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Europe is facing an unprecedented wave of high prices, the worst in decades, which has led to dangerous inflation rates that have stretched the purchasing power of Europeans and pushed millions of them below the poverty line.

European Central Banks and economic institutions are talking only about the inflation crisis, which has exceeded the most pessimistic scenarios.

Inflation in the euro area reached more than 5% at the beginning of this year, the highest rate for the European continent in 30 years, and the high inflation figures apply to rich European countries (Britain, Germany, France), and worse in poor European countries as is the case for Lithuania (12%).

Historical inflation

The wave of high prices hit rich countries significantly, especially the richest trio France, Britain and Germany, the latter-the largest economy in the Old Continent - had inflation expectations for 2022 at around 3.7%, before rising to 5.1%, the highest figure recorded in 3 decades.

The same is true for France, where inflation was expected to be around 2.8%, before the start of 2022 rose to 3.3%.

In Britain, the British central bank forecast inflation at 5.4% to 5.5%, the highest figure since 1992, prompting the central bank to raise interest rates twice in a row in a few months, for the first time since 2004 in order to control inflation.

According to the National Institute for Statistics, this inflation was manifested in the rise of 3 basic components, namely food, fuel and the energy bill, the latter of which is expected to rise in Britain by 50% by April next year.

Poverty threatens millions

The figures of the "Eurostat" Office of statistics of the European Commission show that 35 million European citizens are no longer able to pay the heating bill in their homes, and that they have to choose between buying food or paying the gas bill, and the same figures show that a quarter of the population in a country like Bulgaria are no longer able to provide heating to their homes.

Because of this wave of costs, 15 million Europeans benefit from the Food Bank of the European aid fund, a figure that has not been recorded for more than two decades.

European Commission figures show that this situation has contributed to an increase in the number of Europeans at risk of falling below the poverty line, for example, in Greece, 7 million citizens are at risk of poverty, the same number as in Lithuania, and 11 million in Bulgaria.

In rich countries such as Germany, some 3.5 million Germans are at risk of poverty, in France 2.1 million citizens, in Italy more than 5 million citizens are haunted by poverty, and in Spain 4.6 million.

What causes inflation

Many factors contributed to the inflation suffered by the world in general and Europe in particular, including the corona epidemic and high energy prices, but a survey conducted by "CFM" (CFM) on the causes of inflation in Europe showed that 77% of British businessmen blame the problems in global supply chains.

This crisis began with a significant shortage of electronic components and automotive chips, before the matter was applied to supply trucks, which led to the disruption of production, and in the face of the "explosion of demand for the post-global shutdown" led to higher prices.

No solution in sight

According to the forecasts of the European Commissioner for the economy Paolo Gentiloni, inflation will continue to rise in the European region until the end of the summer, due to two main reasons: the supply crisis and the rise in gas prices, and now added to the Ukrainian crisis and the spectre of war.

According to the European Commissioner for the economy, the rate of inflation will remain above 3% during the third quarter of the current world, before falling to 2.1% in the last quarter of 2022, and this forecast is based on the possibility of falling energy prices by spring and overcome the Ukrainian crisis without a war.

The British central bank has set a more pessimistic scenario, asserting that inflation will not return to the 2% level until 2024.

Limited assistance

Inflation is at the top of the agenda of European governments, and they are trying to mitigate it on the pockets of citizens, knowing that it is a radical solution that may exceed it and linked to volatile global conditions, for example, Britain announced that it will exempt citizens who pay tax on housing by about  220 dollars, so that they can cope with the upcoming rise in the energy bill.

In France, the government announced that it is considering exempting 80% of French homes from the housing tax, and keeping it only for the wealthy group, which makes up 20% of the French, and this decision will be implemented in stages.

In turn, the German government is considering introducing facilities on energy bills and VAT, and issuing immediate assistance to poor families.