SOCIAL POLICY IN EUROPEAN UNION THROUGH FEW FIGURES

 

EUROPEAN UNION:
Social policy viewed through few figures

By Didier Bertin - 19 October 2010



19 of the 27 members are small states with populations below 11 million. The 8 most populous states represent 78% of the population of the European Union and are in ascending order, Netherlands, Romania, Poland, Spain, Italy, UK, France and Germany. Nearly two thirds of EU's population is composed by 6 of the richest states.


In 2004 and 2007 the EU has integrated 12 relatively poor countries thus accepting to help them to reduce the disparities with the 15 members; These 12 countries have an average GDP per capita of 58% of EU’s average GDP per capita the poorest country (Romania) represents only 6.8% of GDP per capita in the richest country (Luxembourg).


Equality and dispersion of income


5 of the richest countries in Europe have a relatively egalitarian policy, with very low income dispersion between 0.23 and 0.27, which should inspire others the other U.E.’s members: These countries are Sweden, Denmark, Luxembourg, Austria and Germany.

The average European index is 0.31 while those of the 14 most developed countries (GDP per capita> $ 30,000) in Europe, is more egalitarian with 0.29.

Among the richest members, 6 have a dispersion index both above the EU average and that of the 14 richest members. These members are:

-Ireland and the UK, probably because of their taste for liberal economy,

-Greece, Italy and Spain, probably because of their social traditions correlated with low industrialization and small size of most businesses,

-France probably because of tax system in favor of privileged castes and because of a gap between a pretended social policy and that actually applied.



Demography

With the exception of France, the EU population is aging with a very low averaged fertility rate of 1.5, which raises fundamental issues. Only two countries whose population represents more than 1% that of UE are combining a positive population growth and median age below 40 years: France and Portugal.

Good demographic situation in France appears to be the result of an open immigration policy today ending. The fertility rate close to 2 in France is by far the best in Europe. The fertility rate of immigrants in France is, according to INSEE, 2.4. A policy against aging should consist of better assistance to parents and a more opened immigration policy.

Delaying the retirement age in European Union is an adaptation to the economic crisis and its demographic consequence that does not respond satisfactorily to the treatment of the roots of this situation.


Employment


 The countries least affected by unemployment are Denmark, Austria, Cyprus and Netherlands with an unemployment rate at or below 5%. The unemployment rate should be linked to economic development but depends also on political will. For example, GDP per capita in Spain is 1.6 times higher than that of Cyprus and the unemployment rate in Spain is 3.85 times higher than in Cyprus. Spain has a still satisfactory level of GDP per capita but unemployment (18.1%) is similar to that of Sudan. After Spain and Ireland, both in serious crises, France is suffering the highest rate of unemployment of the former 15 members EU.

 

Life and Health

In Europe, life expectancy is proportional to economic development. In the 14 richest countries of the EU life expectancy is on average over 79 years. In the 8 poorest countries, all in central Europe, life expectancy ranges from 72.7 years to 75.6 years.

The average life in poor health is similar, about 19 years, in 7 of the poorest countries and in the 14 richest of EU, but it represents a larger share of the total life in the poor countries where life is shorter.


Life in poor health is particularly important in Austria, Germany, Finland, Portugal, Bulgaria and the Baltic countries since it is in excess 20 years for non related reasons. These reasons are partly due to inadequacies of the health system for the poorest members and a fragile life extension for the richest.

 

Education

 
We can distinguish three groups of countries:

6 highly advanced countries with spending of at least 6% of GDP:

A-Belgium 6%, Slovenia 6%, Cyprus 6.3%, Finland: 6.4%, Sweden: 7.1% and Denmark with a remarkable figure of 8.3%

B-10 countries in the EU average with spending by 5% to 6% of GDP:

-Latvia, Lithuania, Poland, Hungary, Estonia, Malta, France, the United Kingdom, the Netherlands and Austria,

C-11 countries below the European standards with spending less than 5% of the GDP:

-Luxembourg, Ireland, Germany, Spain, Greece, Italy, Czech Republic, Portugal, Slovakia, Bulgaria and Romania.

We see that education is still in the realm of political far from economic contingencies. Countries that promote equality whatever is the label of their governments often promote education. Central European countries that have limited economic development maintain a satisfactory cultural tradition. France and Germany are not in the rank where they could have been expected. Surprisingly 7 of the 11 unsatisfactory countries in this respect belong to the EU-15.

  


Public Finance: Debt

Among other debt may be also linked to the resources that the state allows itself by its organization and philosophy and the priorities set by itself (e.g. role international scene, Defense...). All states are not getting the same credit facilities and thus less developed states of the EU have a limited debt. We will see the countries of the former EU-15 and we may distinguish three groups:

1-Only five countries have debt less than or equal to 50% of GDP: Luxembourg, Sweden, Denmark, Finland and Spain, which did not make Spain immune to a serious crisis.

2-Four countries have a debt equal or greater than GDP: Portugal, Italy, Greece and Belgium.

3-The other 6 countries have a public debt of around 70% of GDP: Ireland, Austria, Netherlands, United Kingdom, Germany and France (79.7%).

 


France has high debt but still within the limits of the public debt of European countries, the most important being the applications of resources from debt.
The interest to examine the debt in a social report is due to the fact that debt is used by some states as an argument to restrict their  effort of social spending, then it is again most often a question of philosophy than facts.

We will see in a coming analysis that inequality may generate a substantial accumulated public debt.

NB:The sudden need of public debt of Ireland is due to the inconsistency of its Banks involving a high rescue effort and not to its social policy – This should be an alert for other countries