The cost-of-living crisis is far from over. It has been a year since the massive inflation surge, extremely high energy and food prices, and limited compensation. More than half of European households struggle to make ends meet. Low-income workers and vulnerable groups are being hit the hardest, but middle-class living standards have now deteriorated too. 

Many conservative policymakers, as well as the European Central Bank (ECB), are disconnected from the reality on the ground and the struggle of workers. Real wages are falling in Europe (recent OECD report), while inflation remains high, with a 7% average level in the Eurozone, and at double-digits in countries outside the eurozone, such as Hungary, with a record 25%.

Workers once again bear the burden of a crisis that they did not instigate, while big businesses make record breaking profits during the current ‘Greedflation’.

In its latest report, the International Monetary Fund shows that over the past two years, rising corporate profits were the largest contributor to Europe’s inflation as companies increased their prices by more than the cost of imported energy. The report also finds that businesses have been more shielded from the cost shocks than workers. Even the ECB has now finally recognised that profits are two-thirds of inflation. 

These findings confirm what industriAll Europe has long been arguing for as part of our ‘Together. In Action. For Higher Wages.’ Campaign : countering the false dominant narrative of wages driving inflation. This inaccurate narrative continues to be present, as employers and conservatives keep pushing for wage moderation.

The European Commission is closing off the tap for investment programmes, despite their proven added value to move the EU successfully and rapidly out of the COVID-19 crisis. The review of the EU’s Multiannual Financial Framework leaves workers and industry behind, as there will not be an EU Sovereignty Fund, or support for households. Ursula von der Leyen, President of the European Commission, instead announced a move towards a ‘security economy’, that reminds many of austerity. 

The ECB’s ongoing interest rate hiking course (3.5% highest level since 2001 and more to follow) is worrying. It puts unnecessary pressure on companies and households and discourages financial support programmes. 

The past few weeks have been marked by massive workers’ mobilisations across Europe, with trade unions at their forefront:

Romania: The biggest general teachers’ strike in the past 18 years, which concluded with a 25% wage increase with immediate effect. Healthcare workers and railway workers, as well as workers in companies in the metal sector, organised spontaneous strike actions. 

Czech Republic: OS KOVO organised a huge protest on 27 June and issued a strike alert to fight against the government’s austerity reform, which includes increased retirement age, lower pensions, higher VAT, and more expensive energy.

Belgium: trade unions organised a protest against recent attacks on the right to strike and achieved the postponement of a reform that would have limited the right of workers to engage in certain forms of protests. 

Finland: the recently elected right-wing government is also planning a reform that would reduce unemployment benefits, decentralise collective bargaining and limit the right to strike. Trade unions are prepared for action if the government follows through with the plans. 

Isabelle Barthès, Deputy General Secretary of industriAll Europe, says:

“We are extremely concerned about the frugal turn which the European Commission seems to be taking with the disappointing announcement regarding the review of the EU budget and the worrying signs coming from the debates on the reform of the European economic rules.” 

“To us, the message is clear: No support for workers and industry in the new budget, and potential rigid caps on Members States’ capacities to invest in the new economic rules. This means ‘Austerity 2.0’. It means that workers are once again expected to foot the bill, while big business is profiteering. But the trade union movement won’t sit and watch the injustice unfolding. Together with the ETUC, we are campaigning against the new wave of austerity which is currently in the making.”