People of European countries are facing severe economic hardship because of escalating energy costs and untamed inflation at a level not seen since the 1970s. They are becoming poorer as they see their purchasing power melt away. Situation is turning odd when adjusted for inflation and purchasing power, wages have declined by about 3% since 2019 in Germany, by 3.5% in Italy and Spain and by 6% in Greece. This has affected the middle-class most. In Brussels, Belgium, one of Europe’s richest cities, teachers and nurses were found standing in line to collect half-price groceries from the back of a truck. The vendor, Happy Hours Market, collects food close to its expiration date from supermarkets and advertises it through an app. Such is the situation for middle classes. Not only that. The French people are reportedly eating less foie gras and drinking less red wine. Spaniards are stinting on olive oil. People of Finland are being urged to use saunas on windy days when energy is less expensive. Across Germany, meat and milk consumption has fallen to the lowest level in three decades and the once-booming market for organic food has tanked. Italy’s economic development minister, Adolfo Urso, convened a crisis meeting in May over prices for pasta, the country’s favourite staple, after they jumped by more than double the national inflation rate.
With consumption spending in free fall, Europe tipped into recession at the start of the year, reinforcing a sense of relative economic, political and military decline that kicked in at the start of the century. ‘TooGoodToGo’, a company founded in Denmark in 2015 that sells leftover food from retailers and restaurants, has 76 million registered users across Europe, roughly three times the number at the end of 2020. In Germany, ‘Sirplus’, a startup created in 2017, offers ‘‘rescued’’ food, including products past their sell-by date, on its online store. In Sweden, People are queuing in the morning at store gates to buy reduced price food items left over from last night. Spending on high-end groceries has collapsed. Germans consumed 52 kilograms of meat per person in 2022, about 8% less than the previous year and the lowest level since calculations began in 1989. Thomas Wolff, an organic food supplier near Frankfurt, said his sales fell by up to 30% last year and removed 33 people hired earlier in the pandemic.
Karim Bouazza, a 33-year-old nurse who was stocking up on half-price meat and fish for his wife and two children, complained that inflation means one almost needs to work a second job to pay for everything. Ronja Ebeling, a 26-year old consultant and author based in Hamburg, said she saves about one-quarter of her income, partly because she worries about having enough money for retirement and spends little on clothes or makeup and shares a car with her partner’s father. The Bank of England’s chief economist warned UK citizens in April last that they need to accept they are poorer and stop pushing for higher wages. IG Metall, Germany’s biggest trade union, is calling for a four-day work week at current salary levels rather than a pay raise for the country’s metalworkers. Working hours have been reduced by around 30% and wages decreased proportionally.
The European Union now accounts for about 18% of all global consumption spending, compared with 28% for America. Fifteen years ago, the EU and the US each represented about a quarter of that total. This once again shows what a grave unending economic crisis ruling imperialism-capitalism is sunk in.
(Based on an article in ‘The Wall Street Journal’ dated 18 July 2023)
Europeans are rattled by high inflation, lower wage and waning income
