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14.9.

98 EN Official Journal of the European Communities C 284/25

grammes and industrial cooperation centres should be on RTD on the basis of the principles of reciprocity and
set up to stimulate the exchange of technological mutual interest.
know-how and promote technological agreements
(licences, transfer of patents ...), between enterprises. 9.3. Schemes could be launched with the developing
The Committee recommends that the resources of Phare, countries, and more especially our partners under the
Tacis and MEDA be mobilized to this end. 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
9.2. Notwithstanding the priority given to the appli- on the future of the Lomé Convention (1), the Committee
cant countries, our other neighbours and the Euro- had proposed horizontal instruments for cooperation
Mediterranean Area, it is desirable for the European and the dissemination of technological innovations
Union to join forces with our main developed partners under the new European Development Fund.
in promoting the opening up of networks for the
promotion, exploitation and provision of information (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 — Interim programme to combat poverty (3).
CALLS ATTENTION TO THE SEVERITY OF THE
SITUATION — Specific action to combat poverty (4).

1. The ESC has always paid considerable attention — Amendment to the decision on a specific Community
to inequality and injustice; it has therefore always been action to combat poverty (5).
concerned about poverty and its extreme manifestation,
namely social exclusion. The following opinions and — Information Report on poverty (March 1989) (not
reports issued by the ESC serve to demonstrate its published in the Official Journal).
concern for this issue:
— Programme of pilot schemes and studies to combat — The economic and social integration of the least-
poverty (1). privileged groups (6).

— Modifications to the programme of pilot studies to
combat poverty (2).
(4) OJ C 113, 7.5.1980.
(5) OJ C 25, 28.1.1985.
(2) OJ C 263, 17.11.1975. (6) OJ C 263, 20.10.1986.
(3) OJ C 180, 28.7.1977. (7) OJ C 159, 26.6.1989.
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— Own-initiative Opinion on poverty(1). II. AN APPRAISAL FOCUSING ON THE COST OF
POVERTY AND SOCIAL EXCLUSION
— Alternate resources and social assistance in the social
protection systems (2).
1. The approach which the Committee has chosen to
— Own-initiative Opinion on social exclusion (3). adopt presents it with a difficult task given the diverse
situations and the shortage of information.
— Action programme to combat exclusion and promote
the economic integration of the least-privileged
groups (4). 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
2. The Committee’s vigilance is not reflected solely in combating poverty and social exclusion.
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, 3. Poverty and social exclusion exact a toll on their
unemployment, young people, the elderly, training, victims by lowering their quality of life. It should not be
information, social cohesion and integration; and the completely impossible to measure this loss of quality of
opinions dealing with groups and individuals who are life. The legal concept of pain and suffering can be
liable to be victims of the ‘accidents of life’ and history. calculated as a monetary value and compensation may
be paid.

3. Particular mention should be made of the cam- This loss of quality of life also brings about a sharp
paigns undertaken by the ESC to enhance civil rights; reduction in the extent to which the everyday needs of
these campaigns were predicated on the vital need to households can be met.
recognize everyone’s political, social, economic, cultural,
individual and family rights and responsibilities.
4. The shortfall in consumption does not penalize
4. The Member States are taking measures — geared only the poor. It penalizes the economy as a whole:
to their respective situations, resources and political business turnover suffers, workers lose out because
approaches — to stifle poverty and tackle its effects. 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
5. The EU is also playing an active role, by means of consumption; and (b) social contributions geared to
both general programmes and specific action, such as the level of business activity. Consumers with low
measures to combat long-term unemployment, promote purchasing power turn to cheaper products, which
training and reintegration in society and develop ailing frequently means products imported into the EU.
areas and sectors of activity.

5. The cost of poverty and social exclusion also
6. Public institutions and private bodies and move- includes the cost of public and private help provided by
ments dedicated to combating poverty are full of society to the victims of these phenomena: preventive
enthusiasm for their task. measures, social back-up measures, various benefits in
cash and in kind, etc.
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 6. The question of what the term the ‘high cost of
churches and the bodies which stand up for human the measures to combat poverty’ means to a Member
rights are drawing attention to the principles of freedom, State or Community should be addressed. Are such costs
justice and solidarity, whilst, at the same time, taking brought about by the existence of a large number of
concrete action. poor people? Are they the result of a vigorous policy
and strong action to prevent poverty and to tackle
poverty?
8. POVERTY IS, HOWEVER, CONTINUING TO
SPREAD AND WORSEN. The ESC thus raises its voice
loudly and forcefully in support of all those who are 7. It is not just the public authorities which are
sickened by poverty and calls attention to the severity working to combat poverty. By educating their children,
of the situation. 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
(1) OJ C 221, 28.8.1989. responsibilities, parents help to educate children and
(2) OJ C 14, 20.1.1992. young people and thus help to ensure that they have a
(3) OJ C 352, 30.12.1993. stake in society. This parental contribution is one of the
(4) OJ C 52, 19.2.1994. reasons why family policies need to be expanded.
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8. Associations and movements specifically dedicated statistical definition and analysis of social exclusion;
to the prevention and treatment of poverty play a very and the quality of assessments and reports. The goal
important role by showing solidarity and demonstrating pursued here by Eurostat is to set up a procedure for
a close concern for real issues. These associations largely providing regular briefings on social exclusion and
rely on unpaid volunteers; the work of such volunteers poverty addressed to the EU Member States. The first
represents one of the ways in which solidarity is report should be published at the end of 1999. These are
expressed in practice. The work of these associations is very important decisions.
funded from grants, charitable appeals and members’
contributions.
2.3. Most of the statistical data referred to in this
There is no clash between the predominant role played opinion is taken from a survey carried out by Eurostat
by social workers and professional teachers and the role in 1993.
played by voluntary workers. One of the key ways in
which social reintegrations can be achieved is by teaching 2.3.1. At that time the EU comprised 12 Member
— or re-teaching — the potential or actual victims of States; Austria, Finland and Sweden joined in 1995.
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 2.3.2. It is quite likely that changes have since taken
the availability of individuals. Bearing in mind the whole place regarding the level of poverty in one or other of
range of consequences of poverty and social exclusion the states covered by the 1993 survey. Such changes will
and the very severe risks which they pose to individuals not however detract from the importance of the data set
and society, everyone must realize that they have to take out below.
action, at their respective levels and in the light of their
respective skills and resources.
IV. BEFORE ADDRESSING THE QUESTION OF
THE COST OF POVERTY WE NEED TO BE AWARE
III. SOURCES USED OF THE ACTUAL SITUATION

1. This opinion draws mainly on four sources of inter alia, by providing answers to the four questions
information: set out below:

— the work carried out by Eurostat and national 1. How can poverty be defined and measured?
statistical institutes and bodies;

— opinion polls; 2. How can social exclusion be defined?

— conceptual observations and some national data 3. What is the actual number of poor people in the EU?
compiled with the assistance of members of the ESC
study group;
4. Why are people poor and how do they become poor?
— information based on the experience of bodies which
help to combat poverty and social exclusion.

1. Definition and statistical measurement of poverty
2. Three observations immediately spring to mind:

1.1. If they are to be meaningful, the various phenom-
2.1. There is a considerable shortage of data relating ena associated with poverty have to be measured using
to the costs of poverty as described above; such data is the yardstick of ‘households’ (1). It is thus assumed that
also not necessarily available in the same form in the all the members of a household share the same standard
various Member States. of living.

2.2. Eurostat and the national statistical institutes Statistical ‘households’ should not be confused with
have a very important role to play in providing strategic ‘families’, which comprise a couple or a single adult,
back-up to political decisions and in helping to assess together with their children. A family may well be divided
follow-up action. Whilst regretting, therefore, that between several statistical households. A statistical
Eurostat did not have sufficient resources to enable it to household, on the other hand, may include persons not
meet its requests, the Committee notes with keen interest related in any way.
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 (1) The international statistical definition of a ‘household’ is:
adoption of comparable concepts and definitions in ‘a single person or group of persons usually living in the
respect of income; an analysis of financial poverty; a 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 1.5. The richer the overall number of inhabitants of
definition of poverty. This definition is based on average a country is, the higher the poverty threshold. To quote
expenditure per unit of consumption or equivalent an example, when a Luxembourg household slips below
adult. (1) Households are classified as ‘poor’ if their the national poverty threshold it has a purchasing power
income falls below 50 % of this average figure; this which is three times higher than that of a Greek
represents the ‘poverty line’. of Portuguese household slipping below the poverty
threshold in their respective countries.
1.3. In view of all the consequences which poverty
has on the lives of its victims this phenomena has to be 1.6. There are variations within one and the same
measured as close as possible to the areas in which Member State, in addition to the significant differences
people live. The table below thus sets out the poverty in standard of living between Member States. To quote
lines set by each of the individual EU Member States; an example, the same level of income will not ensure
the figures are given in the respective national currencies the same standard of living in different regions, the
and are based on total recorded income in the respective centre of large cities, various urban areas, suburbs or
Member States: villages.

Comparison of 2. Definition of ‘social exclusion’
poverty thresholds
Poverty thresholds
(and average standards
calculated on the basis
of living) expressed
2.1. The Committee has already set out its views on
State of average income,
as an index. social exclusion in an own-initiative opinion drafted by
expressed in national Miss Maddocks. This opinion was adopted unanimously
Weighted average
currencies
of the thresholds of on 30 September 1993 (2).
the 12 EU states = 100
2.2. Poor households display different levels of pov-
Luxembourg 38 750 LFR 202 erty; this is of course the result of different levels of
Germany 1 248 DM 115 income but is also sometimes brought about by other
United factors, such as: the psychological state of the persons
Kingdom 378 £UK 111 concerned, the quality of their family relationships, their
Belgium 22 930 BFR 110 general situation as regards relationships and social life,
the rules governing access to social measures and social
Denmark 5 328 DKR 108 support, and whether or not they can turn to associations
Netherlands 1 175 HFL 106 for help. It is not necessarily possible to place a financial
France 3 716 FF 106 value on all of these factors but they have a considerable
Italy 667 600 LIT 84 impact on the way in which poverty starts and develops.
Ireland 294 £IRL 82
Spain 48 090 PTA 77 2.3. The term ‘severe poverty’ has thus been intro-
Greece 67 990 DRA 66 duced to describe the situation of individuals and
Portugal 42 580 ESC 64
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
1.4. The standard of living in the various EU Member not taken as soon as possible to ease their plight.
States varies considerably. With a view to comparing
poverty lines, the sums involved in the various national 2.4. ‘Complete’ social exclusion is the final culmi-
currencies have been converted into a single currency nation of a series of specific exclusions from basic rights.
using exchange rates which take account of differences The rights in question here include: the right to receive
in general price levels between the various states; the training; the right to have a job; the right to decent
differences in levels of income in respect of the twelve accommodation; the right to live as a couple and lead a
poverty lines thus reflect the differences in the purchasing responsible family life; the right to have access to social
power of the households concerned. The use of these protection and care services; and the right to enjoy a
exchange rates ensures ‘parity of purchasing power’. reasonable standard of living. Victims of social exclusion
— be they individuals or families -Generally speaking,
people descend into a state of social exclusion quite
(1) Under the ‘Oxford scale’ for assessing units of consump- quickly i.e. they cease to be regarded by society as
tion: the first person, generally an adult, counts as one unit persons who enjoy those rights and characteristics which
of consumption; subsequent persons aged 14 or over count are fundamental to human dignity, as expressed by
as 0,7 of a unit; each person aged under 14 counts as 0,5 social, economic and cultural integration and civic
of a unit. Under the scale used by Eurostat and a number recognition. Victims of social exclusion are no longer
of national institutes: the first person is counted as under
the Oxford scale; persons aged 14 or over count as 0,5 of able legitimately to exercise their basic rights in the
a unit; persons under 14 count as 0,3 of a unit. By way of normal way. They are effectively without rights and
example, if we take a household comprising two parents, without a voice.
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) See OJ C 353, 30.12.1993.
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2.5. Not every victim of poverty is, however, bound 3.1.1. The reason why the yardstick of half the
to suffer marginalization or social exclusion. In the same average income was chosen was in order to maintain
way, whilst victims of poverty and social exclusion may continuity with the estimates of the level of poverty made
take to crime and violence, it is not by any means all earlier by the Commission. As will be demonstrated at
such victims who are involved in such extreme action. a later stage, the use of this yardstick provides a much
What is true, however, is that poverty, and social higher proportion of poor people than if the yardstick
exclusion may give rise to legal measures, educational of half the median income were used to determine the
schemes and programmes to check these phenomena poverty threshold.
which are costly to society; there is also a need
to highlight the cost of acts of violence to victims, 3.1.2. Reference to income rather than expenditure
perpetrators and their respective families. Children leads to a sharp increase in the number of poor
cannot be held responsible for the acts of their parents; households. The use of a different method of establishing
they should also not suffer as a result of those acts. units of consumption produces only a very slight change
2.6. In the same way, all victims of social exclusion in the percentage of poor households in the overall
cannot be classified as ‘poor’. Some forms of social population; it does, however, slightly reduce the pro-
exclusion derive mainly from causes which are of a portion of poor households in the category of large
physical, psychological, social, ethnic, cultural, religious, families while increasing the proportion amongst house-
political, etc. nature and other forms of social exclusion holds comprising just one person.
are linked to handicaps; such situations are not necess-
arily accompanied by financial deprivation (though this 3.1.3. In the table below the figures in the left hand
is frequently the case). column indicate the percentage of poor households,
calculated in accordance with the criteria described
2.7. Whilst it has been possible mathematically to
establish the threshold for poverty, it is, however, more above (2), in each of the 12 Member States which made
up the EU in 1993.
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
percentage of percentage of
exclusion, namely homelessness, can be readily iden- poor households — poor households —
tified. It is, however, clear that if adequate or timely State
reference criterion: reference criterion:
action is not taken to combat poverty, there is a risk half of average income half of median income
that it may lead — sooner or later — to marginalization
and social exclusion.
Belgium 13 9
2.8. The victims of marginalization and social Denmark 9 5
exclusion are not properly covered by statistics. Most Germany 13 10
of the persons concerned do not enjoy conventional
living conditions. A large proportion of them live in: Greece 24 18
hostels, social readjustment centres, temporary shelters, Spain 19 11,5
bed and breakfast accommodation, shantytowns, cara- France 16 11
vans, or, worst of all, they have no fixed address, Ireland 21 6
sleeping in the open, in railway stations or under bridges.
Italy 18 13
2.9. The final stage in the process of social exclusion Luxembourg 14 7
is moral collapse which may lead people to suicide,
which represents the final cry for help which goes Netherlands 14 10
unanswered. Suicide is one of the major causes of death Portugal 29 19
and it is on the increase, particularly amongst young United
people, the very lonely and the elderly. Kingdom 23 14

