An unprecedented price crisis... Millions of Europeans are on the brink of poverty

Europe is facing an unprecedented wave of price hikes, the worst in decades, which has led to dangerous inflation rates that have exhausted the purchasing power of Europeans and put millions of them below the poverty line.

There is no talk in European central banks and economic institutions except about the inflation crisis, whose rates exceeded the most pessimistic scenarios.

The inflation rate in the euro area reached more than 5% at the beginning of this year, which is the highest rate for the European continent in 30 years. Lithuania (12%).

historical inflation

The wave of high prices hit the rich countries significantly, especially the richest trio France, Britain and Germany, and the latter - which is the largest economy in the old continent - had inflation expectations for 2022 in the range of 3.7%, before rising to 5.1%, which is the highest number ever. Recorded 3 decades ago.

The same situation applies to France, which was expected to record an inflation rate of 2.8%, before the start of the world in 2022 increased to 3.3%.

In Britain, the expectations of the British Central Bank were indicating an inflation rate of 5.4%, bringing the number to 5.5%, which is the highest number since 1992, which prompted the Central Bank to raise the interest rate twice in a row within a few months, for the first time since 2004 in order to control inflation.

According to the British National Statistics Corporation, this inflation was manifested in the rise of 3 basic components, which are food, fuel and energy bill, and the latter is expected to rise in Britain by 50% by next April.

Inflation in Britain was manifested in the rise of 3 basic components: food, fuel and energy bill (Reuters)

Poverty threatens millions

Figures from the European Commission's statistics office, Euro stat, show that 35 million European citizens are no longer able to pay the heating bill in their homes, and that these people have to choose between buying food or paying the gas bill, and the same figures show that a quarter of the population in A country like Bulgaria is no longer able to provide heating for their homes.

Because of this wave of high prices, 15 million Europeans benefit from the food bank of the European Aid Fund, a number that has not been recorded for more than two decades.

European Commission figures show that this situation has contributed to an increase in the number of Europeans at risk of falling below the poverty line. In Greece, for example, 7 million citizens are threatened with poverty, the same number recorded in Lithuania, while it rises to 11 million in Bulgaria.

In rich countries such as Germany, about 3.5 million Germans are at risk of poverty, in France 2.1 million citizens, in Italy more than 5 million citizens are haunted by the specter of poverty, and 4.6 million in Spain.

What are the causes of inflation?

Many factors contributed to the inflation that the world is suffering from in general and Europe in particular, including the Corona epidemic and the rise in energy prices, but a survey conducted by the CFM Foundation on the causes of inflation in Europe showed that 77% of British businessmen blamed the Problems in global supply chains.

This crisis began with the great shortage of electronic components and car chips, before the matter applied to supply trucks, which led to the disruption of production, and in front of the “explosion of demand for the post-global closure” that led to an increase in prices.

The rise in energy prices contributed to the increase in inflation suffered by the world in general and Europe in particular (Al-Jazeera)

No solution in sight

According to the forecasts of the European Commissioner for the Economy Paolo Gentiloni, the inflation rate will continue to rise in the European region until the end of the summer. This is due to two main reasons: the supply crisis and the rise in gas prices, to which are now added the Ukrainian crisis and the specter of war.

According to the European Commissioner for the Economy, the inflation rate will remain above 3% during the third quarter of the current world, before declining to 2.1% in the last quarter of 2022, and these expectations are based on the possibility of a decline in energy prices by the spring and overcoming the Ukrainian crisis without a war .

As for the British Central Bank, it has set a more pessimistic scenario, as it confirmed that the inflation rate will not return to the level of 2% until 2024.

Limited Aid

The inflation file is at the top of the agenda of European governments, and they are trying to reduce its severity on the pockets of citizens, knowing that it is a radical solution that may exceed it and is linked to volatile global conditions. For example, Britain announced that it will exempt citizens who pay the housing tax by about $220, so that they can face The expected rise in the energy bill.

As for France, the government has announced that it is considering exempting 80% of French homes from the housing tax, and keeping it only for the rich category, which constitutes 20% of the French, and this decision will be implemented in stages.

In turn, the German government is studying the adoption of facilities on energy bills and value-added tax, and the issuance of immediate aid to poor families.