Poverty among the wealthy: 17 per cent of the EU population at risk of poverty

According to Eurostat, the Luxembourg-based EU statistics office, 17 per cent or more than 80 million of the 500 million members of the European Union are at risk of poverty, with children and the elderly most threatened. Around the same number of EU citizens are also in danger of social exclusion on account of material deprivation. This means that more than 160 million people in the EU suffer from social problems.

According to Eurostat, the Luxembourg-based EU statistics office, 17 per cent or more than 80 million of the 500 million members of the European Union are at risk of poverty, with children and the elderly most threatened. Around the same number of EU citizens are also in danger of social exclusion on account of material deprivation. This means that more than 160 million people in the EU suffer from social problems.

Campaign to combat poverty

In 2008 some 17 per cent of the EU27 population were at risk of poverty. In Austria around 12 per cent or one million people came into this category. This means that the income of these people after social transfers was underneath the poverty threshold. Welfare payments considerably reduce the risk of poverty – by over two thirds in the case of Austria. Without these payments around 43 per cent of the people in Austria would be at risk of poverty. The highest at-risk rates in 2008 were recorded by Latvia (26%), Romania (23%), Bulgaria (21%), and Greece, Spain and Lithuania (20%). The lowest were the Czech Republic (9%), the Netherlands and Slovakia (11%), and Denmark, Hungary, Austria, Slovenia and Sweden (12%).

Eurostat defines poverty as income below the poverty threshold after social transfers. This threshold is calculated for statistical purposes as 60 per cent of the median income of the population as a whole, measured in terms of the net income of a household and its members. To permit a comparison between the twenty-seven EU Member States this threshold is converted into an artificial reference currency, the purchasing power standards (PPS), so as to compensate for differences in price between countries. 

One child in five at risk of poverty

In twenty of the twenty-seven Member States, child at-risk-of-poverty rates were higher than for the total population. In 2008, the at-risk-of-poverty rate for those aged up to seventeen years was 20 per cent in the EU27. The highest rates were recorded in Romania (33%), Bulgaria (26%), Italy and Latvia (both 25%), and the lowest in Denmark (9%), Slovenia and Finland (both 12%).

Elderly people also face a higher risk of poverty than the total population.  In 2008, the at-risk-of-poverty rate for those aged sixty-five years and over was 19 per cent in the EU27. The highest rates were observed in Latvia (51%), Cyprus (49%), Estonia (39%) and Bulgaria (34%), and the lowest in Hungary (4%), Luxembourg (5%) and the Czech Republic (7%).

Work reduces risk of poverty

Being employed significantly reduces the risk of poverty. In 2008, the at-risk-of-poverty rate for those in employment was 8 per cent on average in the EU27, ranging from 4 per cent in the Czech Republic to 17 per cent in Romania.

Highest rates in Bulgaria and Romania

In order to draw a broader picture of social exclusion in the EU, the at-risk-of-poverty rate, which is a relative measure, can be complemented by the material deprivation rate, which describes social exclusion in more absolute terms. The material deprivation rate is defined as the enforced lack of at least three of nine items, which include the ability to afford a week’s holiday a year, to buy meat or fish every second day, to keep the home adequately warm, or to possess a car, television or telephone.

According to this definition a further 17 per cent of the EU27 population suffered from material deprivation in 2008. The highest levels were registered in Bulgaria (51%), Romania (50%), Hungary (37%) and Latvia (35%), and the lowest in Luxembourg (4%), the Netherlands and Sweden (both 5%).

Looking at some of the individual items defining material deprivation, it appears that in 2008, 37 per cent of the EU27 population could not afford a one-week annual holiday away from home, 10 per cent could not afford to keep their home adequately warm, 9 per cent could not afford a meal with meat, chicken or fish every second day and 9 per cent could not afford a personal car.

The at-risk-of-poverty rate in the EU27 since 2005 has been between 16 and 17 per cent. In 2007, 79 million EU citizens were at risk and a further 32 million suffered material deprivation. A budget in excess of 26 million euros has been earmarked in 2010 to combat poverty and social exclusion, of which 17 million will come from the European Union.