3. How many poor households and individuals are EU-12 17,3 12
there in the EU?
3.1. Eurostat has calculated the poverty thresholds
for the various Member States, based on half the average 3.1.4. As was the case with all the other tables the
income per unit of consumption; as was pointed out purpose of these statistics is of course not to set out a
above, these units of consumption were established ‘league table’ in respect of the various Member States;
using a different scale to the traditional Oxford scale (1). this would be insulting to poor people, the Member
(1) Under the ‘Oxford scale’ for assessing units of consump- States and their governments which are having to tackle
tion: the first person, generally an adult, counts as one unit difficult situations using the measures which they deem
of consumption; subsequent persons aged 14 or over count appropriate.
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 3.1.5. It is interesting to compare the above figures
of national institutes: the first person is counted as under
the Oxford scale; persons aged 14 or over count as 0,5 of with the figures for the percentage of poor households
a unit; persons under 14 count as 0,3 of a unit. By way of in each of the 12 Member States listed above established
example, if we take a household comprising two parents, on the basis of half the median level of income rather
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) See point 3.1.1.
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than the average level of income. These figures have poor households when the reference basis used is the
been calculated by the French Institute for Statistics and median level of income (or standard of living) in the EU,
Economic Studies and are set out in the right hand rather than the median living standard in the respective
column of the table. states themselves.
3.1.6. When there is a considerable discrepancy 3.1.9. On the basis of the 1993 survey, the total
between the two sets of percentages this implies that the number of poor people in the EU-12 was 57 million,
state concerned has a particularly large percentage of using the reference criterion of half of average income,
persons having very high income levels (this results in a and 38,7 million, using the yardstick of half of median
significant difference between the figure represented by income.
half the average income and that represented by half the
median income). Austria, Finland and Sweden, joined the EU two years
3.1.7. Irrespective of whether the calculations were after the 1993 survey had been drawn up.
made on the basis of half the average income or half the
median income, the figures for the percentage of poor On the basis of careful extrapolation and in the light of
people in the respective Member States have so far information obtained from various sources, it may be
always been established on the basis of the standard of conjectured that the total number of poor people in the
living (average or median) of the individual state EU-15 could be approximately 59 million or 39,5 million,
concerned. As the standard of living varies from one depending on the reference criterion used. This would
Member State to another, a household regarded as poor mean that one person in six, or one person in nine, was
in one Member State would, if it retained its standard poor.
of living, not be regarded as poor in another Member
State. In the light of this observation there is a need to 3.2. After having made an appraisal of poverty in the
determine the percentage of poor people in each Member EU it would be helpful to briefly examine the facts
State of the EU measured on the basis of half the average which are known about the gravity of the situation in
or median income in the EU, i.e. regarding the EU as a the world as a whole.
single economic entity. These figures are set out in the
right hand column of the table below. The reference 3.2.1. People in many countries are striving for
criterion used was half the median level of income in development. These nations look towards the European
the EU-12 in 1993; this figure was determined on the Union with a mixture of envy and hope, sometimes
basis of recorded levels of income in each of the Member backed up by a more or less objective understanding of
States, expressed in a single currency using exchange the situation in European countries. We must not
rates which ensured ‘parity of purchasing power’. disappoint the legitimate expectations of these peoples
since to do so would be to contravene the principles set
Percentage of poor households out in the Universal Declaration of Human Rights.
Article 1 of the declaration states that ‘all human beings
calculated by reference calculated by reference are born free and equal ... and should act towards one
State to half the median to half the another in a spirit of brotherhood’.
income in the respective median income
state (%) in EU-12 (%)(*) 3.2.2. In 1994 4,3 billion people — three quarters of
the world’s population lived in the Third World.
Belgium 9 7 According to the figures for 1992, 57 countries — with
Denmark 5 5 a total population of 3,7 billion — had an annual per
capita GNP of less than $ 675. Over a billion human
Germany 10 7 beings have to live on less than $ 1 a day.
Greece 18 36
Spain 11,5 25 Even bearing in mind the impact — which is difficult to
France 11 10 assess — of the ‘informal’ economies, the discrepancy
in wealth between the EU and the Third World is of the
Ireland 6 25
order of 25:1.
Italy 13 19
Luxembourg 7 1 3.2.3. The reason for drawing attention to this harsh
Netherlands 10 9 reality is not to try to convince poor people in the EU
Portugal 19 44 that it would be very wrong of them to complain, since
other continents have billions of people who are much
United poorer than they are. The aim is rather to highlight a
Kingdom 14 13
dual responsibility:
Average
— a responsibility towards our fellow citizens who are
of EU-12 12 13,7
living in poverty and misery;
(*) These figures were calculated by the French National Institute for — a responsibility towards people living in countries
Statistics and Economic Studies (INSEE) using data from the 1993
Eurostat survey.
which remain underdeveloped and with which some
Member States have historic ties; people in these
countries want to see an improvement in their living
3.1.8. The states having a standard of living — and conditions, or in the case of many such people, they
consequently also a poverty threshold — below the simply want to avoid dying of hunger. Indifference
median level for the EU have a higher percentage of or even the use of force, are not the weapons
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which should normally be used to combat poverty; — retired persons who are former unskilled manual
ritualistic statements of pity for the victims of workers or non-manual workers aged over 75 and
poverty are equally inappropriate; the widows of these retired persons;
— these observations underline the importance of the — families having four or more children, in cases where
North-South dialogue and the urgent need for the head of household is a manual worker or a
humanitarian reasons and on grounds of maintaining non-manual worker — irrespective of whether the
geo-political balance, for talks on world economic person is employed or unemployed — having a
issues and trade to cover also the wretched situation spouse who is not in gainful employment or who is
of people living in severe poverty. unemployed;
— single-parent families in which the head of household
4. Why are people poor or why do they become poor? — most frequently a woman — is unskilled.
4.1. The direct causes of poverty are all aggravated
by situations which considerably, and in a lasting way, 4.1.4. Amongst the causes of poverty, unemployment
restrict the prosperity of households to the point where has a particularly strong impact even though it is
the exercise of household rights, the fulfilment of invariably not the main cause of poverty. All unemployed
household responsibilities and the quality of the life of persons are not, however, poor but there are an
the household are seriously jeopardized. increasing number of poor people amongst persons
working in semi-skilled or unskilled jobs who conse-
4.1.2. On the basis of the statistics provided by quently are on low incomes and whose jobs are frequently
Eurostat, four main factors in the development of insecure.
poverty may be identified. The first two factors are
unemployment and lack of vocational qualifications. 4.2. Poverty may also have a number of causes which
These two factors are frequently interlinked. People are more indirect than those mentioned above. Examples
who lack vocational qualifications find it difficult to of such causes are inadequate or inappropriate training
secure stable employment and even those with jobs which makes it difficult to find and hold down jobs,
command only inadequate wage levels. The other two particularly at times of recession or rapid technological
factors are large families (four or more children) and change. Further examples of such causes are poor health
age (persons aged over 75). The latter factor is to a large and the inadequate or non-existent care; these situations
extent generation-related: the oldest people do not may give rise to job instability or may even make it
always have levels of pension equivalent to those secured necessary for people to give up work altogether.
by later generations.
4.1.3. By combining a number of criteria (socio- 4.3. The influence of living conditions should be
economic categories, the skill level of the ‘head of highlighted. Insecure living conditions are frequently
household’, the length of time people have been unem- brought about by poverty but these conditions them-
ployed, family sizes and age) it is possible to identify selves may also trigger poverty or represent a factor
types of households among which there is a strong which accelerates a slide into poverty, marginality or
