THE STATE OF THE EUROPEAN UNION REPORT. Europe in a period of transition

THE STATE OF THE EUROPEAN UNION 72 Objectives not achieved: the social dimension Inequality is not measured solely using the criteria of growth and the income distribution of GDP per capita. So- cial living conditions are also key factors.The employment rate, which is closely linked to economic indicators, is a measure of how the social situation develops usually as a direct response to an economic slowdown, even though it does not provide any information on the quality of wor- king conditions unless differentiated further. Overall, the EU was unable to achieve its target of an employment rate of 75 percent as set out in the Europe 2020 strategy. Ta- ble 3 shows the differences between the eight countries selected here in terms of their employment rates for 2020. Sweden and Germany top the group with rates of around 80 percent, with Spain and Italy bringing up the rear with rates of between 63 percent and 66 percent. Estonia, whose economy was severely affected by the financial and economic crisis, experienced a sharp decline in employ- ment from 77.1 percent to 66.8 percent between 2008 and 2010, but returned to pre-crisis levels by the end of the decade. In Spain and Italy, employment declined for a longer period due to the subsequent euro crisis; neither country recovered from its low point of just under 60 percent prior to 2013 and it was not until 2018/19 that both returned to pre-crisis levels. From 2010, thanks to strong employment growth, Romania managed to overtake and maintain its lead over Spain; by 2019, it was still three percentage points ahead of the western European country at just under 71 percent. In France, Finland and Sweden, the employment rate rose steadily but moderately until 2019, but remai- ned below the EU average in France. Germany recorded an increase of over six percentage points between 2008 and 2019 to a rate of 80.6 percent.All employment rates stagnated or declined slightly in 2020, the first year of the pandemic, with short-time work schemes limiting the extent of the decline. How successful has the EU been in the last decade in combating the risk of poverty and social exclusion? The relevant indicator corresponds to the sum of people who are living below the poverty threshold of 60 percent of the respective national income after social transfers, or who are severely materially deprived or living in house- holds with very low work intensity. In 2010, the EU set a target in its Europe 2020 strategy of lifting a total of 20 million people out of the risk of poverty and social exclusion by 2020. Between 2008 and 2019, it achie- ved a reduction of just under half of the original target. This was linked to a sharp increase in risk rates during the economic crisis, from 23.3 percent in 2009 to 24.8 percent in 2012, and a very slow decline thereafter (see Table 3. Employment rate for 20- to 64-year-olds, selected countries and years 2008 2012 2019 2020 Italy 62.9 60.9 63.5 62.6 Spain 68.5 59.6 68.0 65.7 Romania 64.4 64.8 70.9 70.8 France 69.9 68.9 71.6 71.4 EU27 69.5 67.6 73.1 72.4 Finland 75.8 74.0 77.2 76.5 Estonia 77.1 72.2 80.2 78.8 Germany 74.0 76.9 80.6 80.1 Sweden 80.4 79.4 82.1 80.8 Source: Eurostat.