This crisis cannot be confronted with statistics

Maroš Šefčovič, Vice-President of the European Commission in charge of Inter-Institutional Relations and Administration, on the right, presenting to the employees of the Eurostat of the EC the “special mention” of the 2013 Green Commission (EMAS) Award, awarded to ESTAT. (EC Audiovisual Services, 24/09/2013).

Eurostat, the statistical service of the European Union, announced yesterday the launch of a new series of annual publications, entitled “Smarter, greener, more inclusive? – Indicators to support the Europe 2020 strategy”. According to the relevant Press release, “The purpose of this publication is to provide statistics to support the Europe 2020 strategy and to back up the monitoring towards its headline targets”.

Going through the first publication, one is tempted to answer the above questions like that; More inclusive? Certainly not; Smarter? Who knows; Greener? Probably, but at what cost. Unfortunately, if statistics were enough to fight unemployment and fuel inclusive growth, statisticians would have been in much greater demand. Now, they simply insist that they tell the truth. But yet, who believes them? By the way, the statistician’s oath is about percentages of truth, in percentages of cases, in percentages of the questions asked, in percentages…percentages…so at the end there is almost nothing left from the solid hundred (100%).

It’s just ambitions

Now, let’s return to the Europe 2020 ambitious growth strategy for the next decade. In order to shape its future, the Union has set five objectives – on employment, innovation, education, social inclusion and climate/energy – to be reached by 2020. In theory, each member state has adopted its own national targets in all these five immense policy areas. The EU insists that “Concrete actions at EU and national levels underpin the strategy”. But again this assertion is just words, without any concrete short-term measures or policy strategies supporting them. As the Romans rightly observed, ‘Verba volant, scripta manent’ – targets being left with no supportive legislation. Let’s see if this is so.

Starting from the most important target, the one to achieve a total employment rate of 75% in the year 2020, the data released by Eurostat prove it to be a mid-autumn dream. This was expected because there is no concrete strategy written down, describing in details the means to achieve it. The reality of the cruel austere policies applied all over the EU, stands as an infallible proof that this is just another Brussels illusion. Even countries like Germany insist on a miser economic strategy for years, despite the fact that this high-flying economy could now support a relaxation of restrictions imposed on government spending and workers’ take home pay. Yet, this country denies helping itself to achieve a strong growth path and also leaves everybody else lost in a sea of uncertainty and distress.

Turning to core data, describing the developments in the socially sensitive fronts of employment and social inclusion, the EU’s performance on the road to the brave year of 2020 are a source of deep chagrin. Between 2009 and 2012 unemployment, poverty and social exclusion grew unimpeded all over the Union. Even in Germany the threat of poverty engulfed almost 17% of population in 2012 from 12% in 2009.

A nightmare for many

In detail, average total employment in the entire EU fell slightly between 2009 and 2012 from 69% to 68.5%. Understandably, the Commission’s strategy had predicted an increase, but in vain. In any case, this unimportant looking decrease, just half a percentage unit, accounts for 1.75 million people. Yet, this is only a part of the truth.
Averaging is a statistical method to hide reality. Despite this small average decrease of employment all over the Union, unemployment has reached the sky in the south of Eurozone. As for poverty and social exclusion, its toll increased from 113.8 million in 2009 to 119.8 million of people in 2012. The ambitious target of the ‘Europe 2020 strategy’ is 95.7 million. Evidently, reality is 24.1 million people away from targets, and things get worse, not better.

Given that prospects are not at all rosy for the next few years, the impossibility to achieve the target is obvious. If the ‘raison d’être’ of the economy is to serve people, the conclusion is that the European Union is a complete failure. Yet Eurostat’s announcement didn’t cause a huge wave of reactions from our political leadership and the EU institutions. On the contrary, it was greeted even with gratification over the…effectiveness of EU policies.

What about the good developments

Let’s now confront developments in ‘research & development’, ‘climate change & energy’ and ‘education’. In all those fronts EU averages appear to have evolved positively during the past few years. However the increase in R&D spending is tortuously slow from 2.01% of GDP in 2009 to 2.03% in 2011, against a target of 3% for 2020.

Passing to the progress of the ‘Share of renewable energy in gross final energy consumption’, it is evident that it advances with a strong pace. However, there is a vivid debate going on, about the means and the policies which were used to achieve this impressive progress of renewable energy production. Incentives, in the form of government handouts are so large to ‘investments’, that the Greek and the German countryside are today dotted with windmills and solar panels.

However, out of proportion subsidies on solar and wind generated electricity, have been quite distortive of energy markets. The burden on consumers has become so large that practically all member states are now changing course and rethinking the whole affair. It’s more than certain that the party is over for the renewables. The weight is so large on the economy that during the next few years it is sure that there will be a deceleration in electricity production from sun and wind. In short, in the only front that there has been a marked progress, the means and the policies used may have caused more damage than good. As for the marked betterment of education statistics during the past few years, this has nothing to do with the Commission and the EU. This is a deeply social and family matter that Brussels can do very little about it.

In conclusion, planning for the future is not bad, but turning a blind eye to the present is catastrophic. The crisis which still takes its toll is in much more urgent need of effective policies than statistics.