probability of finding a high proportion of poor people. social exclusion.
The characteristics of such households are as follows:
4.3.1. Accommodation has a considerable influence
— households (couples with or without children and on the quality of life, the happiness of couples, the
single-parent families) in which all the adult members bringing up of children. Those who are homeless have
are unemployed; no foothold in society, it is rarely possible for them to
— persons who have been unemployed for long periods find stable employment. Accommodation is a factor in
(over a year and, in particular, over two years) and determining social esteem. People who are homeless
who are aged over 25, irrespective of their level of may sometimes lose all their civic entitlements and even
skills; their civic rights. Some states have, however, taken steps
to enable homeless people to vote.
— unemployed persons — particularly people who
have been unemployed for long periods — who are Housing conditions vary according to location. The
aged under 25, and who do not live with their location of housing has a bearing on most items of
families; household expenditure: transport, educational expendi-
— workers who have jobs but receive low rates of pay ture, shopping conditions, and hence the cost of shop-
because they are poorly qualified, are obliged to ping; it also sometimes influences social relationships.
work part-time or work intermittently;
4.3.2. Owning one’s own accommodation is tanta-
— households comprising only one wage-earner, who
mount to having an additional source of income. With
is an unskilled manual worker or non-manual a view to measuring actual standards of living more
worker; effectively, many countries, therefore, add to the income
— farmers engaged in mixed farming or livestock farm- or expenditure of home-owning households a notional
ing whose holdings are of such a type (small size, poor income designed to give a monetary value to this
yields, producing unprofitable products) that they advantage. The poverty threshold is thus raised to a
provide only a low level of income, in cases where higher level than would otherwise be the case and this
such households do not have additional sources of results in a slight increase in the proportion of poor
income, such as those obtained by wage-earners; households.
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4.3.3. A number of households are in the process of society. Households which, on the basis of mathematical
buying their homes. They have to repay mortgages and criteria, may be classified as ‘poor’ declare themselves
make interest payments — some of which are excessively not to be poor if at least one person in the household
high — and this factor may have a negative impact on has a stable job providing gainful employment; on
their quality of life. An excessive level of debt may the other hand, households which, on the basis of
trigger the slide into poverty or considerably worsen mathematical criteria, cannot be defined as ‘poor’
the situation. Objective information and help with declare themselves to be poor if no member of the
decision-making before committing oneself to the pur- household is in gainful employment.
chase of property is thus a necessity, as is a policy on
the provision of high-grade rented social housing. 4.4.5. Self-assessed levels of poverty are therefore
influenced by considerations other than standard of
4.3.4. On 18 March 1997 the European Parliament’s living. The fact that people are employed, elderly or
Committee on Employment and Social Affairs adopted lonely brings home to them their vulnerability and
a draft resolution in which it pointed out that there were triggers distressing questions relating to their value to
no less than 18 million people in the EU who could be society and what fate has in store for them.
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 V. HOW CAN WE MEASURE THE COSTS OF
housing had to be regarded as the cornerstone which POVERTY AND SOCIAL EXCLUSION?
underpinned all the other basic social rights (1). The ESC
shares the Parliament’s appraisal and its conclusion.
1. Preliminary observations
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 1.1. If we are to calculate the costs of poverty and
tell us about how poverty is viewed. 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
4.4.1. Opinion polls conducted amongst households paragraphs an attempt has been made to carry out an
with a view to securing a subjective assessment of appraisal and provide some broad figures.
poverty, based on the appraisals by households of
their own levels of prosperity, yield results which are
sometimes different from analyses based on essentially 1.2. In order to proceed to the following stage there
objective data, such as household expenditure. The is a need to (a) determine the cost of tackling situations
sharpest contrasts occur when the target groups are of poverty and social exclusion and implementing
retired persons and large families. prevention measures and (b) measure the impact on
production, employment, fiscal revenue and social secu-
4.4.2. Retired persons tend to consider themselves to rity contributions of the reduction in the level of
be poorer than their standard of living would indicate. consumption attributable to poor people and victims of
In the case of some retired persons this may be put down social exclusion.
to the following factors: fear for the future; lack of
occupation; isolation; failure to take account of the 1.3. This is a complex and difficult task. By way of
value of services that they sometimes receive either free an example, although it is recognized that unemployment
of charge or at a reduced cost. plays a role in the development of poverty, the total cost
of unemployment cannot be included in the cost of
4.4.3. Members of large families are frequently more poverty. In the same way, it cannot be assumed that all
content with their lot and their relatively low standard family benefits help to prevent poverty. A further
of living than are people living alone and even childless question which needs to be answered is whether poor
couples having much higher standards of living. The families receive assistance because of their family status
reason for this is because of their children, large families or because they are poor. Quite apart from consider-
have a very high degree of resilience to poverty (2); it ations of accountancy, the answer to this question is
should also be noted that in the case of the poorest large important from the point of view of defining the nature
families the children frequently represent the family’s of family benefits (do they represent compensation or
only hope. assistance?) and from the point of view of specifying
where necessary, which families are entitled to receive
4.4.4. Opinion polls also confirm the overriding benefit. It should be noted that in the case of very poor
importance of having a job, as a factor in determining families and individuals, welfare payments frequently
whether or not people are optimistic and feel part of 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. 1.4. On a more general note, whilst it may seem
(2) Large families frequently receive assistance from associ- possible to quantify the cost of some measures explicitly
ations which stress the need to learn how to acquire or designed to tackle the consequences of poverty (specific
regain dignity in all its forms: parental dignity, social benefits and services), it is more difficult to pinpoint,
dignity and civic dignity. 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, these costs: (a) by estimating the costs of the production
information, accommodation and health. All policies which would be achieved by partially or wholly unem-
are implicitly preventive. Education involves measures ployed poor people if they were provided with work;
to combat illiteracy and medical care improves the state (b) by estimating the level of overall demand if the
of public health by treating individual patients, and unfulfilled needs of poor people were met.
vice-versa.
2.2. It should by now be possible to calculate, in
1.5. On the basis of partial data acquired from every Member State, the costs listed under the first
various sources one fact is already clear: poverty and heading. The costs could be calculated on the basis of:
social exclusion exact a heavy economic cost and this
cost is tending to increase. As has already been noted, 2.2.1. a list of the social benefits which are, as
Eurostat is at the present time unable to provide full a general rule, paid only to disadvantaged groups
information, established on a harmonized basis, on the (minimum living wages and a number of paid benefits,
costs of poverty and social exclusion. The ESC does not, subject to means-testing) and a list of the benefits
by itself, have the means to draw up an exhaustive table — generally paid to a broader group of beneficiaries —
setting out the costs of poverty and social exclusion. where part of these benefits is paid to poor households
With a view to carrying the appraisal a stage further, and poor individuals, even though it is difficult to assess
however, the Committee has set out below an outline the percentage involved;
method for calculating these costs, together with exam-
ples. The ESC does not seek, though, to prescribe a 2.2.2. surveys, involving a sample of households who
particular course of action. Flexible implementation of are asked to compile, with the assistance of a member
this method by members of the study group set up by of the survey team, a list of their income (both income
the Committee’s Section for Social Affairs — some of from work and income from transfer payments). Using
whom have already compiled information on the subject this method it is possible to identify poor households
— should help to enable further progress to be made at — according, for example, to the definition used by the
a later stage. Commission — and to calculate their incomes from
various welfare payments.

2. The Committee’s contribution towards the estab- 2.3. If we opt to calculate the costs of the benefits
lishment of an outline method of calculating costs normally earmarked for poor people or which may be
paid to them, the following payments could be included:

2.1. The costs of poverty include (a) real expenditure — unemployment allowances, known as ‘solidarity’
and (b) a shortfall in revenue or loss of income. payments, paid to the long-term unemployed; these
allowances should be distinguished from ‘unemploy-
The cost can be calculated under the following four ment insurance payments’;
headings: — retraining allowances and job-seekers allowances
paid to the long-term unemployed, in particular
2.1.1. (a) aid — in cash or in kind — provided by young people and elderly workers;
states, regional authorities and social or public health
bodies to the victims of poverty in order to enable them — minimum subsistence payments (such as income
to bring some improvement, however slight, to their support) paid to persons without income or savings;
situation and (b) the collective costs assumed by society — welfare payments paid to children from deprived
in respect of: finding jobs for victims of poverty; bringing backgrounds, young people who are in difficulty
about their reintegration into society; and in making and low-income handicapped persons;
good the damage sometimes caused by people suffering
from poverty; — means-tested family benefits paid to families having
at least three children; payments made to lone
2.1.2. the cost of carrying out policies for preventing parents; payments made to low-income families;
poverty or social exclusion; — minimum subsistence payments made to old people,
welfare payments or home-helps for old people who
2.1.3. the losses incurred by the public purse as a have no income or savings;
result of the shortfall in taxes and social security
contributions brought about by under-employment and — medical grants paid to low-income sick people,
the reduced levels of income and consumption of invalids, handicapped persons and, more generally,
poor households and, of course, the victims of social people who do not benefit from social protection or
exclusion; have only a very inadequate level of protection;
— means-tested housing benefits paid to persons whose
2.1.4. the ‘cost’ to the productive apparatus of the level of income is such that it does not enable them
loss of production caused by under-employment and the or their families to live in decent housing conditions;
low level of purchasing power of poor people; there are the provision of accommodation for deprived
two ways in which attempts can be made to calculate persons or homeless persons; the provision of
C 284/34 EN Official Journal of the European Communities 14.9.98

shelters for young people in difficulty; the provision estimated that in 1994 the cost to the public purse of
of shelters and hospices for elderly people who have providing allowances for the long-term unemployed,
no income or savings; social assistance, and various forms of care and therapy
— additional schooling for children from deprived amounted to approximately DM 70 billion (or some
areas or backgrounds; literacy courses; rehabilitation ECU 37 billion).
programmes for young people who are in difficulty;
— price reductions or free access to certain services A further general indication is provided by the fact that
provided by the community: transport, meals, at the beginning of 1997 the French Ministry for Social
heating, information, recreation, cultural services, Affairs announced that it would be earmarking FF 126
etc.; billion (ECU 19,5 billion) for measures to combat
— the payment of social workers caring for: poor poverty and social exclusion in the course of that year.
people in all age groups; young people experiencing That figure was boosted by expenditure by local
difficulties; the long-term unemployed; etc.; invest- authorities which was of the order of FF 40 billion (ECU
ments and the operating costs in respect of the 6 billion).
departments employing these social workers;
— operating costs for measures to prevent and curb 2.4. An alternative basis on which to assess the costs
certain crimes, the causes of which can be attributed of measures to combat poverty is to carry out surveys
to poverty; these measures include treatment for of household sources of income. In 1993 Eurostat carried
alcoholism and drug addiction linked to poverty. out a survey based on a panel of EU households; the
information which this survey provided on the number
2.3.1. These benefits go under different names in the of poor people has been used in of this opinion. The
various Member States. The above reference list is not French Ministry for Social Affairs has endeavoured to
absolutely exhaustive but it nevertheless covers a broad utilize the data in this survey relating to the income of
area. Our goal is to ascertain, through reference to the poor households in France; the findings are set out
accounts of the bodies responsible for distributing below, solely by way of an example.
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 2.4.1. Surveys of households tend to have a number
be made of the proportion of the benefits which actually of weaknesses, such as the risk of under-assessing income
do go to poor people. in the case of rich households (or households described
as ‘not poor’) and poor households. Poor households
2.3.2. One of the weaknesses of this method lies in may, despite the diligence of survey workers in helping
the fact that aid is often directed towards individuals them to provide objective answers, be tempted to keep
rather than households; the situation may thus arise that quiet about the existence of certain sources of income
a person in receipt of a given benefit may in fact be for fear of losing that income, particularly in the case of
living in a household which is not poor. It is therefore means-tested benefits. This stance is based more on fear
possible that the overall cost of the benefits listed above than a desire to defraud.
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. A further source of under-assessment — for which this
time the households taking part in the survey cannot be
2.3.3. A questionnaire covering, to all intents and held responsible — is linked to the deliberate disregard
purposes, all of the abovementioned costs has been by the survey of healthcare ‘in kind’. Another area not
forwarded to members of the ESC study group, with the taken into account is the costs resulting not from the
request that they endeavour to obtain the information payment of welfare benefits to households themselves
concerned from the competent bodies in their respective but rather from, for example, the salaries paid to social
countries. Replies have been received in respect of workers and teachers or costs linked to the provision of
Austria, Belgium, Spain, France, Germany, Greece, Italy free, or reduced cost, access to certain services provided
and the UK. Information, sometimes very comprehen- by the community (e.g. transport and meals).
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 2.4.2. An additional drawback of direct surveys of
social protection measures. In most cases, however, it ‘ordinary’ households is the imperfect picture which
turned out to be almost impossible to identify the they provide of the situation of those who are at the
proportion of the allowances and benefits concerned ‘bottom of the heap’. In the case of the survey under
paid exclusively to poor people. If reliable figures are to review, the persons carrying out the survey found it very
be obtained in this respect, long, painstaking, specific difficult to question people belonging to the social
research would be necessary involving a large number groups hardest hit by poverty who are not only poor
of institutions and requiring a considerable amount of but also victims of social exclusion (1). For this reason,
coordination in each of the respective countries. in connection with its report on poverty which was to

