Inflation is now far below the peaks of 10–11%, wages are rising again and unemployment remains relatively low across much of Europe. On paper, this looks like a gradual recovery, but millions of European families describe a very different reality: money simply does not go as far as it used to. The reason is straightforward – lower inflation does not mean lower prices, only that prices are rising more slowly. Between the beginning of 2019 and the end of 2024, the overall consumer price level in the EU increased by roughly 27%, with enormous differences between countries: around 19% in France, 22% in Italy and Spain, 26% in Germany, but about 34% in Bulgaria, 43% in the Czech Republic, 44% in Romania, 47% in Poland and close to 58% in Hungary. The European Central Bank has also noted that food prices in the euro area are now roughly one-third higher than before the pandemic. This is why an official statement that “inflation is under control” can be statistically correct while offering little comfort to a household standing at the supermarket checkout.
Wages have begun to catch up with the accumulated rise in prices, but the recovery remains highly uneven. OECD data show that real wages are once again growing in most European economies, yet in a significant number of countries purchasing power has still not fully recovered to early-2021 levels. Italy remains among the worst affected major economies, while Germany and the United Kingdom have recovered or exceeded part of the losses. Housing has become one of the biggest pressures on the middle class. Between the end of 2024 and the end of 2025 alone, house prices across the EU increased by around 5.5%, while rents rose by 3.2%. Compared with 2015, EU house prices are around 65% higher, with increases of roughly 157% in Bulgaria, 168% in Lithuania, 180% in Portugal and close to 290% in Hungary. This means two families earning the same salary can have completely different living standards depending on whether one already owns its home while the other has to pay today’s market rent or take out a new mortgage.
The answer to whether the rich are getting richer is more complicated than the popular slogan suggests. ECB data show that the wealthiest 10% of households in the euro area own around 57% of total net wealth, while the bottom half of households own only about 5%. At the same time, the wealth of the lower half has also increased in recent years, so the data do not support a simple rule that every poorer household is continuously becoming poorer. The enormous difference lies in the starting point and in the type of assets people own. A family with several properties, shares and substantial savings can benefit from rising asset values and has money available to invest. A household that spends nearly all of its income on food, heating, transport and rent has no comparable buffer. In 2025, the richest 20% of people in the EU received around 4.6 times as much disposable income as the poorest 20%. The ratio was close to 3.3 in Belgium, Slovakia and the Czech Republic, but approximately 6.5–6.9 in Bulgaria, Latvia and Lithuania. Caught between those groups is Europe’s middle class – often too “wealthy” to qualify for substantial state support, but not wealthy enough to ignore mortgages, rent, food, energy bills, insurance and childcare costs.
The social picture differs dramatically across Europe. According to Eurostat, around 92.7 million people, or 20.9% of the EU population, were at risk of poverty or social exclusion in 2025. The proportion was about 29% in Bulgaria, 27.5% in Greece and 27.4% in Romania, compared with approximately 11.5% in the Czech Republic, 15% in Poland and 15.5% in Slovenia. Greece is particularly striking because almost 29% of the population lives in households spending at least 40% of their disposable income on housing. Bulgaria, meanwhile, remains one of the cheapest EU countries in terms of nominal prices, but this does not automatically translate into a high standard of living because incomes are also substantially lower than the EU average. Eurofound data support what many people say in everyday life: in a survey of 27,200 people across all EU countries, 61% of low-income households said they struggled to make ends meet, compared with only 9% of high-income households. Across online discussions in Germany, Britain, Italy, Spain, Portugal and elsewhere, the same stories recur – fewer restaurant visits and holidays, postponed home purchases, anxiety about mortgage refinancing and a feeling that a salary which once represented a comfortable middle-class life now mostly covers basic expenses. These personal accounts are not representative statistics, but they closely echo the trends measured by Eurostat, Eurofound and the ECB.
European governments have responded with higher minimum wages, energy support, tax relief, indexed social benefits and housing assistance. The OECD reports that real minimum wages are now above their 2021 levels in almost all of the countries it tracks with statutory minimum wages, while social transfers measurably reduce income inequality. The problem is that much of the support introduced during the energy crises was distributed broadly rather than targeted specifically at the most vulnerable households, making the measures extremely expensive for public budgets. There is some light at the end of the tunnel: real wages are gradually recovering, the share of people at risk of poverty in the EU has edged lower and the inflation shock is no longer as severe as during its peak years. But prices are unlikely to return widely to pre-pandemic levels. A genuine recovery will come only when incomes sustainably catch up with the new price level. For that reason, perhaps the most accurate description of Europe’s current crisis is not that “all poor people are getting poorer”, but that the freedom once provided by an ordinary household income is shrinking – less ability to save, greater difficulty buying a home and an ever larger share of the family budget being spent simply on maintaining a normal standard of living.
Sources: Eurostat, European Central Bank (ECB), OECD Employment Outlook, Eurofound, European Commission, European Parliament, UK Office for National Statistics (ONS).
