The Wall Street Journal reported, that the Europeans are facing a new economic reality that they haven’t experienced in decades.
The Europeans have become poorer, as they see their purchasing power fading away.
According to the Wall Street Journal report, the French eat less foie gras, drink less red wine, and the Spaniards eat olive oil.
According to the report, the Finns urged to use Saunas on windy days, when energy is less costly.
Across Germany, consumption of meat and milk has fallen to its lowest level in three decades, and the once-booming organic food market has plummeted.
As for Italy, the Italian Minister of Economic Development, Adolfo Urso, held a crisis meeting last May to deal with the prices of pasta, the country’s favorite staple, after it jumped at more than double the national inflation rate.
With consumer spending declining sharply, Europe slid into recession at the beginning of the year, reinforcing the sense of relative economic, political and military decline that began at the beginning of the century, according to the same report.
Europe’s current problem has been accumulating for a long time, and the aging population, which values leisure time and job security over wages, has led to years of slow economic and productive development.
Then came the Covid-19 outbreak, followed by a long conflict in Ukraine.
According to the Wall Street Journal report, the crises have exacerbated problems that had been swelling for decades, by upending global supply lines and driving up energy and food prices, and government responses have only exacerbated the problem.
In order to preserve jobs, the report stated that they have directed their subsidies mainly to employers, leaving consumers without a cash cushion in conjunction with the price shock.
By contrast, according to the Wall Street Journal, Americans have benefited from inexpensive energy and government aid directed primarily at citizens to keep them spending.
And with the slowdown in global trade, according to the newspaper, Europe’s heavy dependence on exports, which represent about 50% of the Eurozone’s GDP, compared to 10% for the United States, has become a weakness.