Table 3: Overcoming inequalities: investing in a more sustainable Europe

This page is also available in

Among the threats Europe is facing, growing inequalities is the one that must receive the highest political consideration as it at the core of Europe stability and cohesion. Mounting inequalities feed from political, economic, social and ecological crises. The state of inequality in Europe is appalling and cases of social unrest are multiplying, highlighting the lack of proper governmental responses.

A worrying trend

Not only are inequalities on the rise in Europe, but Europe's position does not even compare well with a country that is traditionally depicted as not being "social", i.e. the USA. If we take the EU as a country, income inequalities are higher in the EU than in the US. Wealth is even more unequally distributed than income. The gender pay gap is slightly higher in the EU than in the US. Upward intergenerational social class mobility is higher in the US than in most of the EU countries. The amount of working poor affects almost 10% of European workers, a 15% increase since 2010. The number of young people neither in employment, education, nor training is still above its 2008 level. Over one fifth of adults and nearly one third of children and young people are at risk of poverty (AROPE), millions of young people cannot find a job to start shaping their adult life, and more than half of adult Europeans believe that younger generations will have a life worse than their own. More than one third of Europeans live in financial insecurity, a 5% increase in the period 2008-2013. Almost 10% of Europeans are unable to keep their house adequately warm and are affected by food insecurity. Almost two out of ten Europeans do not have enough space to live. Lower socio-economic groups are disproportionately exposed to environmental health hazards, such as air pollution, noise and extreme temperatures. Etc.

Actions framed by the 2030 Sustainable Development Agenda

Combating growing inequalities in Europe has to be inspired by the 2030 Sustainable Development (SD) Agenda adopted by all countries in the United Nations in 2015. This visionary agenda made up of 17 Sustainable Development Goals (SDGs) has still not been fully and clearly incorporated into European policy. The Reflection Paper on "Towards a Sustainable Europe by 2030" that was adopted by the European Commission on 30 January 2019 limits itself to sketch possible scenarios to take up the SD challenge at EU and country policy level.

The subject of inequality appears throughout the 2030 SD Agenda, both directly and indirectly. Given the numerous forms in which inequality can manifest itself —lack of human, social, economic and environmental rights —, it is apparent that inequality is and has to be addressed across the full spectrum of the SDGs. Many goals and targets are linked to inequality in one form or another. The 2030 SD Agenda should therefore be used as the guiding framework to address the many dimensions of inequality in Europe, building upon the existing instruments such as the European Pillar of Social Rights (EPSR) proclaimed by the EU in November 2017. The pillar is about delivering new and more effective rights for all citizens on the basis of 20 key principles structured around three categories: i) equal opportunities and access to the labour market, ii) fair working conditions, and iii) social protection and inclusion for all.

The value of defining measures and policies through the multidimensional lens of the 2030 SD Agenda is undeniable. Recent events in France and Belgium have demonstrated the strong interconnection between the social and the climate crises. The much needed climate-friendly measures cannot be imposed in the same way to all people in our society. Those who are already socially and economically disadvantaged won't be able to understand, accept and endorse policy measures leading to e.g. price increases of essential commodities such as energy. The voices calling for climate justice are becoming louder and clearer.

A fair repartition of the burden is the first step to ensure the largest public support to these "societal measures". It is furthermore essential to develop ways to bring the least favoured on board by offering them concrete opportunities to gain from the needed transformation. Public subsidies could for example be directed in priority to refurbish the homes of poor households in order for them to reduce their energy bill. Investments in education and training (formal education but also lifelong learning, vocational education and training, etc.) are also essential to facilitate social mobility and lift people out of social exclusion as well as adapt to the ecological transition. More generally, the entire spectrum of policies in support of the ecological transition could be reviewed to increase the interest and the benefits of the ones in high need.

The discussion on fair burden distribution would not be complete without addressing the question of taxation and its impacts on growth and equity.  Rethinking the European fiscal system in a coherent way will be necessary to address the SDGs, including those goals that refer to equality and fairness, both in Europe, by introducing progressive taxation and ensuring that regressive taxes do not fall on the consumption of goods and services that make up a larger share of the budgets of poorer households, and internationally, by establishing a fair and efficient system of international taxation, including efforts to fight tax avoidance and tax evasion.

A new, enlarged vision to fight inequalities

Reflecting on ways to reduce inequalities in the wide context of the 2030 SD Agenda enlarges the vision, develops cross-policy creativity and multiplies the set of opportunities. Inequalities cannot continue to be addressed via the narrow scope of traditional sectoral policies. Helping people to pay for the energy bill of their homes cannot be done via social tariffs only. The "SDG vision" reveals that social tariffs are providing a necessary help to the poorest but they aren't an incentive to moderate energy consumption. In other words, the social gain aimed at by social tariffs can potentially be offset by environmental losses caused by increased energy consumption. This example shows the need to couple issues and to try to design policies that optimise benefits across the 17 SDGs.

