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Brussels As many as 146 million people could be at risk of poverty by 2025 if austerity in Europe continues unabated, the international aid group Oxfam said in a new report Thursday.
It is the latest contribution to a brewing debate in the European Union about the effects of its crisis-fighting austerity measures, and whether the way forward should be further fiscal consolidation or growth-boosting spending.
With unemployment stuck at record levels and public discontent on the rise, the EU has already eased its austerity measures somewhat, for instance by granting countries leeway on their deficit goals.
But Oxfam wants it to go further.
"Aggressive cuts to social security, health and education, fewer rights for workers and unfair taxation are trapping millions of Europeans in a circle of poverty that could last for generations," charged Natalia Alonso, the head of Oxfam's EU Office.
"The wave of economic austerity that has swept Europe...is at risk of doing serious and permanent damage to the continent's long-cherished social model," added Nobel laureate and former World Bank economist Joseph Stiglitz, who wrote the report's foreword.
It could take as much as 25 years for Europeans to regain "the living standards they enjoyed five years ago," the Britain-based Oxfam said.
Its new report, titled A Cautionary Tale, predicts that another 15 to 25 million Europeans will be at risk of poverty by 2025 if austerity is "left unchecked." In 2011, 121 million people fit that description in the EU.
The projections are based on the assumption that poverty could increase anywhere from 3 to 5 percentage points in the EU - based on a prediction by the Institute for Fiscal Studies that poverty rates in Britain will rise by 2.5 to 5 percentage points by 2020.
At the same time, the inequality between the poorest and the richest keeps getting larger, Oxfam warned.
"The gap between rich and poor in the UK and Spain could become the same as in South Sudan or Paraguay," Alonso said.
She called on EU finance ministers, who will hold two days of informal talks in Lithuania starting Friday, to reverse course.
"We're calling on European governments to champion a new economic and social model that invests in people, strengthens democracy and pursues fair taxation," Alonso said.
"Governments could raise billions for public services, such as health and education, by taxing the wealthiest and cracking down on tax dodging," she added.
