EU report warns of poverty

A recent report from Brussels on economic and social cohesion warns that income disparities in the European Union will double after the next round of enlargement slated for 2004, and that bridging the gaps between rich and poor will be a major challenge.

In the enlarged EU with 25 member states, 116 million people, or 25 percent of the total population will live in regions with a per capita GDP below 75 percent of the EU average, according to the report.

This compares to the 68 million people, or 18 percent of the total, who now live in such regions in the present 15-member EU, according to the report.

The regional policy directorate general, a department in the European Commission that assists in the economic and social development of poorer regions in the EU and which compiled the report, openly warns of the social challenges that taking on poorer East European countries entail.

Because of this Michel Barnier, the regional policy commissioner of the directorate, said there was no doubt that in 2003 regional policy will be at the top of Europe's domestic agenda.

After expansion "a quarter of the EU's population will live in low-income regions of which no fewer than six out of every 10 will be in the new member states," he said.

Three million jobs will have to be created if the average level of employment in new member states - of which there are 10 - is to be aligned with that of the rest of the EU.

However, the economic potential of the new member states, including the Baltics, is seen as the driving force for a higher rate of average economic growth because their annual GDP growth is usually higher than in the present member states.

The EU already has four member states (Spain, Portugal, Greece and Ireland) whose GDP is below 90 percent of the European Community average.

During the next round of enlargement, which is expected to take place on May 1, 2004, Estonia, Latvia, Lithuania, Slovakia, Slovenia, Hungary, the Czech Republic, Cyprus, Malta and Poland are to join the EU.