middle streets Europe they begin to boil again, shaking with a palpable discomfort from the increase. cost of living, impoverishment workers and one narrow horizon with little sign of recovery due to the legacy of the pandemic and the ongoing technological revolution. Millions of people have taken to the streets in recent weeks. Inside Germany This week it paralyzed public transport to demand livable wages in what has been described as the largest strike in three decades. Inside United Kingdom For months, teachers, civil servants, nurses or railway workers have been exhausted. Something similar to those Portugal, Holland And Belgiumin social peace France burning in its pots as a result of pension reform.
This social anger He trades on the rise on a continent over which his herds have flown for three years. black SwanA metaphor used by economists to refer to unforeseen and unexpected events that have a great social impact. First coronavirus pandemic; later, Russian invasion of Ukraine and now renewed turmoil in the financial system. Each of these crises has had myriad consequences, serving as a breeding ground for the shocking moment many countries are experiencing. Not much different from what happened during 2022. Triggers are a little different. If denied in France increase in retirement age imposed by the president Emmanuel Macron with almost no social dialogue, the rest, loss of purchasing powerseverely crippled by the general rise in prices.
“There are two things here: the legacy of Covid and inflation“, says the Belgian economist André SapirRomano Prodi was the financial adviser to the European Commission at the time. “There were some occupations that kept the economy afloat during the pandemic process and they did not get their money’s worth. In other words, the disease already existed, and inflation followed, even though it was not enough to mobilize people,” adds Bruegel from the think tank. Inflation is a difficult foal to contain. It destroys everything in its path. punishes fees And saving. And although it does not discriminate, it punishes the low-income population in particular.
last year Annual inflation in the euro area It more than doubled with 9.2%. average increase in wages 4% in the same period. “Wages have long stagnated in the developed world, one of the causes of this widespread inequality and that adds to the discomfort. low wages” assures Xose Carlos Arias Professor of economic policy at the University of Vigo. In line with the position he has held for months European Central Bank (BCE), Arias argued until recently that it was not the time to increase payrolls and salaries. Historical experience – he points out – suggests that inflationary periods can solidify when cost-price spirals are accompanied by significant increases in wages.
business benefits
But the data caused him to change his mind. The ECB itself, by the end of 2022 business benefits was the main factor in its rise. inflationary pressuregrowing profits despite lower costs energy costs, initially responsible for the rise in prices. “This shows that some manufacturers are exploiting the uncertainty created by high inflation and the mismatches between supply and demand. expand margins “It’s more than necessary to cover the rise in costs,” the ECB said in a statement this month.
This observation contributes to nurturing the emotion. inequality This is what prevails among citizens who see how the benefits of energy companies, banks or agri-food companies are growing rapidly and their lives are becoming more and more prohibitive. Only seven EU countries unexpected income taxbetween them Spain. “Workers are the victims of this crisis, not the causes,” he says via email. Ignacio doresteAdvisor to the European Trade Union Institute, a think tank of the European Trade Union Confederation. “No one should take advantage of take advantage of this crisis. Precautions should be taken to avoid speculationfor example, by reducing dividends and ending food price speculation,” Doreste added.
Lessons learned from the 2008 crisis
All of these come during the growth period. discrediting the ruling elitereflected in its rise. extreme rightDespite the fact that the response of European governments these three years has been much more generous to the most vulnerable workers and families than it was after the 2008 financial crisis. “There is discontent in many countries because part of the population is either turning their back on the Government or feeling vulnerable to a horizon where more and more sacrifices are being made,” he says. Marcel JansonEconomist from the Autonomous University of Madrid.
But some of these sacrifices are inevitable, according to the experts consulted. either keep retirement sustainability enough to cover the initial cumbersome cost ecological transition. And the problem is that the starting point is bad because, as Jansen points out, most European societies are very old and state coffers indebted a lot with the series of crises of the last fifteen years. “For a long time, precautions were avoided. Now they have become inevitable, but nobody wants to sacrifice themselves,” says the professor at Autónoma de Madrid.
last case Holland is paradigmatic. The coalition decided to cut the government in half. nitrogen emissions produced by agriculture, transportation, or industry and endangering the country’s biodiversity. Proposed with 2030 as target reduce the number of cattle by one third either by payments to farmers or by relocating some farms. However, the Dutch revolted at the ballot box. They voted for one party in the last election this month. populist farmer’s party that he is against these plans and does not exist until 2019. It was the power with the most votes and will now have priority to try to form the government.