Brussels, 12/09/2013 (Agence Europe) - Oxfam International warns of an imminent disaster of Europe having an extra 25 million people living in poverty (defined as less than 60% of average income) by 2025. In a report published on Thursday 12 September, Oxfam warns of the impact of the austerity policies in Europe, “creating divided countries and a divided continent, and entrenching poverty for a generation”.
To justify its claims, Oxfam makes use of a comment by Karl Marx that he who doesn't understand history is condemned to repeat it. Referring to the various IMF and World Bank bailouts of the 1980s and 1990s, the report, entitled “A cautionary tale: the true cost of austerity and inequality in Europe”, says that the return of this type of economic logic has had disastrous consequences by encouraging the slashing of social security budgets, spending on healthcare and education, unfair taxation and a reduction in workers' rights. “The European experience bears striking similarities to the structural adjustment policies imposed on Latin America, South-East Asia, and sub-Saharan Africa. These policies were a failure; a medicine that sought to cure the disease by killing the patient”.
The same historical comparisons were made a long time ago by someone known around the world who represents the 'New Keynesianism,' namely Joseph Stiglitz, Nobel Prize-winner for Economics, who backs the Oxfam report and wrote its introduction. He says the wave of economic austerity across Europe “is contributing to inequality that will make economic weakness longer-lived, and needlessly contributes to the suffering of the jobless and the poor for many years”.
Oxfam's report provides figures backing up its arguments. Its forecasts suggest that between 15 million and 25 million more Europeans will join the ranks of the poor by 2025 if the current austerity policy is continued. It will take from 10 to 25 years to reduce poverty to what it was in Europe before 2008. At the same time, Oxfam points out the irony of the advantages of austerity - some 10% of Europeans have seen their wealth rising under the current policies. Oxfam says this is directly due to austerity, because it encourages an unfair distribution of wealth. Is there a way out of this situation? Yes, says the director of Oxfam's European office, Natalia Alonso: “A new model of prosperity is possible. Investing in schools, hospitals, housing, research and technology, millions of Europeans could be put back to work and support a sustainable economy”. (JK/transl.fl)