Academic journal article Journal of Australian Political Economy

The Impact of the 2008/9 Crisis on Inequality and Poverty in Southern Europe: The Case of Spain

Academic journal article Journal of Australian Political Economy

The Impact of the 2008/9 Crisis on Inequality and Poverty in Southern Europe: The Case of Spain

Article excerpt

The issue of global economic inequality has increasingly drawn the attention of scholars (Atkinson 2000; Lapavitsas, 2012; Milanovic 2005; Piketty 2014; Sala i Martin 2006; Stiglitz 2012), NGOs (FOESSA 2014; OXFAM 2014, 2015), and international institutions (World Bank 2006; IMF 2007; UN 2005; OECD 2008, 2011, 2012, 2013, 2014b; UNDP 2005; UNICEF 2011). There is little doubt about the phenomenon of rising inequality, already noticeable from the later 1990s and worsening with the outbreak of the current financial crisis. Not surprisingly, the new Sustainable Development Goals, approved by the United Nations in September 2015, include as a priority the pursuit of equality (Goal 10).

The recession has had serious effects in most countries on inequality, poverty, and at-risk-of-social-exclusion figures. However, differing patterns have emerged. Within the EU-15, the Southern countries seem to have experienced a larger impact. Greece, Italy, Portugal, and Spain have suffered severe socio-economic deterioration that may be irreversible, even if growth-rate recovery consolidates. Indeed, as we show later, a detailed analysis of the economic conditions in Southern Europe reveals that no direct correlation exists between the magnitude of the recession and the social conditions in each country.

The determinants informing social exclusion and the lack of equality during the crisis in Southern Europe leads us to formulate two questions. First, to what extent have inequality and poverty patterns followed a different path in Southern Europe, compared with the core European countries? Second, what are the particularities of Spain within the European periphery?

We have chosen to delimit our study to Greece, Italy, Portugal, and Spain, given both the importance of state redistribution in the final outcomes for inequality and poverty and the reasons provided hereafter. Greece, Portugal and Spain have traditionally been in a situation of economic backwardness compared to other EU members. After entering the EU, their GDP per capita was still 68 per cent of the EU average (European Commission 2001: 4). More recently, they have experienced an asymmetric impact of the crisis: according to the classification of countries by the impact of recession between 2007 and 2011, made by the European Commission (2013: 19), Greece and Spain are in the group of 'very high' impact, whereas Portugal and Italy are in the group of 'high' impact. Those three countries share also a common history of Fascist-military political dictatorships which did not end until the 1970s (although in Greece it was shorter than in the Iberian countries). Certainly, these historical reasons explain the underdevelopment of their welfare states (Navarro et al. 2007; Navarro 2011, 2014).

We also include Italy here because the Italian welfare state shares with these other countries some critical traits (i.e., the role played by families--especially women--in providing social protection), which is why the literature included it in a so-called Mediterranean or Southern regime of welfare (Ferrera 1996; Navarro et al. 2007: 63). Following Del Pino and Rubio Lara (2015), this is characterised as a regime whose members experienced a late development of their welfare states and these would have been influenced by the significant role of families. In these welfare states, some universal services (such as healthcare or education) coexist with some contributory and means-tested benefits as well as the marketisation of other social services (Del Pino and Rubio Lara 2015). The result is a welfare state with a lower capacity to reduce poverty and inequality.

To make our comparison, we have chosen countries that represent other welfare regimes (Ferrera 1996; see Arts and Gelissen 2002 for other classifications) and/or that are key core European countries. Germany and France, in addition to be paradigmatic core countries, are attributed to the Continental-corporatist welfare regime, in which work is the base of social rights, being thereby mainly financed through social security contributions. …

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