Wage increases, aid... How our European neighbors are reacting to inflation

Mélina Facchin, Benjamin Peter and Anais Cordoba, edited by Gauthier Delomez 10:59 a.m., June 02, 2022

DECRYPTION

All European countries are faced with inflation, which leads to soaring prices in everyday life.

Faced with this, some French companies choose the boost on the payslip of their employees, while wages are no longer indexed to inflation (unlike the minimum wage).

On the state side, aid has also been introduced, such as the 18 cents discount at the pump or the tariff shield on energy.

But what are the solutions adopted by our European neighbors?

Overview of the measures taken in Germany, Spain and the United Kingdom to fight against this inflation which has become galloping since the beginning of the Russian invasion of Ukraine.  

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In Germany, increase in the minimum wage and aid for getting around

First stop in Germany, where inflation is much higher than in France: 7.9%.

The minimum wage will be increased from 9.82 euros to 10.45 euros per hour on July 1, then to 12 euros on October 1.

Also since Wednesday, a discount of 30 cents per liter of gasoline is applied at the pump.

A ticket of nine euros per month is also offered to take all local and regional trains in the country.

These two measures are in place at least until the end of August.

The blocking of energy prices obtained in Spain

In the south of France, in Spain, prices soared even before the start of the war in Ukraine.

From the end of last year, the government lowered the VAT on electricity and increased the minimum wage which, just before the Russian invasion of Ukraine, had just risen to almost 1,200 euros gross.

But since then, inflation has approached 10% in March, a record since the 1980s.

The Spanish State has therefore developed six billion euros in aid, frozen rents and obtained from the European Union the blocking of gas prices used in electricity production.

An exceptional derogation granted by Brussels to the entire Iberian Peninsula obtained thanks to the lack of interconnections of this territory with the rest of Europe.

Portugal and Spain are in fact only connected to France for these resources, and therefore cannot benefit from other sources of energy, particularly from northern Europe.

An exceptional measure, which should reduce bills by 25% to 30%, from which France will therefore, 

not be able to benefit. 

Still, these measures taken by Madrid in favor of purchasing power have not prevented rising prices from remaining the main concern of Spaniards, causing large demonstrations throughout the country.

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The difficulties of the United Kingdom to increase real wages

Last stopover of this overview in the United Kingdom, which is no longer part of the Twenty-Seven but which is also suffering from the rise in prices.

In Great Britain, wages at the national level rose by 5.4% in one year.

In April, the government increased the minimum income from 10.45 euros to 11.15 euros per hour, benefiting 2.5 million Britons.

However, these increases are drowned out by inflation, which is currently hovering at 9%.

According to the National Bureau of Statistics, the real salary of the British, that is to say adjusted to inflation, has never fallen so much in ten years.

Finally, in Italy, inflation reached almost 7%.

It is the only OECD country where the average income has fallen over the past 30 years.

The government called for employing more and paying more.