Estudio de fotocatalizadores de Cu-TiO 2

Europe 2020 is the EU's growth strategy for the coming decade. The Union has set five targets to be reached by 2020, including one on reducing the number of people in or at risk of poverty and social exclusion by 20 million82. Achieving the Europe 2020 poverty reduction target depends crucially on the continued contribution of pension systems to preventing and mitigating poverty in old age and the poverty threshold, which is determined by the evolution of the general level of income in the society.

Poverty rates of people 65+ are to a great extent a function of the poverty avoidance and poverty mitigating capacities of pension systems including instruments of minimum income provision for older people. Pensions represent by far the largest element in social protection systems, affecting the primary incomes of more people than any other part.

In 2010 there were 16.9 million people aged 65 and over in the EU who were at risk of poverty or social exclusion. Around 5.4 million of them were severely materially deprived and

13.4 million were at-risk-of-poverty83. In the majority of Member States people aged 65+ who are at risk of poverty or social exclusion represent between 10% and 20% of the total population at risk of poverty or social exclusion. The average for the EU-27 was at almost 15% in 201084, while in CY and BG the share of older people in total population at risk of poverty or social exclusion was over 20% (see Figure 25). This demonstrates that achieving the 2020

82 _{In the case of older people the risk of poverty or social exclusion of the people over 65 is used to measure a}

progress towards the EU2020 target (see Annex 1 for details).

83

The severe material deprivation tries to identify the inability to afford some items considered desirable or even necessary by most people to lead an adequate life, while the at-risk-of-poverty is a measure of income poverty. The former is an absolute while the latter is a relative measure. The two numbers do not add up to 16.9 million, as around 2 million older people suffer from both deprivation and poverty as defined by the EU indicators.

poverty reduction target crucially depends on developments for people aged 65+ and that the

potential ability of pension systems to affect the numbers in poverty and achieve the poverty target is considerable, especially for Member States where older people represent an

important share of people at risk of poverty or social exclusion. Clearly, the challenge would be bigger in Member States with higher proportion of the poor people.

Figure 25. Population 65+ at risk of poverty or social exclusion in relation to total population at risk of poverty or social exclusion, 2010 0 0,05 0,1 0,15 0,2 0,25 0,3 CY BG FI SE SI PT EL IT DK LV AT BE UK MT DE EE ES EU 27 RO LT PL SK CZ FR HU NL IE LU

65+ at risk of poverty or social exclusion over total population at risk of poverty or social exclusion 65+ Males at risk of poverty or social exclusion over total male population at risk of poverty or social exclusion

65+ Females at risk of poverty or social exclusion over total female population at risk of poverty or social exclusion

Source: Eurostat

Note: The EU Survey on Income and Living Conditions (EU-SILC) has a significant time lag. 2010 (t) data refer to income and employment for 2009 (t-1) while only the information on living conditions and material deprivation refer to 2010 (t). In IE the reference period refers to the 12 months prior to the interview, while in the UK it is centred on the interview date.

In the case of older people, successful reduction of poverty will depend on whether the severe material deprivation and at-risk-of-poverty rate are tackled. In the coming decade, when the economic crisis is overcome, one can expect that the catching-up countries will record a decline in the severe material deprivation of older people along the overall increase of living standards. It is more difficult to project the evolution of the at-risk-of-poverty among the elderly, which is a relative concept and to a large extent depends on the evolution of both future pension benefits (which to a large degree depends on their valorisation and indexation) and future earnings. Given the uncertain economic outlook for the next decade, it is tricky to forecast the evolution of pension benefits and earnings.

On one hand, in the event of protracted low growth Member States will have to continue to adjust social security expenditure to levels that reflect the trend of growth rate of the economy and are affordable in the long run. This could also affect pension expenditure, e.g. through lower indexation. An increase of the poverty rate can result from a slower increase in pensions than of general incomes, in particular for Member States with higher growth of wages and where pensions are indexed on prices.

On the other hand, painful economic adjustment might also affect evolution of wages in some EU Member States. If wages fall behind increases in prices and in consequence the median income stabilises or declines, pensioners on price-indexed benefits might be better protected against the risk of poverty.

As discussed in chapter 3.2.1, not only the scale of at-risk-of-poverty is an important factor, but also the depth of the poverty gap. In the EU-27, 3.2% of people aged 65 or over (2.7 million) live on an income below 40% of the median income in their country, 7.6% below 50% (6.4 million), 15.9% below 60% (13.4 million), and 26.2% below 70% (22.1 million, for reference see Figure 18).

Increasing the relative equivalised income of older people who are at-risk-of-poverty by 20% would help to lift around 7 million persons (those between 50% and 60% of median income), out of poverty (as defined within the EU2020 strategy). Such calculations assume that the value of the poverty thresholds do not change over time so incomes of working age population do not increase. This, of course, is not a desired result for the economic development of the EU. Similarly, a relative drop in incomes of elderly people by 1/7th could add another 8.7 million people to the group at-risk-of-poverty, as those with the income currently between 60% and 70% of median would fall under the 60% at-risk-of-poverty threshold.

The example above shows that pension systems can achieve large scale contributions to the

poverty reduction goal. The questions are (1) whether the minimum income provision levels

for older people can produce benefits that hover above the poverty threshold and help move people out of monetary poverty; and (2) how this can be financed?