Millions of Europeans live in poverty, but the concept of a comfortable income varies greatly from country to country.
According to Eurostat, 16.2% of Europe’s population is at risk of poverty in 2024. This ranges from 9.5% in the Czech Republic to 22.2% in Turkey and Northern Macedonia. In EU candidate countries, as well as in the Balkan and Eastern European states, the proportion of the population at risk of poverty is naturally higher. Among the large economies, the rate is also high in Spain (19.7%) and Italy (18.9%), while in France (15.9%) and Germany (15.5%) it is slightly below the EU average.
However, when comparing poverty thresholds across countries, living broke looks very different. The EU’s ‘risk of poverty’ indicator is the proportion of people whose median equivalent disposable income is below a certain threshold. This threshold is set at 60% of the national median income. However, Eurostat notes that this indicator does not measure wealth or actual poverty. Rather, it reflects low income compared to others in the same country, which does not necessarily mean a low standard of living.
The phenomenon of poverty in Moldova also has a different face and a different dimension. And the authorities have been fighting it for decades. The participants of the conference talked a lot and in different ways about how a successful strategy to fight poverty might look like by the time the country crosses the threshold of the EU. There were both banal – wage increases, social support – and economically verified recipes.
“Consilium” was not looking for final answers. There are none. But one answer to the question of how to overcome the lack of funds has long been available, and people are actively using it at the household level – labor and any other migration. As one of the speakers noted, “the solvency within the country is determined by the number of insolvent people who left”. However, this “national way” of fighting poverty has its own costs, which are becoming more and more evident – the depletion of human capital and productive forces, dependency, including at the state level, and a decline in the competitiveness of the country as a whole.
However, the experts have given a clear answer as to how the poverty reduction strategy may look like in the short term and in line with the country’s European integration aspirations. Of course, in accordance with what we can do in the current conditions of economic stagnation and what to take into account. And it is not at all a permanent increase in wages and social assistance, “not catching up” with labor productivity and inflationary income furnace.
Expert Marina Solovyova, for example, draws special attention to the quality of human capital, which is closely linked to the level of education in achieving a decent lifestyle. As for public policy, its necessity is seen in the creation of the very conditions for “increased competitiveness”. Both an individual and a community of vulnerable citizens – the infrastructure of education, other “basic means of production” for the comfortable existence and development of citizens in the developing economy.
And here, in the absence of sufficient resources and clear political will, the main role in overcoming income inequality may belong to fiscal policy. In other words, redistribution of these very incomes, as opposed to the policy of “catching-up”, which does not make the poor richer, and the middle class does not want to form. A return to a progressive scale of income taxation is the least that the state can do.
Prime Minister Alexandru Munteanu, who attended the event and did not even hear the speakers, was in the trend of progressive opinions on this topic. Trade union leaders, who are fighting to raise the minimum wage to the European range, heard from him a sobering argument – this will not eradicate poverty. It’s like an arms race. And the economy is not yet able to ensure their real growth. The moderate impact of real incomes on living standards and the growth of monetary poverty, especially among people with low levels of education, large families and pensioners is proof of this.
