In the wake of the pandemic, a social crisis brews in Brussels
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In the wake of the pandemic, a social crisis brews in Brussels

According to a study published in early July by Perspective.Brussels, by April, only a month into the lockdown, nearly 76,000 employees had already applied for temporary unemployment benefits. © Gabriela Galindo/The Brussels Times

In the spring, as the coronavirus pandemic reached Belgium and health care workers triaged and treated the throngs of patients sickened by the novel virus, stacks of files began piling up on Jan Willems’ desk.

With the virus creeping unchecked into Belgium, sickening the first hundred patients with Covid-19, shuttering businesses and sending citizens indoors, the government went into overdrive to ready front-line workers to face the disease that had brought the Chinese industrial hub of Wuhan to a standstill and to which wealthy northern Italy was already succumbing.

Government officials scrambled to make up for past decisions, which, in the name of stabilising the budget deficit, sucked millions out of the social security coffers and repeatedly let the budget of the public health system trail behind the rapidly rising cost of care and other expenses.

Face masks and other personal protective equipment had passed expiry dates, so several uncoordinated orders were placed, further straining global supply chains; understaffing and burn-out threatened, so decrees to simplify recruiting for the front lines were signed; tests kits were scarce, so a federal minister was put in charge of a new, ad-hoc Testing & Shortages task force; ventilators were in short supply, so hospitals appealed to the public for donations.

And as government officials had their eyes locked on health care and the economy and citizens, retreating indoors, witnessed an unknown virus upend their everyday lives, Willems and his colleagues saw another storm coming.

Sinking goals

A social worker in the City of Brussels’ Public Centre for Social Welfare (CPAS/OCMW), Willems watched the number of new case files for financial aid swell as the days passed under an unprecedented lockdown which, in Belgium and elsewhere, was the go-to measure to keep contagion rates manageable for the public health system, whose anti-austerity cries had gone unheeded for years.

“It’s coming from all fronts — from the low-income earner who had to pay higher bills, the fairground float owner suddenly unable to pay his businesses expenses, to an employee abruptly put on temporary unemployment or a student who is no longer needed for a summer job…,” he said in an interview with The Brussels Times.

Willems coordinates the debt mediation department of the CPAS, a social welfare public service that exists in each of Belgium’s 581 municipalities and provides various social and financial integration services, ranging from welfare checks to one-time material assistance, such as helping a low-income family buy a computer for their child.

Like other countries, Belgium is still reeling from the first wave of the pandemic, which dealt heavy blows to an economy heavily dependent on global trade networks under no single country’s control.

But the aftershocks of the pandemic — which flared up again in the fall— may prove just as costly and its impact may still be felt for generations to come.

Globally, the coronavirus crisis is forecast to deliver a forceful setback to international development goals. A June report by the United Nations University estimates that global poverty could increase for the first time since 1990, setting global efforts to fight it back by as much as a decade.

In Brussels, as the capital city emerged from the lockdown, the individual consequences of months in prolonged confinement began to appear on Willems’ desk: the mental toll of self-isolation, the skyrocketing anxieties brought on by thinning budgets and poor employment prospects, the emotional stress of navigating relationships tested and strained by months-long proximity, and, in the worst cases, the consequences of physical, emotional or financial abuse.

As the days of lockdown trickled into weeks and then months, the welfare office in Brussels registered a surge in requests for economic assistance, compounding a steady rise in demand already recorded by the service over the past few years.

As of June 2020, roughly a month after the country began easing out of lockdown, some 12,500 persons were registered with the city’s social services office or had applied for some kind of assistance.

To help the service face the surge in demand, welfare offices across Belgium received a boost in the form of increased subsidies, part of a raft of relief measures from the federal government in an effort to plug the gaping revenue gaps that were sending the budgets of everyone from big corporations to ordinary workers into a tailspin.

Out of the total €114.9 million unblocked for all the CPAS in the country, the City of Brussels received roughly €4.5 million, the fourth-highest sum among all CPAS in the country, behind Liège’s (€7.5 million), Antwerp’s (€5.7 million) and Charleroi’s (€5.2 million).

