A Cautionary Tale
The true cost of austerity and inequality in Europe
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European austerity programs have dismantled the mechanisms that reduce inequality and enable equitable growth.
With inequality and poverty on the rise, Europe is facing a lost decade. An additional 15 to 25 million people across Europe could face the prospect of living in poverty by 2025 if austerity measures continue. Oxfam knows this because it has seen it before.
The austerity programs bear a striking resemblance to the ruinous structural adjustment policies imposed on Latin America, South-East Asia, and sub-Saharan African in the 1980s and 1990s. These policies were a failure: a medicine that sought to cure the disease by killing the patient. They cannot be allowed to happen again.
Oxfam calls on the governments of Europe to turn away from austerity measures and instead choose a path of inclusive growth that delivers better outcomes for people, communities, and the environment.
"Oxfam's report, A Cautionary Tale: The true cost of austerity and inequality in Europe, makes an important contribution to assessing the high and long-lasting costs of these ill-conceived policies." - Professor Joseph Stiglitz
European governments must:
1. Invest in people and economic growth:
- prioritize an economic stimulus programme, promoting investments and capital spending;
- target employment creation;
- protect EU and member states’ overseas development aid budgets.
2. Invest in public services:
- guarantee public, universal, high-quality education for all;
- protect public, universal, high-quality health care and develop social protection systems that enable the most vulnerable to live with dignity and lift themselves out of poverty.
3. Strengthen institutional democracy:
- promote greater participation in democratic processes by all stakeholders;
- ensure greater transparency and accountability of political processes;
- improve workplace democracy, including better employee representation and opportunities for greater shared ownership.
4. Build fair tax systems:
- implement progressive taxation reforms, including a tax on wealth stocks and a Financial Transaction Tax;
- tackle tax avoidance and evasion, including transparency and exchange of financial information, new international tax rules listing tax havens.
Country case studies on austerity and inequality
To highlight the findings of this paper, we've prepared these country case studies:
Please share our little 'austerity' infographic: