EU action against poverty

Written by Marketa Pape.

Poverty has many dimensions. Following recent crises, not least the COVID-19 pandemic and the cost-of-living crisis, some of poverty’s known dimensions have evolved while new forms have emerged. Addressing poverty remains mainly the responsibility of EU countries’ governments acting in complex national social settings. The EU meanwhile seeks to coordinate Member States’ efforts and offers support in the form of funding and data. The new European Commission is stepping up efforts to meet the EU’s poverty reduction targets.

Context

To capture various dimensions of poverty, Eurostat compiles statistics on persons at risk of poverty or social exclusion (AROPE). Combining three risks, it counts people who are either at risk of poverty (AROP rate), experience severe material and social deprivation, or live in a household with a very low work intensity. In 2023, 94.6 million people (21 % of the EU population) were at risk of poverty or social exclusion, slightly fewer than in 2022 (95.3 million, 22 % of the population). The risk was higher for women than for men, for people living in households with dependent children, and for people with disabilities.

EU legal basis and policy framework

Article 3(3) of the Treaty on European Union and Articles 151 to 164 of the Treaty on the Functioning of the European Union (TFEU) form the legal basis for EU action against poverty. As per Article 153 TFEU, while in work-related settings the EU can set minimum requirements by means of directives, social exclusion can be combated only through non-legislative cooperation.

Since October 2017, the European Pillar of Social Rights has become a reference point for policies aimed at strengthening the EU’s social foundations. Although legally non-binding, it established social protection and inclusion as one of three key areas for action. The related 2021 action plan set three headline targets for the EU to reach by 2030, one of which was to cut the number of people at risk of poverty or social exclusion by at least 15 million, including at least 5 million children. Endorsed at the 2021 Porto Social Summit, and substantiated with Member States’ national targets in 2022, the action plan should be reviewed in 2025.

The plan’s implementation has been integrated in the European Semester framework for coordinating EU countries’ economic and social reforms, with several poverty-related indicators monitored in the revised social scoreboard and reflected in country-specific recommendations.

EU policy responses

The EU has implemented the Social Pillar’s principles mainly through the following initiatives.

Wages (principle 6): To prevent in-work poverty, the 2022 Directive on minimum wages aims to ensure that workers in the EU have a fair minimum wage. The new rules have only applied since 15 November 2024 and their impact should be evaluated in 2029.

Childcare and support to children (principle 11): The 2021 EU strategy on the rights of the child includes actions to tackle poverty, and the 2021 Council recommendation on a European Child Guarantee is aimed at guaranteeing that children in need have access to a set of key services. Member States have appointed their Child Guarantee coordinators and prepared national action plans covering the period until 2030. Every two years, they should submit progress reports based on a monitoring framework introduced in 2024, to track progress and ensure accountability in implementing the Child Guarantee.

Access to social protection (principle 12): Following the 2019 Council recommendation on access to social protection for workers and the self-employed, the Commission has established and regularly updated a monitoring framework. In 2023, it reported to the Council on implementation.

Minimum income (principle 14): In line with the 2023 Council recommendation on adequate minimum income ensuring active inclusion, Member States should report to the Commission every three years, applying the benchmarking framework on minimum income for the working age population.

Old age income and pensions (principle 15): The European Commission reports regularly on pension adequacy using a benchmarking framework; it also published a Green Paper on Ageing in 2022.

Inclusion of people with disabilities (principle 17): To improve the social and economic situation of persons with disabilities, the Commission put forward the 2021 strategy for the rights of persons with disabilities 2021-2030. Its implementation can be followed on the monitoring framework website.

Housing and assistance for the homeless (principle 19): Acting on the 2021 Lisbon Declaration and joint commitment to work towards ending homelessness by 2030, the EU launched the European platform on combating homelessness and Member States adopted integrated national anti-homelessness strategies.

Access to essential services (principle 20): The Commission’s 2023 report warns that people at risk of poverty and social exclusion, in particular disadvantaged groups such as Roma or homeless people, face challenges in access to water, sanitation, energy, transport, financial services and digital communications. The EU has sought to tackle energy poverty through a set of targeted measures, including a 2023 recommendation, guidance and funding (see below).

European Parliament

Parliament has sought to strengthen EU action to reduce poverty and improve social inclusion in several areas. For instance, it has maintained the need to address child poverty on the political agenda since 2015, followed by a 2021 resolution on the European Child Guarantee. In 2023, Parliament called for the European Child Guarantee to be strengthened and for help for children and their families in times of crisis, and in 2024 for an annual designation of European Capitals for Children to help fight child poverty.

In 2021, Parliament called for an EU framework for national homeless strategies based on the principle of ‘Housing First’, and for an overarching EU anti-poverty strategy with ambitious targets to reduce poverty and end extreme poverty in Europe by 2030. In 2022, it drew attention to the complexities of women’s poverty. In the context of the rising cost of living and the impact of the energy crisis, in 2024 Parliament called for the related gender aspects to be taken properly into account.

EU financial support

In the 2021-2027 programming period, the European Social Fund+ (ESF+), with a budget of €142.7 billion, co-finances actions aimed at fighting poverty and exclusion. The ESF+ Regulation sets levels of funding to be earmarked for social inclusion, food aid and basic material assistance for the most deprived, and measures targeting children. The EU’s temporary Support to mitigate Unemployment Risks in an Emergency (SURE, which expired in 2022) helped Member States to preserve jobs and incomes during the COVID-19 pandemic, by means of loans for short-time work schemes.

The 2021 Recovery and Resilience Facility (RRF) seeks to mitigate the economic and social impact of the COVID-19 crisis with up to €650 billion in grants and loans to be invested in reforms and projects, by the end of 2026. Two of the six RRF pillars contribute to tackling poverty and social exclusion. The EU also supports measures seeking to ensure that poverty and social inclusion do not worsen in the transition towards a net-zero economy (the Just Transition Fund). From 2026, the Social Climate Fund will support groups vulnerable to impacts of the green transition, such as households in energy and transport poverty.

Recent developments

According to the Commission’s report ‘Employment and Social Developments in Europe 2024’, progress towards the EU 2030 poverty reduction target is advancing but remains limited for children. The risk of poverty or social exclusion decreased slightly and income inequality remained stable, while severe material and social deprivation and energy poverty increased, particularly for low-income households.

In her political guidelines, Commission President Ursula von der Leyen committed to addressing the root causes of poverty and addressing the housing crisis. Roxana Mînzatu, the Commission’s Executive Vice-President for Social Rights and Skills, Quality Jobs and Preparedness, has been tasked with developing the EU’s first ever anti-poverty strategy and strengthening the Child Guarantee.

Read this ‘at a glance’ note on ‘EU action against poverty‘ in the Think Tank pages of the European Parliament.