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 (1) The survey did not cover, for example, poor people resident
by Dr Rudolf Martens in Germany. Dr Martens who 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 Turning to the question of appeals to public generosity,
Economic and Social Council was obliged to commission these are generally more effective with regard to help in
the Centre for Research and Documentation on Living combating certain illnesses (such as cancer, myopathy
Conditions (CREDOC), to carry out a special survey of and AIDS) than in drives to combat poverty; in the latter
a sample of persons living at the ‘sharp end’ of poverty. 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
2.4.3. In the analysis of the data in the Eurostat combat underdevelopment in countries situated in other
survey, the poverty threshold was set at half the median continents and the amount spent on helping poor people
household income per unit of consumption. On the basis in Europe.
of this criterion 11 % of French households were
considered to be poor in 1993, as against 16 % on the 2.4.7. The Committee urges that account be taken of
basis of a poverty threshold set at half the average transfer payments made between family members and
income. 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
The reference basis for calculating units of consumption role in preventing poverty and helping to combat
was the Eurostat scale. The use of this scale gives a worsening poverty. In a study carried out four years ago
slightly increased figure for the percentage of poor the INSEE estimated that the sums involved in transfer
households in France as against the figure obtained payments between family members amounted to FF 140
using the Oxford scale (10 % instead of 9,6 %) but the billion (ECU 23 billion approx.). 80 % of these payments
figure for the number of poor individuals is reduced are made by older persons to young persons and 20 %
(9 % instead of 10,4 %). in the opposite direction. It would be useful to have this
type of information for each Member State.

2.4.4. Using the abovementioned criteria, the author 2.5. It is more difficult to determine the cost of
of the study carried out by the French Ministry for preventive measures than the cost of direct aid to people
Social Affairs found that income from welfare payments who are poor here and now and the cost of other help
received by poor people in 1993 totalled — if we required to alleviate the present situation of these people.
rely strictly on the data provided by the households If we are to calculate the cost of preventive measures,
questioned in the Eurostat survey — FF 63 billion, or we need to determine what proportion of the allowances
slightly less than ECU 10 billion. The total figure does, designed to (a) partially offset the expenses incurred by
however, rise to approximately FF 130 billion (ECU families, (b) fund health expenditure (e.g. measures to
20 billion) if we (a) correct the total to take account of safeguard the health of mothers and children) and (c)
the effects of under-assessment, which involves crediting make payments to particular categories of pensioners,
to each household the benefits which it did not declare should be regarded as serving to prevent poverty and
despite the fact that it doubtlessly received them, given social exclusion. We should also endeavour to calculate
the rights enjoyed by households and the current the percentage of total expenditure on basic training
practices pursued by the administrative bodies respon- and ongoing training which can be regarded as expendi-
sible for welfare payments, and (b) supplement the ture on preventing poverty and social exclusion. To
assessment by including in the calculations the costs of quote an example, should we classify as expenditure on
implementing measures to combat poverty not covered preventive measures the funding of all nursery schools
by the Eurostat survey. 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
2.4.5. If, instead of using the criteria adopted in the aware no such calculations have so far been made; it
abovementioned analysis of the recent Eurostat survey, would be no easy task to make them.
we use the criteria of half the average income rather
than half the median income and if we use the ‘Oxford’ 2.6. A third area of study to which very little attention
scale, rather than the new scale, the total income from has been paid is the measurement of the cost of the last
welfare payments currently received by poor people two elements of the cost of poverty, namely the loss of
amounts to FF 115 billion (if we rely strictly on the data tax revenue and social security contributions and the
supplied by the households questioned in the survey). If loss of production as a result of the lower level of
we correct the figure to take account of the effect of consumption by poor households.
under-assessment the estimated total could be between
FF 180 and 200 billion (approximately ECU 30 billion). 2.6.1. In the study on the situation in Germany carried
out by Dr Rudolf Martens it is estimated that in 1995
the shortfall in the public sector budget caused by the
2.4.6. It will be noted that account has not been taken loss of tax revenue and social security contributions due
of the cost of help provided to people in need by private to the number of persons officially recorded as being
associations and bodies. At the present time too little unemployed amounted to DM 65 billion (ECU 35 bil-
statistical information is available to enable an overall lion); this shortfall was approximately evenly divided
assessment to be made of this cost. In view of the between the loss of tax revenue and the loss social
important social role played by these bodies, it would security contributions. If we equate poor people with
be a useful exercise to question these bodies at local only the long-term unemployed, the loss of tax revenue
level. and social security contributions brought about
C 284/36 EN Official Journal of the European Communities 14.9.98

