In this episode, Real Economy looks at what impact the coronavirus crisis is having on Europe's most vulnerable, and what the European Union is doing to help them.
The COVID-19 pandemic is expected to increase the number of deprived people, and make it harder for those who are already struggling. But what defines a severely deprived person in Europe, and which countries and groups are most affected at the moment.
The lives of the poorest people in Europe are severely constrained by a lack of resources. Often they cannot afford to:
- pay rent or basic utility bills.
- keep their homes warm enough.
- eat good quality food, like fish and meat.
- go for a week's holiday.
- run a car, own a washing machine or colour TV.
- pay for a telephone.
In 2019, 5.6% of the EU’s population found themselves in this situation. That's around 24 million people.
It's predicted the coronavirus pandemic will significantly increase the number of deprived people in Europe. This risk is especially high for young people, those with low levels of education, and single parent families, especially those headed by women.
Bulgaria (19,9%), Greece (15,9%) and Romania (12,6%) had the highest levels of severe deprivation in the EU last year.
What is the FEAD?
The Fund for European Aid to the Most Deprived (FEAD) was set up to provide €3.8 billion of EU funding for food or basic material assistance support to the most disadvantaged groups in Europe through meals, food packages or other basic consumer items such as school supplies and toiletries.
Poverty in Portugal
Portugal has struggled with financial crisis for years. The country already has more than 2 million people at risk of poverty or social exclusion. The concern now is that the coronavirus pandemic will only make this situation worse.
The food bank run by the association Casa da Misericordia in Lisbon is attempting to adapt to the new reality imposed by the coronavirus crisis. Despite the current health measures, they continue to distribute food baskets to the most disadvantaged.
Each month, 1,200 families benefit. People like Sandra, an accountant by trade but now without work for a year. She survives on welfare (social integration income) and food aid provided by Casa da Misericordia.
The food baskets like Sandra receives are funded by the European FEAD fund - in Portugal, that’s €177 million for food and material assistance. Associations that distribute them can also use this money to buy protective equipment.
Unemployment set to double
The IMF predicts that the unemployment rate in Portugal will double in 2020 - representing tens of thousands of jobs. As a result demand for food aid is expected to increase dramatically. At Casa da Misericordia, they have already seen a rise of 15%. Workers with low wages in precarious jobs are the most affected.
Susana Veiga Ferreira, a coordinator at Santa Casa da Misericordia de Lisboa said: "We anticipate that there could be a rise in demand for food products by about 50%. We are in an adjustment phase right now and we’re having to adapt in terms of logistics, as well as check storage availability. Casa da Misericordia has a great estate, the European funding is also a very useful source of income to complement this financial help which belongs to everyone."
Real Economy interview: Dr Maria Joao Rodriguez
Maria Joao Rodriguez is the President of the Foundation for European Progressive Studies. Real Economy's Efi Koutsokosta spoke with her about some of the measures Europe is putting in place to protect the poor.
Efi Koutsokosta: "The recession is already here and the most vulnerable groups and the most affected of course are the youngest people or single parents. What kind of measures can the EU take in the short-term and long-term so that everybody is protected?"
Maria Joao Rodrigues: "Let me focus on the target groups, you refer to young people. Many of them have jobs, the precarious jobs. So we need to make sure that the contract, the short-term contract they have should be extended overtime. Then you also referred to single parents. They are confronting the dilemma either to go to job and to leave their children at home, or their children in schools which are not safe enough, or they keep at home with their children and they lose their salary and their jobs. We need to extend layoff schemes for all the single parents to make sure that they are not confronted with this terrible dilemma."
Efi Koutsokosta: "What about the thousands of undocumented or seasonal workers who don't have the paperwork to apply for unemployment benefits. How should they be protected?"
Maria Joao Rodrigues: "Let me refer to a smart measure launched in Portugal, which was to offer these people the possibility for them to register themselves, to benefit from social rights. Like that, we can turn informal work without rights, into formal work with rights. And I see this is a win win, because these workers will benefit from this. Secondly, public systems would also benefit because once these workers are formal, then they will also start paying their normal taxes and contributions for social protection."
Efi Koutsokosta: "How could deprived people benefit from the Recovery Fund currently being debated?"
Maria Joao Rodrigues: "We need to make sure that SMEs particularly, are directly supported with the financial means to survive and to relaunch their activities. And finally, we need to make sure that minimum income schemes will work everywhere to make sure that everybody will be protected from falling into poverty. These kinds of support can only work if it involves not only loans, but grants. I think the historical moment has come where Europeans need to decide."