Latin America: Where from here? The Latin American middle classes facing stagnation - by L.Paramio, C.Güemes, and F..Badia

 What will be the effect of the economic slowdown in trust in institutions and political behaviour of Latin American emerging middle classes, after 10 years of “leftist” governments?

According to CEPAL (Comisión Económica para América Latina y el Caribe, Economic Commission for Latin America and the Caribbean) calculations, between 1990 and 2010 the middle classes in the region increased by nearly 70 million households. In recent years social policies have been characterised by a targeting of lower income groups and public policy priority has been the expansion of primary education, with the goal of achieving universal reach.

Given that the middle classes are characterised by their efforts to consolidate their social status and not only their income level, it can be assumed that access to education is central to their family plans. However, access to primary education, which has been a key factor in many cases to escape from poverty and to lead therefore to the so-called emerging middle classes, may be insufficient if the access to quality secondary education and higher education for the youth of these new middle classes is not guaranteed.

The hypothesis is that the numerical growth of the new (emerging) middle classes will pose new demands for public policies both to expand access to quality secondary and higher education, and to introduce social policies that benefit not only the poorest groups, but also these emerging groups.

The aim of this is to prevent the new middle class losing purchasing power. By moving from the lower-income bracket to the middle class, they no longer to receive the cash transfers attendant in the prior targeted policies, and as a result, it is important to develop universal welfare policies or design strategies that include support for these groups; otherwise, they will be unable to maintain and consolidate their new status and their becoming middle class, beyond a symbolic conquest, will entail instead a waste of money and increased costs for families.

Through a comparative study of several national cases, we have sought to determine (1) the problems that the emerging middle classes face in consolidating their status, (2) the limits in this regard of current public policies, and (3) conflicts which may give rise to claims of these social groups.


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Europe in 2015: A year of insecurity - by Gavin Hewitt

For Europe, 2015 will witness another attempt to reach a place of safety. For the past two years European officials and leaders have declared the economic crisis over. In the past six months a sense of foreboding has returned.

The dangers are not the same as 2012. There is no danger of countries being unable to fund their debts. The threat now is of stagnation and deflation.

European officials have warned time and again that the failure to create growth and new jobs risks not just social tension but support for the European project. Currently the economy will not return to its 2007 level until 2020.

In 2015 economic recovery will be uneven. Demand is chronically weak. Germany will remain the engine room of the European economy but will not be the powerhouse it was two years ago. Growth in France will be around 0.7%. Italy should edge away from recession but the eurozone is not expected to achieve growth of more than 1% and that will not be enough to dent an unemployment rate that remains at 11.7%.

Once again eyes are turned towards the President of the European Central Bank, Mario Draghi. Sometime in the first three months of the year he is expected to turn on the taps, boost demand and buy sovereign bonds. It may not be straightforward however. There is opposition in Germany; there may well be legal challenges and there are doubts over what impact all of this will have.

Read more: BBC News - Europe in 2015: A year of insecurity