by unemployment amongst poor people would be 1.1. The EU seeks to constitute a strong political,
DM 13 billion (ECU 7 billion), assuming that when economic, social and cultural entity; it does, however,
calculating the loss of tax income and social security wish to avoid being ‘dominating’ since it is a body
contributions, the figures in respect of long-term unem- founded on the principals of humanism and democracy
ployed persons are based on those of an ‘average and therefore dedicated to respecting basic human rights.
unemployed person’.
Is it not a fact that in any democratic society the goal of
2.6.2. Turning to the production shortfall brought all activity is to improve living conditions, promote
about by unemployment, the German Labour Market the common good by seeking to bring about fair
and Employment Research Institute (IAB) has estimated improvements, based on freedom and responsibility,
that (1) the figure for the Federal Republic of Germany bearing in mind that, in the interests of justice, solidarity
in 1987 amounted to DM 190 billion (ECU 92 billion); and respect for human dignity, priority has to be given
this figure was based on the total number of unemployed to concern for the most vulnerable?
persons calculated by the IAB, which included persons
both officially registered as unemployed and those not
officially registered. For the purposes of the calculations 1.2. We are duty bound to opt for the second of the
it is assumed that each unemployed person has a notional two alternatives proposed by Commissioner Flynn;
productivity equivalent on average to 75 % of the failure to do so would constitute a breach of faith with
productivity of persons actually in gainful employment. the founders of the EU and would be tantamount
We are dealing here, however, with unemployed persons to rejecting the principals underlying the Universal
as a whole and not just those unemployed persons who Declaration of Human Rights.
may be classified as ‘poor’. If we venture to estimate
that the latter category comprises a fifth of the overall 2. In the light of the situation as regards poverty and
number of unemployed persons — be they registered or social exclusion we have to recognize that we have failed
not — the production shortfall caused by unemployment in this respect; whilst we have perhaps failed in respect
would be of the order of DM 38 billion (ECU 18 billion). of some policies, the chief failure has been in observing
human rights.
2.6.3. The value of the shortfall in social security con-
tributions in France brought about by unemployment in Whether the number of poor people amounts to 40 mil-
1991 has been estimated at FF 138 billion (ECU lion or 60 million — which does of course represent a
21 billion) (2). The following estimates have been made considerable difference from an arithmetical point of
for loss of tax income: (a) loss of income tax revenue — FF view and it is the victims of misfortune and poverty who
25 billion (ECU 3,8 billion) and (b) loss of VAT revenue can best testify to this — the offence to human dignity
— FF 14 billion (brought about by a shortfall in the level is essentially equally as grave, from a moral and civic
of consumption), which amounts to an overall shortfall standpoint, bearing in mind the ethical requirements
of FF 39 billion (ECU 6 billion). Bearing in mind that not and standards which should be met by a society founded
all unemployed persons may be classified as ‘poor’, the on moral principles.
proportion of the overall number of unemployed persons
who may be classified as ‘poor’ has been estimated at 2.1. Depending on the reference criteria used, at least
25 % for the purposes of these calculations. This figure one person in nine in the EU is poor, according to the
probably represents a minimum proportion. These statistical data.
people generally earn less than half the average wage. On
thebasisofthesetwocriteriatheshortfallinsocialsecurity The total number of victims of social exclusion is
contributions alone for 1991 could be estimated at some estimated to be around 4 million people.
FF 25 billion (ECU 3,9 billion approx.).
2.6.4. The two above-mentioned case studies In the age group up to 16, one child in five lives in a
— referring to the situations in Germany and France poor household.
are intended to serve only as specific examples; no
conclusions, or, more importantly, no generalization And yet, taken overall, our society is highly developed
should be made in respect of the other Member States and our culture is founded on lasting humanitarian
on the basis of these examples. values.

Can we be content with the situation whilst there is even
VI. CONCLUSIONS: DO WE WANT AN EU one human being who has been deprived of his dignity?
WHICH WORKS TO PROMOTE THE INTERESTS
OF MANY OF ITS CITIZENS OR AN EU WORKING 2.2. There are significant differences in the level of
ON BEHALF OF EVERYONE? poverty between the individual EU states. If we are to
1. In posing this concise question EC Commissioner achieve a higher level of solidarity between the peoples
Pádraig Flynn got to the heart of the matter. This is an of the EU, the requisite Community measures will have
issue which transcends the field of the prevention and to be consolidated.
treatment of poverty, however important these issues
may be. 2.3. If this goal is to be achieved, there will have to
be a stronger political will amongst the citizens of each
(1) Figures taken from a document provided by Dr Martens. of the Member States to transcend the narrow, secure
(2) Initial general review drawn up by the French Ministry for area of our own immediate personal and group interests
Employment — 16 November 1994. 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 whose expertise should be valued more highly and more
delay against both the manifestations of poverty and fully recognized than is sometimes the case at present;
social exclusion and also against the causes of these
phenomena. Any procrastination would be harmful to
4.7. victims of social exclusion should be given a
the victims of poverty; it would also damage the image
collective voice; to this end they should be helped, by
and cohesion of the EU. Who would be prepared to take
organizations which they readily regard as sympathetic.
such risks?
Victims of social exclusion could in this way regain or
find freedom by learning how to stand on their own two
2.5. The Committee endorses the desire expressed by feet, which is one of the fundamental aspects of
the European Council in the appendices to the Treaties citizenship.
of Maastricht and Amsterdam to make measures to
combat social exclusion one of the goals of EU social
policy. 5. In addition to pursuing measures designed to
improve the living conditions of poor people and victims
3. The Committee would welcome the introduction of social exclusions, there is a need, at the same time, to
of procedures which would enable us to gain an accurate step up work in the field of the prevention of poverty.
picture of both poverty and social exclusion. Detailed,
specific studies should be made out of the situation in 5.1. Measures to combat unemployment are of prime
each of the EU Member States; these studies should be importance to the prevention and treatment of poverty,
updated in the light of national surveys. The studies a fact which the ESC is constantly emphasizing. Admit-
should be drawn up in accordance with rules laid down tedly not all unemployed persons are financially poor
in agreement with the EU authorities so as to ensure but many, if not all, are psychologically, socially and
statistical conformity. If successful action is to be taken emotionally damaged. Unemployment — and especially
to tackle poverty, the situation needs to be analyzed in long-term unemployment — invariably brings a deterio-
a reliable, objective way. ration in the living conditions, and hence the quality of
life, of a large number of households. No-one would
4. This necessary improvement in the understanding refuse to give their active support to the drive against
of the situation should be backed up by an interactive unemployment given the risks which this phenomenon
drive to educate all those involved in providing social poses for human beings. The right to have a real job is
assistance. To this end action needs to be stepped up in a fundamental right.
the following areas:

4.1. the ‘poverty and social exclusion dimension’ 5.2. Upstream measures are necessary to prevent
should be brought into all debates and policy statements, poverty; such measures need to be taken by society as a
at both national and EU level, in the following fields: whole in the fields of education and training. It is vital
politics, education, training, information, employment, to provide people with a general education which paves
health protection and social welfare, housing, access to the way to language skills (reading, writing, speaking,
healthcare, development of new technology, etc.; mathematical skills, etc.) and initial and ongoing
vocational training. The ESC has always attached
4.2. the development of courses in civics and an considerable importance to these matters.
understanding of ethical values, with a view to increasing
respect for all people and social groups, particularly the 5.3. Help with the parental roles of educating and
most vulnerable and all those whom misfortune, fate or looking after children and young people (e.g. through
circumstances have been made different from their the provision of high-grade child-care systems) are also
fellow citizens; key factors in promoting social integration and the
teaching of responsibility, thereby helping to prevent
4.3. training should be provided for social workers, marginalization. One of the goals of family policies and
teachers, healthcare workers, magistrates, members of education is to enable families and teachers fully to
police forces, etc. in how to make contact with, receive carry out their roles and meet their responsibilities.
and help people belonging to poor and vulnerable social
groups;
5.4. Measures to strengthen housing policy — in
4.4. the exchange of experience between Member particular social housing policy — and to monitor the
States and bodies engaged in combating poverty; health of the most vulnerable members of society are
very important factors in preventing poverty and social
4.5. emphasizing the role of ‘social dialogue’ as a exclusion.
highly pro-active means of ensuring respect for human
dignity and promoting human dignity; 6. The role played by the EU institutions is more
significant than would at first sight appear to be the
4.6. proper recognition and real help needs to be case. They are for example involved in specific measures
given to social bodies, charitable associations and all to combat poverty and social exclusion and other
organizations engaged in combating poverty; this should contributory measures enacted in the fields of employ-
lead to the provision of practical support for unpaid ment, housing, education, public health, family life,
workers by, for example, providing training for volun- young people, etc. The public should therefore be better
teers. The work of volunteers provides a vital back-up informed of this role, particularly in view of the fact
to the work of professional social workers and teachers, 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 All this represents a vicious circle, which it should be
support for economic activities. possible to break. The social dialogue helps to set out
fair and realistic lines of approach; this dialogue needs
7. The drive to combat poverty and social exclusion to be strengthened.
justifiably hinges on solidarity. Is it not the case that, at
times, the progress of developed societies — and 9.2. If we are to provide effective assistance to those
consequently the progress of society in the EU — over people who are currently poor and victims of social
the last 15 years has, to a greater or lesser extent, been exclusion and if we are to prevent their numbers from
marked by promotion of the interests of the strongest increasing in future, we will need resolutely to pursue
members of society, which has sometimes led to a an economic policy of promoting internal growth. This
deterioration in the situation of the less well-off and the policy should take account of the need to find the
disregard for the weakest members of society? As a optimum way of meeting the needs of households whose
result the rich are getting richer and the poor are requirements have been the least well met in the past,
becoming both poorer and more numerous. namely social groups on low or average incomes. This
objective is ultimately in the interests of everyone,
Is it not also a fact that a number of political decisions including those who belong to prosperous social groups.
and decisions in other fields are tending increasingly to
lead, inter alia, to a gradual reduction in the level of 10. Highlighting the vital importance of growth does
social expenditure, whilst at the same time passing on not by any means imply a failure to recognize the need
to private solidarity bodies responsibilities formerly met for social support in all its various forms. These two
by community solidarity? The pretext sometimes given measures go hand in hand. Commissioner Pádraig Flynn
for such decisions is that they seek to give maximum echoed this view when he pointed out that: ‘Economic
leeway to market forces believing, no doubt in good growth and progress in the EU Member States constitute
faith, that this is the best way to safeguard business a prerequisite for social cohesion but these are clearly
competitiveness, which is a necessary factor for combat- not the only prerequisites.’
ing unemployment and, by extension, a decisive factor
in preventing poverty. Can we, however, develop a Commissioner Flynn rightly calls for a policy of pro-
society which gives real freedom to everybody in a viding back-up services, otherwise ‘the process of estab-
‘universe’ in which a large number of people suffer lishing an ever closer union between the peoples of
insecurity and injustice? The answer is clearly no. Europe will remain nothing more than a dream’. The
ESC fully shares this view.
8. The challenges posed to all decision-makers and
members of the public by the increase in poverty and 11. All public and private bodies need to combine
social exclusion do, however, call for a response based their efforts, otherwise the gap between rich and poor
on something more than merely providing assistance. is very likely to increase. Society in the EU would thus
Such measures represent just one part — which should move faster towards a form of dualism which would
be of only a temporary nature — of an overall policy increase tensions within individual EU Member States,
aimed at achieving economic and social progress. Regret- within the EU itself and in the world at large. Everyone
tably, there is an increasingly large number of both has to be taught to realize that they have an ongoing
individuals in all age groups and families for whom responsibility for the construction of a fair and harmoni-
welfare payments represent virtually the only regular ous society.
sources of income.
The Committee therefore refuses to accept that poverty is
8.1. Whilst we clearly have to throw out a lifeline to an inescapable phenomenon, representing a consequence
people who can no longer keep their heads above water, of, if not to say a precondition for, a ‘future society’ no
social policy must not, however, represent only a sort longer capable of reconciling its tremendous capacity
of first aid station responsible for offsetting and patching for scientific and technological progress with a respect
up strategic and political mistakes and errors in eco- for the ethical values which it so ardently espouses. Poor
nomic, social and education policy. Social policy does people must not always have to pay the price for
indeed have to provide protection and compensation economic progress which benefits only a fraction of
but it also has to seek to promote the rights and duties society.
of all individuals and of society as a whole.
12. There is a high price to be paid for poverty and
9. Helping the poor by taking from the ‘less poor’ is social exclusion and it is primarily the victims of these
not the right approach. This would be both unfair and phenomena who have to pay the price, even though they
ineffective. are very often not responsible for their plight.

9.1. The provision of welfare assistance to combat A high price also has to be paid, however, by the
poverty is undoubtedly an expensive business but it has Member States, the EU and consequently also by
to be recognized that this cost can, to a large extent, be members of the public in their capacity as tax-payers.
laid at the door of an inadequate level of growth. This,
in turn, is a result of insufficient internal demand, The economy is therefore penalized.
particularly from those social groups which have the
highest level of unsatisfied needs but who are at the 13. We need to be aware of all these costs. Sticking
same time least able to pay their way. The number of one’s head in the sand has been shown in many fields as
people in this social group is also tending to increase. 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 or their children, either now or perhaps in the future,
benefits. No poor person wants to continue to live in nor can they fail to be concerned about the future of
poverty. The solution thus lies in a fair and realistic society in the various Member States and the protection
shared responsibility for the prerequisites for develop- and promotion of the values which they espouse.
ment and a fair and realistic allocation of the fruits of
development. 15. The Committee made the same observations in
1989 in its information report. The above observations
14. The ESC urges that the proposals outlined in do not imply that nothing has been done in the meantime
this opinion be implemented without delay. Initial — far from it — what they do imply, however, is that
assessments — admittedly very limited — demonstrate, the situation has worsened and that resolute, realistic
if proof were needed, that poverty represents a serious policies, based on consensus, are needed to tackle it.
social and economic problem, quite apart from the
ethical, moral and civic aspects of this issue. Everyone This is an issue which fully concerns every single one of
is involved. No-one can be unconcerned for themselves 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 Sánchez
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 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
1.1. The use of modern biotechnology in agriculture is unknown, but thought to be considerable. It is
offers new solutions which are, at first sight, guarantee- calculated that worldwide, 60 million hectares will be
ing yields, helping to cut the use of plant health products under this form of cultivation by the year 2000, only
in combating pests and diseases, and creating quality 1 % of which will be in Europe.
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 1.2. This opinion sets out to adopt a flexible position
application to the plant sector. Meanwhile, genetically which, nevertheless, constantly takes account of all
modified produce from non-EU countries, the US in those concerned, farmers, consumers and agro-industry,
particular, is being marketed. 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
1.1.1. According to estimates for 1998, transgenic product prices, with a view to the possible impact of
plants occupy 30 million hectares of cultivated land their widespread presence on the international market.