seminar on “ household over-indebtedness in the eu in the context of the crisis, the way...
DESCRIPTION
Household over-indebtedness in the EU in the context of the crisis - the state of play - debt advisory services. Seminar on “ Household over-indebtedness in the EU in the context of the crisis, the way forward” 6 December 2011, Brussels European Parliament Hans Dubois Eurofound - PowerPoint PPT PresentationTRANSCRIPT
Household over-indebtedness in the EU in the context of the crisis
- the state of play -debt advisory services
Seminar on “Household over-indebtedness in the EU in the context of the crisis, the way forward”
6 December 2011, Brussels
European Parliament
Hans Dubois
Eurofound
Living Conditions & Quality of Life Unit
27
73
Report to feel at risk of being over-indebted (%, EU27 population, 2010)
Very or fairlyNot at risk
Source: Eurobarometer 74.1
Feeling in control → well-being
Arrears in the EU (%)
Overall
- Utility
- Mortgage & rent
- Hire purchase
20079.9
7.3
3.3
2.8
‘N’MS
15.0
13.3
1.8
3.5
201011.6
8.8
3.8
3.2
‘N’MS
19.7
17.7
2.2
4.7
Source: Eurostat website, SILC data
• Groups at risk & causes, see Eurofound (2010)*, but large groups: Unexpected unemployed in combination with long-term financial
commitments (e.g. high mortgage); poor & excluded: expensive loans (& informal loans ).
• Social and economic cost beyond the individual Health, unemployment, social housing, lower tax revenue (Hollerweger
and Leuthner 2006; van Geuns et al. 2011).• Solution: holistic approach
Ideal to prevent (school curriculum, consumer credit directive), but unrealistic to rely fully on preventive measures;
rehabilitation important, but often does not solve the cause; an immediate, integrated alleviative response: debt advice
Causes, consequences & solutions
* Working paper (2010) can be downloaded on: http://www.eurofound.europa.eu/areas/socialprotection/householdebts.htm
• Stimulate timely signaling Early-warning systems, e.g. referral by other social service
providers (e.g. “Vroeg Eropaf” [Approaching Early], Amsterdam) Social partners Also: outreach posts, multiple language & media channels,
anonymous first-contact options• Translate into actual access. Problem: waiting lists,
exclusion criteria & non-existence of services. Understandable: limited funds & help those most in need with
highest chance of success Effective referral systems, ‘minimum service systems’, inter-
municipal cooperation
1) Provide timely access
Research report (2011/2) can be downloaded by early 2011 from: http://www.eurofound.europa.eu/If before: ask for an advance draft copy, [email protected]
Quality debt advice
2) A customised, consistent process, relying on trust between the advisor & client... Necessary to understand the full context Credible and well-communicated confidentiality assurance
• ... and cooperation between the advisor & other stakeholders (creditors, welfare offices, health services) Long-term: mutual benefit
3) Provide support while leaving the household in control and having it actively contribute to the solution Key tool: building a reliable payment record, also to guarantee access to
cheaper future credit & as early-warning system Sometimes minimal control necessary: e.g. anonymous food vouchers, utility
payments directly to provider
• Quality assurance: providing organisations & advisors• Increase integration legal, health, welfare and financial help• Housing policies
react swiftly and consistently to emergency situations, for example smoothening the transfer of households to smaller dwelling
• Some service provision overlap is not always bad e.g. state-backed organisations have more legal discretion, and non-
state providers can appeal to excluded groups
• Consumer bankruptcy and legal debt settlement not be too short (inviting for abuse), not too long and inaccessible
incentives to maximise earnings
4) Sound institutions
