The Squeeze of Tightening Budgets: A Look at European Finances

A recent study has revealed that over half of Europeans have experienced a decrease in their financial flexibility over the past three years. The survey, conducted by Ipsos for French Secours Populaire, found that nearly one-third of Europeans are now in a “precarious” financial situation, as their ability to make purchases has declined. This has led to many individuals being forced to make difficult financial decisions, such as skipping meals and limiting essential purchases.

The second European Barometer on Poverty and Precariousness has shed light on the challenging financial realities facing a significant portion of the population. Of the 10,000 individuals surveyed, 29% considered their financial situation to be “precarious,” with any unexpected expense posing a significant risk. Furthermore, nearly half of the respondents expressed concern about the possibility of falling into a precarious situation in the coming months due to rising prices and stagnant pay.

The 2021 at-risk-of-poverty rate for the total population of the EU stood at 17%, as per Eurostat. Only 15% of those surveyed reported feeling confident in their financial stability and expressed a lack of concern about their everyday expenses.

The survey results also highlighted the fact that many Europeans have been forced to make challenging compromises due to their financial constraints. This includes skipping meals when hungry, with almost one in three respondents admitting to having done so. Other compromises cited in the survey include not using heaters, borrowing money, and neglecting to address health concerns in light of rising costs.

A study by the Joseph Rowntree Foundation (JRF) in the UK found that 5.7 million low-income households lacked sufficient funds for food, leading to what has been termed a “horrendous new normal.” The consequences of rising food prices have been far-reaching, with 38% of survey respondents indicating that they are no longer able to afford three meals a day on a regular basis.

The impact of this financial strain is particularly evident among parents, with some reporting that they have had to limit their own food intake in order to provide for their children. In fact, 21% of parents surveyed admitted to experiencing at least one instance of not eating enough in order to ensure their children were adequately fed.

Rising inflation has further exacerbated the situation, with increased food and ingredient prices continuing to place a burden on individuals’ ability to purchase essential goods. Europe’s inflation figures tripled in 2022, reaching the highest growth rate of all time. This has translated into sharp increases in consumer prices for housing, water, gas, and other charges, leaving many individuals feeling the pinch.

The study also revealed that a majority of respondents expressed significant concern about their ability to cope with inflation. Over 50% of those surveyed admitted to worrying about their capacity to manage escalating food, energy, and miscellaneous expenses.

In conclusion, the findings of the survey underscore the significant financial challenges faced by a large portion of the European population. As prices continue to rise and incomes remain stagnant, individuals are being forced to make difficult decisions in order to make ends meet. The prevalence of precarious financial situations and the resulting compromises highlight the urgent need for measures to address these economic pressures.