UPDATE 1-Austerity's children becoming Europe's "lost generation"
* More children on poverty line in five countries
* Poorest in Spain and Greece
* Charity Caritas blames austerity cuts
By Claire Davenport
BRUSSELS, Feb 14 (Reuters) - Children across Europe are being driven into poverty by harsh government austerity and youth unemployment is soaring, threatening to create "lost generations" that could fire up a new continental crisis.
Global charity Caritas said on Thursday that around three out of every 10 children in Greece, Ireland, Portugal, Italy and Spain are in or have been pushed to the brink of poverty.
Greece said its youth unemployment had now exceeded 60 percent. Spain's is above 50 percent and Portugal has just topped 40 percent.
Think tank Bruegel said the problem extended well beyond the debt-laden peripheral euro zone economies and could come back to reverse Europe's slow recovery from financial crisis.
In a report, Caritas said euro zone countries that have received international loans - plus Italy, which hasn't - are creating a huge class of poorly-educated and poorly-fed young people with low morale and few job prospects.
"This could be a recipe not just for one lost generation in Europe but for several lost generations," Caritas said, citing the European Union's own statistics.
While these countries' future workers may suffer a loss of morale, qualifications and prospects, those that struggle through are likely to take their talents elsewhere.
Those with qualifications are already leaving in droves to seek work elsewhere, particularly in Germany where the number of Spanish and Greek jobseekers almost doubled during the first half of 2012.
Bruegel economist Zsolt Darvas said the relentless rise in youth unemployment not only destroyed morale at an important age of development but also threatened to reignite an economic crisis that appeared to be easing.
"This is not just a problem for these (peripheral) countries. This is a European problem," he said. Thirteen of the European Union's 27 member states have youth unemployment above 25 percent.
Since 2010, Greece, Ireland, and Portugal have received billions of euros in loans from the EU and the International Monetary Fund in return for spending cutbacks and tax rises. Spain has had its banks bailed out.
In all four and Italy, the increasing rate of children close to poverty coincides with the height of the crisis in 2008 and then rises.
Caritas say children are becoming more impoverished due to cuts to welfare, unemployment benefits, rising value-added tax and increased fuel costs.
"It has become an established fact that children are more at risk of poverty than any other demographic," Deirdre de Burca from Caritas said.
Figures from the European Commission show that in 2011 over 30 percent of those aged 17 years or under in Spain and Greece were at risk of poverty or exclusion, a four percentage point rise since 2005.
In Portugal that figure was 28.6 percent in 2011. In 2005 Portugal had a similar number of underprivileged children but that figure had dropped to 25.5 percent in 2006. It was linked by the charity to the change there to the growing number of families evicted for not paying mortgages.
More broadly, Caritas reported a growing number of children coming to school hungry in Spain, Portugal and Greece.
In 2010, 37.6 percent of children were at risk of poverty or exclusion in Ireland and 28.9 percent in Italy. Figures for 2011 are not available
Children are defined as nearing poverty and exclusion if they live in families with 60 percent or less the median income or have parents with little or no employment or lack basic essentials such as protein-rich foods, heating and clothes.
Caritas said governments must ask themselves what these trends will mean for children in the long run.
Studies show children from poor households are more likely to underperform at school and to struggle to find or keep a job.
"They are looking at a future where the prospect of unemployment is stretching out ahead of them," de Burca said.
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