The International Labor Organization (ILO) has voiced its concern about the impact of austerity on social protection, saying that measures aimed at offsetting the effects of the crisis have will have long-term detrimental effects on the bloc's economies.
In its 357-page World Social Protection report published on Tuesday, the Geneva-based UN offshoot warned that "together with persistent unemployment, lower wages and higher taxes, these measures have contributed to increases in poverty and social exclusion, now affecting 123 million people in the European Union, 24 percent of the population, many of them children, women, older persons and persons with disabilities."
The report stresses that measures aimed at reducing debt, such as cuts to government spending in the form of reductions to pensions, social benefits and healthcare funding, have failed to stimulate the kind of economic growth that would generate jobs and lead to more members of society contributing to the economy.
"The cost of adjustment has been passed on to populations, who have been coping with fewer jobs and lower income for more than five years. Depressed household income levels are leading to lower domestic consumption and lower demand, slowing down recovery," says the report.
It notes, in particular, the cases of countries like Ireland, Portugal and Greece where slashed disposable incomes resulting from austerity measures linked to international bailout funding have led to a drop in consumption.
“The achievements of the European social model, which dramatically reduced poverty and promoted prosperity in the period following the Second World War, have been eroded by short-term adjustment reforms,” notes the report.
"Poverty in Greece rose to a historically high level [since 2008], exceeding 35 percent of the population in 2013, inflicting intense human suffering as many families found themselves unable any longer to access the basic necessities for a life in dignity."
The report also warns of the long-term effects of austerity on future generations in the European Union, saying that "fiscal consolidation and adjustment measures in higher-income economies threaten progress on income security for children and their families."
"Child poverty increased in 19 of the 28 countries of the European Union between 2007 and 2012; by the latter year, more than one-quarter of children in Bulgaria, Greece, Italy, Romania and Spain were living at risk of poverty," the ILO notes. "This increase in child poverty has given rise to concern about negative long-term effects with regard to the future employment prospects of today’s children, and about the future productivity and competitiveness of European economies."
Cuts in health spending are another major concern, according to the report.
"Lower quality of health service provision leads to worse health outcomes. Weakened mental health, increased substance abuse and higher suicide rates have all been linked with fiscal consolidation measures," the ILO says, citing other reports. "The European Center for Disease Control warned that serious health hazards are emerging because of the fiscal consolidation measures introduced since 2008.
"More specifically, in Greece, Spain and Portugal citizens’ access to public health care services has been seriously constrained, to the extent that there are reported increases in mortality and morbidity," the report notes.