To be more effective in combatting inequalities calls for a radically different, integrated and progressive approach based on a reformed European governance guided by an ambitious EU SD Strategy. Policies and actions targeted at re-shaping our economies must be combined with a range of policies that specifically target poverty and excessive inequalities linked to gender, income, wealth, origin and place of residence. Achieving social justice is fundamental to our societies, where "no one should be left behind". Actions must be deployed in the fight against poverty and social exclusion. These must primarily consist of ensuring decent work and decent income for everyone, real social mobility, full gender equality, specific support to vulnerable groups, and a radically ambitious and renewed approach to territorial inequalities.

One of the most emblematic EESC demands relating to inequalities concerns decent (or adequate) minimum income. This tool would be a significant response to the serious and persistent problem of poverty in Europe, as it would help reintegrating people who have been excluded from the labour market and also combat in-work poverty. Minimum income must be tailored to the standard of living of each country. This requires establishing "reference budgets" containing a list of goods and services that families of specific sizes and compositions need to be able to live at a designated level of well-being, along with the estimated associated monthly or annual costs.

Another powerful tool to counter economic inequality, poverty and social exclusion is social investment. Investment in the welfare state not only brings social progress but is also worthwhile in economic and fiscal terms. Failing to act in the social sphere has a high cost, often much higher than the needed investment. The EESC has shown the multiple positive effects of social investment, particularly for the labour market and public finances, in the following areas: social services and childcare; education and tackling youth unemployment; employment fostering; promotion of good health and active ageing; construction of social housing and a barrier-free society; social entrepreneurship, etc.

Let's act!

The future of the EU is at stake. Its image in the public could be dramatically improved if it succeeds to put in place a robust and coherent framework of policies and measures to tackle inequalities. To be truly effective these policies and measures must be anchored onto the multi-dimensional framework constituted by the 17 SDGs. Social justice and fairness are at the core of the sustainable Europe we want.

Questions to steer the debate

  • What are the most pressing inequalities that you feel require urgent action at EU level?
  • What are the pros and cons of fighting inequalities by adopting integrated approaches in line with the 17 SDGs? Are there any concrete examples of successful approaches?
  • How do you see the role of the European Pillar of Social Rights in a comprehensive multi-policy approach in connection with the 2030 SD Agenda?
  •  What are the most concrete proposals of actions for overcoming inequalities that should be asked to the next EC and EP?

Possible conclusions

  1. There is an urgent need to take action to reduce inequalities: A continuing deterioration in social conditions, fuelled by rising inequalities and growing insecurity - not least in those regions across Europe that are lagging behind, in rural areas, and in and around our urban centres - could present serious systemic risks, channelling more electoral support to authoritarian populist and extremist parties.
  2. There are inequalities of many kinds and they are all in their own right very important for combatting: the absence of decent minimum income, unfair and inequitable taxation, youth unemployment and the gender pay gap, the lack of access to education, overlapping environmental and social inequalities, local access to care services and inequalities deriving from EU internal migration (brain drain), amongst other things. Another way to express this is to say that there are inequalities in access to, for example, five Services of General Interest: health, education, energy, transport and digital services. There is also a need to distinguish between accessibility to services and the affordability of services.
  3. Today's growth system - solely based on GDP - is one of the main causes of inequality. A different kind of growth is needed, based on well-being and equal emphasis on the three interrelated social, economic and environmental pillars. This means that a PARADIGM SHIFT is required.
  4. The value of defining measures and policies through the multidimensional lens of the 2030 SD Agenda is undeniable. Recent events in France and Belgium have demonstrated the strong interconnection between the two crises, social and climate. An overall approach based on the 2030 SD is therefore needed. As part of this overall approach there needs to an alignment of existing EU instruments, such as the European Pillar of Social Rights and the European Semester, with the 2030 SD Agenda. Steps to overcome inequalities offer huge win-win opportunities if they are conceived and implemented by adopting an overall approach, in line with the SDGs. If we take balanced measures to reduce inequalities, a very different society can emerge: a society of sustainable equality, with well-being for everyone, economic prosperity, and social and ecological balance and peace, which leaves no person and no place behind.
  5. Our first request of the next EP and EC is for an EU strategy which is bold, integrated and ambitious. This EU strategy needs to be beefed up with a huge investment programme. We need to have the right kind of approach at EP level for sustainable development to be covered from a perspective that does not just relate to the environment and development. Social policies need to be at the core of decision-making and not limited to providing remedies and solutions to problems created elsewhere. We also concentrated on very practical proposals. Here are a couple that were discussed: subsidies for retrofitting houses (here again with manifold benefits for employment, energy saving, health, etc.) and for broadband.

"Sustainable equality – Well-being for everyone in a sustainable Europe" – Report of the independent commission for sustainable equality, November 2018