EU poverty indicators: Croatia between Spain and Italy
The usual negatively intoned reporting in the local media accompanied the release of the Eurostat’s Person’s at Risk of Poverty or Social Exclusion in the EU release on October 16. If you don’t read beyond the headlines, or God forbid bother to download the actual report, you’d be forgiven for thinking Croatia is falling apart. It all follows a well-worn habit of overly pessimistic, context free negativity in the public sphere, which is one of the stylised facts of life in Croatia.
This, after a summer of being bombarded with local media reports that Croatia is stone motherless last in the EU because Bulgaria and Romania have faster rates of GDP growth currently (none of the abovementioned reports paused for a second to even consider whether it might not be condescending to – even implicitly – assume Croatia was somehow by rights superior to Bulgaria or Romania). It is also easy to forget in this maelstrom of negativity that we are talking about the EU here; the wealthiest, largest, most politically advanced supranational construction in the history of mankind.
None of this is to say that the figure of 27.9% of the population at risk of poverty of social exclusion in 2016 is not far too high to the EU average (22.5%) or when compared to our immediate EU neighbours Slovenia (17.1%) and Hungary (25.6%). In the cases of both Slovenia and Hungary the trend since 2007 has been down from 18.2% and 28.5% respectively. Since Croatia was then not in the EU, there is no data to compare, but, I think it is safe to say that the 2016 number is higher than the 2007 number would have been, given the lengthy recession Croatia endured through to 2012. Clearly, the data release holds lessons for policy in Croatia, which we will get to a bit later on.
Yet there are six EU member states where the poverty and social exclusion numbers are worse than Croatia’s. In other words, almost a quarter of the EU (looked at by the number of EU member states) is worse off than Croatia. There are countries on the list which you would not be surprised to find, such as Romania and Bulgaria, but both Latvia and Lithuania come out worse too. That Greece is worse off is also not too much of a surprise, but that Italy, a founding member state of the EU and a G7 member has a higher percentage of people at risk of poverty or social exclusion (28.9%) than Croatia is a genuine surprise to me. That means that 20% of the EU’s citizens live in countries where the risk of poverty or social exclusion is greater than in Croatia. Interestingly, right after Croatia on the list comes Spain – food for thought for those who believe the Eurozone dealt properly with its crises.
In the three subcategories is at the same level for Severly Materially Deprived persons (six EU member states have worse number – Hungary replaces Italy on this particular list). For the number of people at risk after social transfers there are seven countries with worse indicators than Croatia (Estonia joins the original six on this measure) while only three countries have worse indicators for Percentage of people aged 0-59 living in households with very low work intensity. Surprisingly, these countries are Ireland 18.2%, Greece 15.6% and Belgium 13.5% compared to 13% for Croatia. Spain is again next at 12.8% with Italy a bit further back at 11.8%.
What to make of all of this? On every measure Croatia is worse off than the EU average, which is no surprise. Not only was Croatia the last country to join the EU and therefore the one with the least amount of time to make the most of EU membership, Croatia is not Switzerland and her entry into the EU was never going to improve the average for any wealth or poverty indicator.
On the risk of poverty after social transfers indicator the difference between Croatia and the EU average is the smallest (2.6 percentage points) suggesting that social welfare policies are working. Yet, when one considers only 3 EU member states have more households with very low work intensity, the combination of social welfare programmes, labour market rules and vocational training programmes appears far from optimal. These are clearly areas where more government attention to policy settings seems to be warranted.
Clearly, the indicators released by Eurostat cannot please any fair-minded person in Croatia. More needs to be done to lower these risk indicators so that the next time they are released evident progress can be recorded. How difficult this might prove is perhaps best seen by the countries behind Croatia in this list. Greece and Italy in particular come to mind as does the fact that if Croatia is to climb that list, it is Spain which is immediately ahead of it. These are all countries with vastly more institutional, economic and political experience (at a minimum) than Croatia yet face the same problems that we do and to arguably a greater degree. Rather than whinge without context, why not reach out to them and those more successful than us on these indicators to see if we might not improve our lot the next time Eurostat compiles these indicators.