The first in-depth examination of the impact of austerity policies on people in the five EU countries worst affected by the economic crisis concludes that the policy of prioritising austerity is not working.
Ireland, Greece, Italy, Portugal and Spain are the focus of the Caritas Europa study, entitled "The Impact of the European Crisis", published today.
Using EU statistics, the report highlights historically high levels of unemployment in Europe, with more than 10% of the labour force out of work.
Among them is an entire generation of young people, with one in two unemployed in Greece and Spain.
It points to children being at a greater risk of poverty or social exclusion than the rest of the population in 21 of the 25 member states.
The study strongly challenges current official suggestions that the worst of the economic crisis is over.
It presents a picture of a Europe in which social risks are increasing, social systems are being tested and individuals and families are under stress.
The report highlights the extremely negative impact austerity policies have on the lives of vulnerable people, and reveals that many others are being driven into poverty for the first time.
The report's main conclusion is that austerity is not working and an alternative is needed.
It points out that the authorities have choices that they can make in deciding what policy approaches to use, and how various measures are targeted.
It makes a series of recommendations, including that EU funds play a bigger role in addressing poverty, and that social monitoring should be put in place for countries in EU/IMF programmes.
The Caritas group represents 49 Catholic relief, development and social service organisations in 46 countries.
Secretary General of Caritas Europe Jorge Nuño Mayer warned that austerity policies are creating structural poverty in Europe, leaving a younger generation with poor prospects of future employment.
Speaking on RTÉ's Morning Edition, Mr Mayer said it shows the austerity policies are not working.
"Through these political austerity measures politicians are creating a structural poverty, a structural unemployment and we will have a lost generation of young people who won't find a job because they have no possibility to work and no possibility to develop their employability," he said.
The report makes a series of recommendations including that EU funds play a bigger role in addressing poverty.
Mr Mayer said that a Europe-wide approach is essential.
"We need a new European leadership, we need a European solution, the crisis is now a European crisis. There are main effects in these five countries, in Ireland, Portugal, Spain, Italy and Greece, but we see that the problems are swooping over to the other countries," he said.
"There are solutions. We need structural funds to be invested in more employment and anti-poverty measures, but also we need a better solution of the debt crisis, we need that the decisions are not simply cutback, cutback, cutback."
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