Of all the aspects usually taken into account when assessing the process of European integration, household economic and material welfare has not received the most attention in either political debate or the analysis of the social situation.
Although there have been different initiatives promoted by EU institutions, the policies that may lead to an improvement in the indicators discussed in this report fall outside the scope of action of the governing bodies of the European Union. This explains why differences among the member states in this area are still noticeable today. Since 2004, a very rich source of common information has been available which allows us to explore these differences. It is called the European Union Survey of Income and Living Conditions (EU-SILC).
Both the extent of these differences and Spain's position compared to other countries can be calibrated by selecting some of the most representative indicators in each sub-dimension for which there is comparable information for European Union countries. One of the first conclusions we can draw when it comes to comparing EU countries is that Spain is much lower down the rankings for the material living conditions indicators than it is for GDP. On a scale that normalises average EU GDP at a value of 100, Spain was 14th out of 28th with a normalised GDP of 101 in 2008, and it continued to occupy 14th place in 2016 but with a normalised GDP of 91. As can be seen below, its ranking in the comparisons considered here is always worse than one would expect given its economic strength.
1. Economic vulnerability
Spain's position in the ranking of countries ordered ac-cording to economic vulnerability, that is, people with an income of less than 75% of the median income, is much worse than its ranking for per capita income. There are only three countries in which the percentage of people living in economically vulnerable households is higher than in Spain. The trend is also negative, having fallen down the rankings over the last decade. Moreover, it is especially worrying that Spain's position has remained unchanged during the last quartile.
Rich countries from central and northern Europe generally have an economic vulnerability rate below the European average, and the opposite occurs in the poorest countries, although with exceptions.
Spain is one of the average income countries with the highest proportion of economically vulnerable people. This figure must also be considered taking into account that the threshold defined for economic vulnerability is a relative measure; that is, this threshold depends on how income is distributed among the population.
Due to the severity of the economic crisis, Spain is one of the five countries where in 2016 the value of income used to establish the economic vulnerability threshold was equal to or lower than that used in 2008. This is due to the strong impact of the prolonged recession on the level of income (the other four cases are Greece, Ireland, Cyprus and the United Kingdom).
In summary: Spain is in an unfavourable position within European Union in the basic indicator of economic vulnerability. This position is not simply due to the crisis, given that Spain's situation was already unfavourable before 2008. In any case, this situation has worsened since then and has not been corrected since the beginning of the recovery.
2. Difficulties in making ends meet
Difficulties in making ends meet is an indicator of the capacity of households to maintain a certain economic-financial balance. In most European Union countries this indicator had not worsened since the beginning of the economic crisis. Spain, however, is one of the nine countries where an increase in the value of this indicator has indeed been seen.
There is, in any case, a very wide difference in the level of "difficulties in making ends meet" found in EU member states. Spain occupies 20th place among the 28 European Union countries, with a clear worsening since 2008. Although still positioned within the third quartile, it now occupies the penultimate position in the group, whereas before the crisis it was in second place.
It should be noted that the order of countries according to this second indicator is different to that for vulnerability. The countries with continental (Germany, Austria) and Nordic (Finland, Sweden) welfare systems occupy the top positions in the ranking. The ranking of countries according to difficulties in making ends meet is more consistent with the ranking according to income.
Again, Spain does conform to this relationship, occupying a much lower position than one would expect given its average level of wealth, and is ranked below countries with a per capita income significantly lower than Spain. The difference between Spain and the EU-28 average is more than 10 percent (35.6% of people in homes with difficulties in making ends meet, compared to 24.1%), whereas before the crisis this was less than 7 percent.
3. Consistent poverty
The third indicator selected is consistent poverty. It is an important data figure when examining the position of Spain in the context of EU countries given that it combines two of the variables used by the European Commission to track progress in the living conditions of European households: monetary risk of poverty and material deprivation. This figure is especially negative for Spain, which is in the last quartile of the EU-28, and has also fallen in the rankings since 2008.
The worsening of the consistent poverty indicator in Spain stands out within the framework of EU countries. Between 2009 and 2016, Spain was one of the three countries for which the percentage of people simultaneously suffering low income and material deprivation increased the most. The high level of unemployment and general decline in the income of Spanish households led to us falling down the rakings for both monetary poverty and material deprivation.
Before the crisis, the extent of the problem in Spain was lower than the EU-28 average, but now (in 2016) the situation is the opposite (10.4% of people living in situations of consistent poverty compared to 7.3%, respectively).
In Spain barely 3.3% of the total of social transfers in the year 2016
targeted children, against the European average of 9%. However, this study
shows that it is the most effective way of eradicating poverty.