Europe is beset with significant social problems. Millions of people became unemployed from 2008-13 and poverty has increased significantly. Economic consolidation has made efforts for sparing social protection from spending cuts, but the allocation of correction costs between the young and old has been unequal and rough and a growing generational divide can be plainly felt, placing the youth in a bad situation. The effectiveness of the social security systems of the EU countries is quite different from each other because countries with greater disparity had the tendencies to have higher household borrowing prior to the crisis resulting in more restrained consumption growth during the crisis.
The consequential high private debt, greater levels of unemployment, poverty and greater limitations upon access to education chips away at the long-term growth that includes social and political stability. European Union leaders face three major challenges. The first is the handling of unemployment and poverty issues should remain a high priority not only for its own sake but because these problems undermine public debt sustainability and growth. Second, bold policies in various areas are required. Most labor, social and fiscal policies are the responsibility of member states, requiring national reforms. But better coordination of demand management at European level is also necessary in order to create jobs.
Third, tax/benefit systems should be reviewed for improved efficiency, intergenerational equity and fair burden sharing between the wealthy and poor. A contemporary economic plan for helping the European Union whether the current recession and steer the economy during the next ten years show signs of having a significant impact on social issues, which includes poverty and unemployment. The major objectives of the Europe 2020 Strategy have been agreed upon by the European Council. The decision to support the Commission’s proposal on the new strategy comes because of the worst financial crisis the EU has faced since its inception as a common market entity.
Building on the work of the Lisbon strategy for growth and jobs, Europe 2020 promises closer economic policy coordination to help Member States put their economies back on track and address global challenges in a coherent and effective way. For one thing, a European platform against poverty has been planned for supporting economic, social and regional consistency by helping poor and socially excluded people to preserve their self-esteem and play an active role in society. A schedule to create new skills and jobs seeks to modernize labor markets, increase employment levels and ensure Europe’s social model remains sustainable and inclusive.