Europeans are dramatically cutting back on consumer spending as the combination of inflation and an economic recession leaves them struggling to pay for both staple food products and luxuries, according to The Wall Street Journal.
After the eurozone economy grew just 6% since 2008, the average European Union nation is now poorer per capita than each state in the U.S., with the exception of Idaho and Mississippi, The Wall Street Journal reported. The weak growth has been driven by a variety of societal factors — Europe’s aging population values job security and personal time, hindering economic productivity —but was exasperated by both the COVID-19 pandemic and Russia’s invasion of Ukraine, which crippled the continent’s supplies of both food and energy, sending prices soaring. (RELATED: Putin’s ‘War Economy’ Is Still Fueled By Oil Despite US Sanctions, Experts Say)
Europe’s efforts to recover have been hindered by China’s failure to shake pandemic-induced economic lethargy, undercutting a major market for European exports, according to the WSJ. Roughly 50% of the eurozone’s GDP comes from exports, compared to just 10% for the U.S.
Discount food services, which sell food near its expiration date at a reduced price, have exploded in popularity across the continent, the WSJ reported. Danish startup TooGoodToGo, for example, now serves 76 million registered users across the continent, a nearly 300% surge since the end of 2020.
Thanks to inflation, “you almost need to work a second job to pay for everything,” Karim Bouazza, a 33-year-old Belgian nurse who purchases groceries from Brussels-based discount vendor Happy Hours Market, told the WSJ. Inflation in the eurozone fell to 5.5% in June, from 6.1% in May, with food prices up 11.7% on an annual basis, according to preliminary data from Eurostat, the EU’s statistics office.
In 2008, EU and US had economies of equal size. It’s not even close now.
“the Bank of England’s chief economist, warned UK citizens..that they need to accept that they are poorer and stop pushing for higher wages.”
40-45% goes to taxes.
They’re not even trying anymore. pic.twitter.com/iRH9yF8GAB
— Richard Hanania (@RichardHanania) July 17, 2023
In Germany, meat consumption declined by 8% to 52 kilograms per person — the lowest level since data was first recorded in 1989 — with consumers often opting for cheaper options like poultry as opposed to more expensive beef and veal, the WSJ reported, citing data from Germany’s Federal Information Center for Agriculture. While some of this decline can be attributed to societal trends, such as health and animal rights concerns, the rapid pullback can be primarily attributed to the 30% surge in meat prices, according to the outlet.
Subsidies designed to blunt inflation, including roughly €750 million in energy relief for consumers and businesses, are often fueling inflation thanks to their massive price tags, the WSJ reported. Governments are also widely expected to raise taxes as costs continue to soar, putting additional pressure on consumers in a region where taxes are already higher than normal in the developed world.
“It feels like a perma-freeze in living standards,” Nao Cohen, a 28-year-old public-affairs specialist who lives in London, told the WSJ. She said some of her friends are even freezing their eggs in hopes they can afford children in the future.
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