International economic bodies turn attention to welfare spending

Amid concerns of a major economic crisis across Europe, governments seeking budget solutions are increasingly turning their attention to state spending on welfare including health and social protection, according to discussions within OECD countries.

Recent OECD meetings in Paris have heard calls for winding down of the emergency measures put in place by many states to protect public budgets, in the wake of the financial crisis believed by many to have been primarily the responsibility of irresponsible practices in financial sectors.

Now health organisations fear that governments forced to review fiscal measures will focus on welfare spending as a proportion of national deficits.

William White, who chairs the influential OECD Economic Development and Review Committee is quoted as urging “exit policies” from measures by governments to support economies as soon as possible to reduce debts and “pursue structural reforms” to increase potential growth.

It is suggested that welfare spending may “threaten a new economic crisis” unless drastic actions are taken.

The Equity Channel event in Brussels in March featured a presentation by Dr Anna Coote, Social Policy Director of the New Economics Foundation, which advocates a different approach to structural reforms in the financial sector which could protect public investments.

At the recent meeting of the EU Health Policy Forum EuroHealthNet asked for information about what health impact assessments are being made of the new proposals for the Europe 2020 “flagship” economic strategies for the next decade, but answers were inconclusive.

EuroHealthNet Director Clive Needle said “we know from history that, while short term measures may superficially resolve perceived debt and deficit problems, the health and care sector will bear much of the future burden of the social crisis which would follow as surely as night follows day".

"The evidence of the Commission on Social Determinants of Health is clear: significant reforms to the way wealth and power is measured and balanced is needed globally including in Europe", he adds. "This is a test for the governments who agree resolutions in World Health Assemblies but who may now may enforce harmful health and welfare cuts which would prevent health and equity targets being achieved for decades.There are alternatives and health bodies should argue for them now.”

For more information about the OECD or to read the full article by William White in the newest OECD Observer issue, please click here.

Further information about the New Economics Foundation can be found here and for more information about the EU 2020 proposals please click here.

[Photo: “yet more coins” by pajp, available under a Creative Commons License]