On 1 September, the European Think Tanks Group will publish a major report addressed to the new leadership of the European Union entitled "Our Collective Interest: Why Europe’s problems need global solutions and global problems need European action". It calls for a new understanding of the EU’s global role, and in particular, a new approach to international development. The key message is that the EU’s ambitions for its own citizens – for prosperity, peace and environmental sustainability – cannot be divorced from its global responsibilities and opportunities. We identify five global challenges where we believe the EU has a comparative advantage to act and make a positive contribution to the world’s future. These are: trade and international finance; environmental sustainability; peace and security; democracy and human rights; and, poverty and inequality.

In the run up to 1 September, we will be publishing a blog each Monday setting out the context of these five global challenges. Today’s blog, the third in our series, examines inequality.

The full report on 1 September will put forward recommendations for the EU’s engagement in each of these areas and propose organisational and structural changes to enhance the EU’s performance. We believe that this will involve creating a truly integrated, but flexible approach across institutions, and stronger political leadership to enable complex linkages between today’s global challenges and agendas.

Continued economic expansion and general human development have brought poverty down substantially in recent decades. However, progress has been geographically uneven, and economic growth has left large numbers of people in low and middle-income countries living only fractionally above the poverty line.

Discussions on progress towards the MDGs and a new global agenda and framework for development post-2015 have rekindled the debate on how best to tackle poverty and inequality.  There is now substantial evidence to support the argument that growth reduces poverty faster and more sustainably where equality is greater, or if inequality is reduced at the same time.  Redistribution does not need to hamper growth, and inequalities can indeed be tackled.

Tackling poverty and inequality is at the heart of Europe’s own integration project.  It is the main driver of EU’s external action, which promotes a world vision based on the values of social justice and protection, solidarity, and economic, social and territorial cohesion, with an overall objective: the eradication of world poverty.  Indeed, greater welfare and equality beyond Europe is in the EU’s own self-interest: besides contributing to economic growth, investment and improved governance in developing countries, it contributes to achieving EU security, migration and asylum policy objectives. Additionally, efforts in this area help the Union remain a key global player in the provision and protection of global public goods.

Unfortunately, the EU – like other donors - struggles to demonstrate impact on poverty and inequality. Developing a much closer connection between its global poverty eradication objective and its policies across different investments, sectors and actions remains a challenge. Two fundamentals are: the need to pay attention to its own evaluations, which suggest that much work does not contribute significantly to addressing chronic poverty, stopping impoverishment or sustaining escapes from poverty – the objectives which need to be achieved if extreme poverty is to be eradicated; and to base its work on the best understandings of how poverty can be eradicated.