ECONOMY: Poor New Europeans

By Pavol Stracansky Reprint | | Print |

Pavol Stracansky

BRATISLAVA, Slovakia, Aug 27 2004 (IPS) - Government reforms and cuts in social benefits have been blamed for fuelling poverty in Slovakia after an EU study showed more than a fifth of Slovaks living in poverty.

A recent study by the European Union (EU) statistics agency Eurostat shows that 21 percent of Slovaks live below the poverty line, defined as income three-fifths of the average monthly wage.

The average monthly wage is 350 euros (420 dollars), according to the Slovak Statistical Office.

The figure in poverty was the highest among the 10 new EU member states and well above that in the neighbouring Czech Republic, which with eight per cent had the lowest percentage of its population living in poverty of all the new EU member states. The average across the entire EU is 15 percent, according to the study.

Opposition politicians and sociologists have said the figures are evidence that the government has deepened poverty by failing to create job opportunities while simultaneously cutting benefits.

"By cutting benefits especially in the social sector the government is trying to kickstart the economy," Jozef Burian of the opposition Smer party told Slovak media. "That’s no solution. Job opportunities have to be created first and the government has to invest more to get employment growing."

The government has done nothing to attract large investment to the east of the country where unemployment and poverty are highest, he said.

"The state is trying to use this to get people off the welfare net and into work," Zuzana Kusa, a sociologist with the Slovak Academy of Science told Pravda daily. "But that would only work if there were enough job opportunities in Slovakia."

Eight of the 10 new EU member states are former communist countries which have since 1989 gone through a transition from a command to free-market economy.

Prior to EU entry Slovakia was seen as among the poorest of the accession states. The neighbouring Czech Republic and Hungary have been shown in studies by several economic and statistical organisations to have a higher standard of living and lower levels of unemployment.

The national unemployment rate in Slovakia is 14 percent, but in some communities such as the Roma it can be as high as 100 per cent.

Unemployment in the Czech Republic stands at nine percent and in Hungary at six percent. The average monthly wage in the Czech Republic is 530 euros and in Hungary 590 euros, according to national statistics.

The Slovak government has launched a series of reforms to the welfare system in what is intended as an effort to stop people relying on state benefits and encouraging them to seek employment.

Earlier this year some people saw their benefits cut by as much as 50 percent. The move led to rioting in the poor Roma community. People began looting supermarkets because they said the cuts had left them with no money to buy food.

Many Roma claim that endemic discrimination and racism prevents them from finding employment and receiving good education, and that they remain stuck in a poverty trap as a result.

"For some groups in society such as the Roma, government reforms and benefits cuts have created complicated conditions because the people in those groups have not been able to react to them so well for reasons such as a lack of qualifications or skills," Grigorij Meseznikov, a sociologist with the Institute for Public Affairs in Bratislava told IPS.

Government officials have refused to comment on the results of the study.

But Meseznikov says the study may not be an accurate reflection of the real level of poverty in Slovakia.

"The study may not show the whole picture," he said. "Poverty is a problem in Slovakia and maybe statistically Slovakia is the poorest of the new EU states, but there are many people, especially in villages, who have other revenue sources, such as small allotments used to keep chickens and grow vegetables, that might not get taken into account in these studies. It would be unfair to portray Slovakia as a poverty champion in Europe."