Download publication

Policy Brief

Europe’s social problem and its implications for economic growth

The European Union faces major social problems. More than six million jobs were lost from 2008-13 and poverty has increased. Fiscal consolidation has generally attempted to spare social protection from spending cuts, but the distribution of adjustment costs between the young and old has been uneven; a growing generational divide is evident, disadvantaging the young.

By: and Date: March 31, 2014

The European Union faces major social problems. More than six million jobs were lost from 2008-13 and poverty has increased. Fiscal consolidation has generally attempted to spare social protection from spending cuts, but the distribution of adjustment costs between the young and old has been uneven; a growing generational divide is evident, disadvantaging the young. The efficiency of the social security systems of EU countries varies widely. Countries with greater inequality tended to have higher household borrowing prior to the crisis resulting in more subdued consumption growth during the crisis. The resulting high private debt, high unemployment, poverty and more limited access to education undermine long-term growth and social and political stability.

Policymakers face three main challenges. First, addressing unemployment and poverty should remain a high priority not only for its own sake, but because these problems undermine public debt sustainability and growth. Second, bold policies in various areas are required. Most labour, social and fiscal policies are the responsibility of member states, requiring national reforms. But better coordination of demand management at European level is also necessary in order to create jobs. Third, tax/benefit systems should be reviewed for improved efficiency, inter- generational equity and fair burden sharing between the wealthy and poor.

Download Publication

Europe's social problem and its implications for economic growth

Policy Brief

Europe’s social problem and its implications for economic growth

16m read (8 pages)

Download publication

Topics

Tags

Comments

Read article Download PDF More on this topic

Blueprint

Blueprint

Measuring competitiveness in Europe: resource allocation, granularity and trade

This new Bruegel Blueprint provides a differentiated understanding of growth, productivity and competitiveness and the important role public policy needs to play.

By: Carlo Altomonte and Gábor Békés Topic: European Macroeconomics & Governance Date: January 28, 2016
Read article More on this topic More by this author

Opinion

Ashoka Mody

Greece: a European tragedy

Wrapped up in the details of pension reforms and home foreclosure—matters that, no doubt, have important consequences for many— the big picture has faded into the background. It is easy to forget how we got here, and where we are going.

By: Ashoka Mody Topic: European Macroeconomics & Governance Date: January 14, 2016
Read article More on this topic More by this author

Opinion

Guntram B. Wolff

The EU must confront the populist challenge in 2016

In France, the US and elsewhere, populist parties are growing in popularity. Such parties radically challenge the consensus of traditional parties and their representatives. This year traditional parties must give informed answers to the problems identified by populists.

By: Guntram B. Wolff Topic: European Macroeconomics & Governance Date: January 11, 2016
Read article More on this topic More by this author

Opinion

Ashoka Mody

Another slow year for the global economy

The factors that dragged down the global economy in 2015 will persist – and in some cases even intensify – in the new year.

By: Ashoka Mody Topic: Global Economics & Governance Date: January 5, 2016
Read article More on this topic

Opinion

Pia Hüttl
Guntram B. Wolff

The growing intergenerational divide in Europe

An aging Europe cannot afford to squander the skills and talents of its youth. With this in mind, addressing the emerging intergenerational divide should be a top policy priority.

By: Pia Hüttl and Guntram B. Wolff Topic: European Macroeconomics & Governance Date: December 16, 2015
Read article More on this topic More by this author

Blog Post

Pia Hüttl

Counting on the EU - public opinion on welfare state reforms

Many European citizens accept that the EU shapes domestic welfare states. Nearly half of respondents considered its most important role to be setting minimum standards, a survey that was part of the Vision Europe Summit has revealed.

By: Pia Hüttl Topic: European Macroeconomics & Governance Date: November 19, 2015
Read about event

Past Event

Past Event

Vision Europe Summit 2015

The theme of the Summit's first edition is “The Future of the Welfare State”.

Location: Berlin Date: November 17, 2015
Read article More on this topic More by this author

Blog Post

Jérémie Cohen-Setton

The persistence of slow growth

What’s at stake: The persistence of slow economic growth in the Great Recession has been puzzling. Two recent papers have tried to present a coherent framework for understanding this phenomenon. The first paper argues that we may have underestimated the importance of hysterisis effects. The second paper argues the global safe asset shortage cannot be resolved by lower world interest rates once we reach the zero lower bound. It is instead dissipated by a world recession that rebalances global asset markets.

By: Jérémie Cohen-Setton Topic: Global Economics & Governance Date: November 16, 2015
Read about event

Past Event

Past Event

Diversifying funding for growth in transition countries

Debt levels in transition economies have risen by 25% relative to GDP since the financial crisis, yet there is still a huge gap in growth-friendly investment. Which financial tools could offer the region the diversified funding needed to support convergence?

Speakers: Çağatay Bircan, Zsolt Darvas and Hans Peter Lankes Topic: Finance & Financial Regulation, Global Economics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: November 13, 2015
Read article Download PDF More on this topic

Policy Contribution

The growing intergenerational divide in Europe

The growing intergenerational divide in Europe

During seven years of economic crisis, the intergenerational income and wealth divide has increased in many European Union countries. This paper reviews the pension reforms implemented by several countries and it provides policy recommendations to address the intergenerational divide.

By: Pia Hüttl, Karen E. Wilson and Guntram B. Wolff Topic: European Macroeconomics & Governance Date: November 10, 2015
Read article More on this topic

Blog Post

Pia Hüttl
Guntram B. Wolff

Charting public opinion on the future of the welfare state

As part of the of the Vision Europe Summit, a survey was held between July and August 2015 to gauge public opinion on the welfare state after the crisis. The survey revealed citizens’ general confidence in the welfare state, as well as preferences regarding the welfare state’s future goals and financing. We discuss the results.

By: Pia Hüttl and Guntram B. Wolff Topic: European Macroeconomics & Governance Date: November 10, 2015
Read article More on this topic More by this author

Opinion

IMG_1985

Could Europe’s next growth locomotive be Made in Italy?

Important reforms put in place over the past months, combined with a conjunction of particularly supportive external factors, mean that Italy could indeed become the fastest growing large economy in the euro area in a not-too-distant future.

By: Alessio Terzi Topic: European Macroeconomics & Governance Date: October 27, 2015
Load more posts