The demand for social assistance has surged to unprecedented numbers all over the country in recent months. © Belga

The additional funding, Willems said, would be enough for the city’s CPAS to give an extra €50 per month to their existing beneficiaries until the end of December, acknowledging that although it brought them some relief, it was ultimately a stopgap solution, which insufficiently took into account the concrete realities of many struggling to keep their heads above the water in regular times, let alone throughout an economy-crippling pandemic.

“At the same time as households’ revenues plummeted, many saw their living expenses climb,” he said. “Having three kids always home, for example, means higher utility bills. We also know that the cost of food and basic necessities in supermarkets spiked and that there is increased use of telecom services… it’s a whole series of small expenses that, put together, can really weigh down on already strained family budgets.”

The subsidy would also be put to use by the office to bolster and develop additional aid programmes, including a reach-out operation for the new publics affected by the pandemic, those who find themselves in need of help but do not know how or where to get it.

According to a study published in early July by Perspective.Brussels, by April, only a month into the lockdown, nearly 76,000 employees in the wider Brussels-Capital Region had already applied for temporary unemployment benefits.

Additionally, by the same date, 46,585 people running a small or microenterprise under Belgium’s self-employed, or independent status, had applied for government support to make up for the loss of partial or all revenue.

The report by the agency, which fleshes out urban development strategies for the capital region, was commissioned by the regional administration with the view of crafting a “reboot and redeployment” post-lockdown strategy capable of delivering a short-term economic reboot while still keeping the regional government on track to meet the ambitious sustainability goals it announced after taking office last summer.

But the same report warns that the rush to get the economy back on its feet “as quickly as possible” could jeopardise the government’s capacity to fulfil its much-touted social, economic and environmental sustainability agenda.

And even without the counterproductive effects that a rush to business-as-usual would bring, the post-Covid-19 landscape forecasted in the report predicts that, in the best-case scenario, at least 10,000 new jobseekers will be added to the unemployment ranks in 2020 alone — meaning officials seeking to boost the region into new standards of sustainability are about to dive into much murkier waters.

Fragile

In July, a policy contribution paper by the Bruegel Institute, a Brussels-based think tank specialising in European economic policies, found that, two years before the coronavirus crisis hit the Continent, “a substantial share” of median-income households in the EU were already unable to shoulder a significant and unexpected expense.

The report, which aimed to gauge the financial ability of median EU households to cope with unexpected expenses, such as those brought on by the current pandemic, found that “in some EU countries, many households had savings equivalent to just a few weeks of basic consumption.”

For its assessment, the paper used the concept of household financial fragility, first devised by Italian economist Annamaria Lusardi in the aftermath of the 2008 financial crisis in the United States.

At the time, Lusardi, who co-authored the Bruegel report, asked American families how confident they were in their ability to come up with $2,000 within a months’ time if an unexpected need arose. In the post-crisis context, as many as half of surveyed families said they would be unable to gather the sum.

“During the financial crisis, we were all looking at banks as the source of instability — all the trouble came from banks,” Maria Demertzis, the deputy director of Bruegel and a former EU Commission official, told The Brussels Times.

“But Lusardi looked at households who could not make ends meet as an added source of wider financial instability,” said Demertzis, who also co-authored the report.

Lusardi’s exploration of household’s financial resilience also allowed for the later assessment that, even as the US economy progressed, in February 2020 — when unemployment sat at just below 4% before ballooning to 10% in pandemic-hit July — nearly 30% of American households remained financially fragile, suggesting that, even as indicators boast a healthy economy, there remains a “sizeable group” of households who will be “disproportionately affected by shocks and changes in policy.”

In the EU context, the Bruegel report drew from the 2018 edition of the EU statistics office’s survey on Income and Living Conditions, in which respondents were asked to self-assess their ability to meet an “unexpected and required expense” through their own resources. The authors chose the year 2018 because it saw moderate growth in Europe and “importantly, was not a period of specific financial stress.”

The amount in question varied from country to country but represented a sum necessary to cover, for example, “an unplanned surgery, a funeral, major home repairs or the replacement of a durable good such as a washing machine or a car.”

