Inflation: How other European countries are struggling with the crisis

IIn May 2022, the inflation rate in Germany climbed to 7.9 percent. Experts see them as a harbinger of further price increases – largely caused by the Russian offensive war in Ukraine. Therefore, before the SPD, Greens and FDP coalition committee, the Union and the German Trade Union Federation have recently called for new relief for the population. Vice President Jens Spahn (CDU) complained that previous traffic light measures “ignored the needs of citizens and businesses.”

With the war in Ukraine, Moscow has backed an energy crisis across Europe, and countries have different responses. However, this is not enough to prevent popular protests everywhere.

Poland

In hardly any other European country is inflation as high as in Poland: According to the Polish statistical office, it was 13.9 percent in May. Experts even expect further increases in the coming months. People in the country already feel the need to spend more. Rent and, last but not least, food, everything became more expensive. The government has therefore introduced an “anti-inflation shield”.

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It includes reductions in VAT on, for example, fuel or gas or financial subsidies for severely disabled households. Price crisis or not – the ruling Law and Justice Party (PiS) is still ahead of the polls. However, it is not certain that this will remain the case if the burden on the population increases. Filip Fritz

Great Britain

The British are not reacting in a British way to inflation, which is mainly driven by high energy prices – they are on strike. The biggest rail strike in 30 years began on Tuesday. Instead of 20,000 trains, only 4,000 ran. The country is paralyzed, which will happen again on Thursdays and Saturdays, and perhaps more often.

With the departure, teachers’ unions and representatives of state health care employees also threatened. With 11 percent inflation forecast for October, Prime Minister Boris Johnson, who is already politically ill, is waiting for turbulent times.

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Compensation payments of the equivalent of 17.5 billion euros have not yet given Johnson room. This is financed by special taxation of energy companies. £ 400 (€ 465) will be deducted from energy bills for all households in October. Low-income earners will receive a one-off payment of GBP 650 (EUR 756). There are other special payments for the elderly and people with disabilities. In March, London also reduced the tax on mineral oils by the equivalent of 5.8 cents per liter. Stephanie Bolt

Sweden and Denmark

With European inflation of 7.1 and 7.4 percent, northern European countries are slightly below the EU average, but Sweden and Denmark are also feeling the effects of the energy crisis and supply constraints caused by Russia’s war of aggression. In Sweden, however, energy costs have risen sharply last winter. Therefore, in January, the government provided the equivalent of more than 560 million euros to relieve particularly severely affected households.

Stockholm also reacted to high fuel prices: the country with the highest fuel taxes in Europe announced a tax reduction of 1.30 crowns (twelve cents) per liter. It is valid from June 1 and will initially last until the end of October. There is also a compensation payment of almost 100 euros for all vehicle owners in the country.

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Even before the war, Denmark decided to reduce the burden on hundreds of thousands of households. The Danes, who are heavily burdened by energy prices, received around 800 euros with a so-called “warmth check”. A fund of € 33.6 million has also been set up to speed up the replacement of old gas heaters.

In view of the further rise in prices due to the war, Parliament agreed in March to further significantly increase the lump sum. In order to reach even more households, the corresponding maximum income rate has also been increased.

As many as 419,000 households in the country with a population of 5.8 million now use the state energy balance. The Danes, on the other hand, cannot enjoy a fuel discount, with prices sometimes hovering well above € 2. Marc Pfitzenmaier

Italy

Italy introduced a discount on tanks much earlier than Germany: it paid from the end of March and initially worked well. Thanks to a tax credit of 30.5 cents, it kept gasoline prices below two euros for weeks. Around the same time that the German tank discount was introduced, however, the effect of the Italian one diminished and gasoline now costs more than two euros per liter.

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Price jump due to the war in Ukraine

With the increased cost of gas and electricity, the government took action before the war broke out and subsidized the costs of needy end consumers with 30 billion euros. In early March, the government introduced an over-profit tax on energy companies to fund a rescue program.

Many Italians earn so little that Rome had no choice but to introduce discounts. People on low incomes in the country would not be able to afford a double fuel and electricity bill.

Spain

The Spanish government also introduced a discount on petrol on April 1: since then, it has paid drivers at the pump 20 cents less per liter. 15 cents is a tax credit, 5 cents must be forgiven by oil companies. The discount worked well for weeks. But in the second week of June, the price climbed back above two euros and absorbed the government rebate.

Spain has cracked down on rising electricity prices by cutting gas prices: from mid-June, gas used to generate electricity could cost a maximum of € 40 per megawatt-hour for six months.

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The move should subsequently reduce electricity prices for about 40 percent of consumers who have a state-regulated tariff – and are therefore directly linked to the wholesale market price. The discount is valid for less than a week, but it is expected to significantly save more than ten million households. Extensive protests over high energy prices have been repeated in Spain over the past year. Virginie Kirst

France

Fearing a second yellow vest crisis shortly before the election, the French government intervened prematurely. Energy prices have been reduced since the autumn. As a result, electricity and gas prices have risen by a comparatively low four percent since October. Without this state intervention, the price of gas would have risen by 65.5 percent and electricity by 35.4 percent, as calculated by the Energy Regulatory Commission (CRE).

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From the beginning of April, a discount on the tank of 15 percent per liter also applies, which can reach up to 18 percent, depending on the region. The measures should apply at least until the end of the year. Thanks to the ceiling and the rebate, inflation in France is 5.1 percent, which is well below the European average. Martina Meisterová

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