more than merely providing assistance. Such measures represent just one part — which should be of only a temporary nature — of an overall policy aimed at achieving economic and social progress. Regret- tably, there is an increasingly large number of both individuals in all age groups and families for whom welfare payments represent virtually the only regular sources of income. 8. 1. Whilst we clearly have to throw out a lifeline to people who can no longer keep their heads above water, social policy must not, however, represent only a sort of first aid station responsible for offsetting and patching up strategic and political mistakes and errors in eco- nomic, social and education policy. Social policy does indeed have to provide protection and compensation but it also has to seek to promote the rights and duties of all individuals and of society as a whole. 9. Helping the poor by taking from the ‘less poor’ is not the right approach. This would be both unfair and ineffective. 9. 1. The provision of welfare assistance to combat poverty is undoubtedly an expensive business but it has to be recognized that this cost can, to a large extent, be laid at the door of an inadequate level of growth. This, in turn, is a result of insufficient internal demand, particularly from those social groups which have the highest level of unsatisfied needs but who are at the same time least able to pay their way. The number of people in this social group is also tending to increase. All this represents a vicious circle, which it should be possible to break. The social dialogue helps to set out fair and realistic lines of approach; this dialogue needs to be strengthened. 9. 2. If we are to provide effective assistance to those people who are currently poor and victims of social exclusion and if we are to prevent their numbers from increasing in future, we will need resolutely to pursue an economic policy of promoting internal growth. This policy should take account of the need to find the optimum way of meeting the needs of households whose requirements have been the least well met in the past, namely social groups on low or average incomes. This objective is ultimately in the interests of everyone, including those who belong to prosperous social groups. 10. Highlighting the vital importance of growth does not by any means imply a failure to recognize the need for social support in all its various forms. These two measures go hand in hand. Commissioner Pa´draig Flynn echoed this view when he pointed out that: ‘Economic growth and progress in the EU Member States constitute a prerequisite for social cohesion but these are clearly not the only prerequisites. ’ Commissioner Flynn rightly calls for a policy of pro- viding back-up services, otherwise ‘the process of estab- lishing an ever closer union between the peoples of Europe will remain nothing more than a dream’. The ESC fully shares this view. 11. All public and private bodies need to combine their efforts, otherwise the gap between rich and poor is very likely to increase. Society in the EU would thus move faster towards a form of dualism which would increase tensions within individual EU Member States, within the EU itself and in the world at large. Everyone has to be taught to realize that they have an ongoing responsibility for the construction of a fair and harmoni- ous society. The Committee therefore refuses to accept that poverty is an inescapable phenomenon, representing a consequence of, if not to say a precondition for, a ‘future society’ no longer capable of reconciling its tremendous capacity for scientific and technological progress with a respect for the ethical values which it so ardently espouses. Poor people must not always have to pay the price for economic progress which benefits only a fraction of society. 12. There is a high price to be paid for poverty and social exclusion and it is primarily the victims of these phenomena who have to pay the price, even though they are very often not responsible for their plight. A high price also has to be paid, however, by the Member States, the EU and consequently also by members of the public in their capacity as tax-payers. The economy is therefore penalized. 13. We need to be aware of all these costs. Sticking one’s head in the sand has been shown in many fields as an ineffective way to tackle problems. 14. 9. 98 EN Official Journal of the European Communities C 284/39 An understanding of the true situation brings only benefits. No poor person wants to continue to live in poverty. The solution thus lies in a fair and realistic shared responsibility for the prerequisites for develop- ment and a fair and realistic allocation of the fruits of development. The ESC urges that the proposals outlined in 14. this opinion be implemented without delay. Initial assessments — admittedly very limited — demonstrate, if proof were needed, that poverty represents a serious social and economic problem, quite apart from the ethical, moral and civic aspects of this issue. Everyone is involved. No-one can be unconcerned for themselves or their children, either now or perhaps in the future, nor can they fail to be concerned about the future of society in the various Member States and the protection and promotion of the values which they espouse. 15. The Committee made the same observations in 1989 in its information report. The above observations do not imply that nothing has been done in the meantime — far from it — what they do imply, however, is that the situation has worsened and that resolute, realistic policies, based on consensus, are needed to tackle it. This is an issue which fully concerns every single one of us in the European Union. Brussels, 1 July 1998. The President of the Economic and Social Committee Tom JENKINS Opinion of the Economic and Social Committee on ‘Genetically modified organisms in agriculture — impact on the Common Agricultural Policy’ (98/C 284/08) On 11 December 1997, the Economic and Social Committee, acting under the third paragraph of Rule 23 of its Rules of Procedure, decided to draw up an opinion on ‘Genetically modified organisms in agriculture — impact on the Common Agricultural Policy’. The Section for Agriculture and Fisheries, which was responsible for preparing the Committee’s work on the subject, adopted its opinion on 15 June 1998. The rapporteur was Mrs Sa´nchez Miguel. At its 356th plenary session (meeting of 1 July 1998) the Economic and Social Committee adopted the following opinion by 145 votes to two with six abstentions. 1. Introduction 1. 1. The use of modern biotechnology in agriculture offers new solutions which are, at first sight, guarantee- ing yields, helping to cut the use of plant health products in combating pests and diseases, and creating quality products. A debate is opening up within the EU on the use of transgenic organisms in farming, reflecting views on the possible undesirable medium- and long-term effects on consumer health and the environment of their application to the plant sector. Meanwhile, genetically modified produce from non-EU countries, the US in particular, is being marketed. According to estimates for 1998, transgenic 1. 1. 1. plants occupy 30 million hectares of cultivated land around the world (compared to 14 million in 1997), essentially concentrated in the United States (some 88 %), South America (Argentine cotton; 6 %) and Japan (also 6 %). The area under cultivation in China is unknown, but thought to be considerable. It is calculated that worldwide, 60 million hectares will be under this form of cultivation by the year 2000, only 1 % of which will be in Europe. 1. 2. This opinion sets out to adopt a flexible position which, nevertheless, constantly takes account of all those concerned, farmers, consumers and agro-industry, and to reach conclusions. It will focus in particular on the effects which the cultivation of transgenic organisms would have on the CAP and, consequently, on final product prices, with a view to the possible impact of their widespread presence on the international market