The report surveyed median EU households and only took into account their ability to draw from liquid assets to meet the expense, not taking into account other wealth indicators such as owning properties or other financial assets, with Demertzis saying that having to draw on those to meet an unexpected expense would still underscore some degree of financial distress.

With 25% of its households identified as financially fragile, Belgium stood below the EU and EEA average, while, at 35%, the pre-Brexit UK had an above-average level of household financial fragility.

Overall, an assessment of the survey’s figures since 2009 and until 2018 showed that the EU-area average of household fragility has remained “broadly constant” at around the 30% mark. Further, in over half of member states, the median value held in bank accounts — current and savings accounts combined — was less than €5,000.

“What is very interesting here is that this study is about the median households — we are talking about the EU’s middle class,” Demertzis said. “So, if the middle class is not as safe against shocks as it may appear to be, then let alone the poorer households.”

In Brussels, the Perspective.Brussels report found that, before the coronavirus hit the regional economy, one-third of residents already earned a salary inferior to the at-risk-of-poverty threshold.

The regional agency found that 34% of households in the region had reported a loss of revenue between April and May, only the first two months since the all-out lockdown was imposed in mid-March. Among those households, 14% were already considered as being “extremely vulnerable” to the crisis, since their savings were insufficient to make up for the loss of revenue incurred in the single month of April.

And, in the densely populated Belgian capital, the crisis risks aggravating inequalities in an area already rife with gaping differences in income and quality of life standards.

“Brussels is not Belgium — the average Belgian number will not tell you what is going on in Brussels,” Demertzis said. “Brussels is very vulnerable in comparison to the rest of Belgium, it has some extremely vulnerable areas.”

According to the latest report on the state of poverty by the Brussels-Capital Region’s (BCR) Health and Social Observatory, in 2019, 33% of residents in the capital lived below the poverty-threshold, compared to 10% in Flanders and 22% in Wallonia, a figure which also towered above the national average of 16%.

For Willems, the dishing out of subsidies by the government came as a relief, providing additional resources to public servants like himself to continue identifying and alleviating the hardships of those still sidelined by policies that prioritise keeping the globalised economy churning as welfare and public services trudge and sputter along.

But the additional resources will stretch out only until the end of the year, he said, acknowledging that this crash response to the crisis would fail to bring about the structural changes social workers say are necessary to protect the Belgian capital’s most vulnerable households from sliding into poverty.

“What happens after? We all know that these peoples’ problems will not magically disappear on 31 December 2020 — so, what do we do on 1 January?” he said, also noting that the policy priorities of the as-of-yet-unformed federal government remained shrouded in mystery.*

Both the Bruegel and the Perspective.Brussels report advocate for “policies that tackle causes and not just symptoms,” with the latter pointing to the adoption of a robust policy of “vigorous and accelerated” public investments as a way to simultaneously boost the regional economy in the short term while keeping Brussels region in line with its long term sustainable development goals.

A central demand from the city’s CPAS, echoed in an open letter to Prime Minister Sophie Wilmès in the context of the crisis, is to align the lowest welfare payments with, at minimum, the poverty-threshold, a demand that has gone, as of yet, unheeded.

But, even in their role as the very last bulwarks against extreme poverty in Brussels and wider in Belgium, the impact that the CPAS can have will be determined and circumscribed by the decisions taken at higher levels of government, which, Willems said, must better account for the distressing reality of continuously teetering over the poverty line.

“The average citizen cannot imagine what it is like to live with such levels of anxiety, and, in the context of lockdown, cannot imagine what it could have been like to live in a small and overcrowded apartment, with children at home and wondering how to stretch a thinning income onto the next week, the next month…,” he said. “They may be familiar with the concept of it, but not with its realities.”

Asked whether he thought if those crafting the social policies at a regional and federal level were aware of these concrete realities, he appeared sceptical.

But despite a gloomy forecast for the months and years to come, he said the current moment was crucial for social workers and decision-makers aiming to contain the damages that will emerge when the pandemic’s dust settles.

“We have to be very attentive to it, it’s like this virus, right? We have to follow everything and everyone up close to be able to step in on time and keep things from going under — if we close our eyes to it, it will eventually blow up in our faces.”

By Gabriela Galindo