Europe is wondering whether life will ever return to what it once was, as rising prices, insecurity and fear of the future increasingly squeeze what remains of the middle class
The electricity bill, rent, food, fuel… there is hardly any expense in the life of the average European that hasn’t become heavier in the past three years. The feeling that “life is harder” has penetrated everyday speech, from supermarket checkouts to family tables. What’s even more depressing is the impression that this is the new standard, not a temporary phase. A more modest life, constant saving, less security, more fear of tomorrow.
But feelings and numbers are not the same thing. Europe has entered a period of what Brussels bureaucracy calls a “polycrisis”: the pandemic, the war in Ukraine, the energy shock, inflation, geopolitical decoupling from Russia, all amid growing tensions between the West and the rest of the world. In such a whirlwind, perception can easily become darker than statistics—or the other way around. It is crucial to understand whether the average European today is truly poorer than before COVID and the war, or simply living in a more expensive and more anxious world.
The generation raised in the belief that the European project is synonymous with a stable job, cheap gas from Russia, open borders and a relatively predictable life is, for the first time, seriously considering that their children may live worse than they do. This is the emotional backdrop to the debate over inflation, wages, the “disappearance of the middle class,” the rise of the right and the fear of artificial intelligence—topics that are no longer abstract but intersect with every family’s economy.
If we start from the “hard” data, the story looks like this: after a relatively calm decade, inflation in the eurozone exploded and reached a peak of around 10.6% in October 2022, the highest level in several decades, driven primarily by energy and food. At the same time, wages were rising more slowly. Real wages—wages adjusted for price growth—fell by about 3.7% in the EU in 2022, and at their worst point were more than 5% lower than a year earlier. On paper many people received raises, but with those wages they could buy less than before.
The good news is that the decline did not continue at the same pace. As inflation began to ease in 2023 and 2024, nominal wages in most countries finally started rising faster than prices. According to recent analyses, by early 2025 real wages in the eurozone had almost returned to their late-2021 levels. They are still roughly half a percentage point below that mark, but the worst blow has been recovered. Statistically speaking, the average European is only slightly poorer than at the start of the war in Ukraine—after a very painful 2022.
However, the average is often a poor guide to real life. While some countries, such as Belgium, Romania or Slovenia, recorded a strong recovery in real wages in 2023, others (Italy, Czechia, Malta) still saw declines of over 4%. Moreover, everyday-life inflation was higher than the official average for many households. If you live in a poorly insulated apartment, drive an older car, and spend most of your income on food, energy and rent, your personal inflation was far more brutal than the European average of 8 or 9%.
This explains why sentiment surveys are so bleak. As early as the end of 2022, the Eurobarometer was already recording what the media called the “polycrisis mood.” Almost half of citizens said their standard of living had already fallen, and nearly 40% expected it to fall in the coming year. An overwhelming majority—over 90%—said they were worried about rising prices, and a significant portion admitted they at least occasionally struggled to pay monthly bills. Europe may statistically be only slightly poorer, but it feels much poorer.
Later surveys did not bring optimism either. In extensive polls during 2023 and 2024, majorities in large Western European countries believed that the national economy had worsened and would continue to worsen, while only a minority expected an improvement in their own finances. Interestingly, about 60% of citizens simultaneously said they remained “optimistic” about the future of the European Union as a political project. The combination of personal anxiety and abstract faith in “Europe” creates cognitive dissonance: the system itself is not yet being questioned, but trust that it protects your concrete life is weakening.
So the question is: is this heading toward something better, or is “harder living” truly the new norm? There are reasons for cautious hope. Inflation has come down from double-digit levels to much more modest rates, and European forecasts predict it could approach the targeted 2% in 2025–2026. Real wages are rising again, albeit slowly, and unemployment is historically low—around 6% at the EU level—far from the mass unemployment remembered from Southern Europe’s crises a decade ago. The labor market, despite all the shocks, is holding for now.
Clearly, mentioning employment without mentioning migrants would be an omission. The reality of today’s European labor market cannot be understood without the role of migrant workers, who for years have been a key shock absorber of the European economy. From logistics and construction to agriculture and elder care, migrants are the ones filling sectors hit by labor shortages. Their presence keeps unemployment low and prevents the collapse of entire industries. These are simply facts.
But this dynamic has another side. While migrants stabilize the labor market, they also put pressure on systems already stretched to the breaking point—housing, public healthcare, schools. Not because they caused the crisis, but because they arrive in a structure that has been neglected for decades. Right-wing parties skillfully exploit this mismatch. The illusion that immigration worsens living conditions persists, even though the fundamental problem remains the same: decades of underinvestment in public services and a cost of living that has risen faster than wages.
The right and capitalists always go hand in hand. If today’s right-wing rhetoricians were to take power tomorrow, they would likely bring in even more migrants, not expel them. Why? First, powerful construction companies wouldn’t allow otherwise, nor would other industries. And the individuals who are increasingly anti-migrant still vote for political options that massively—often uncontrollably—bring migrants in (all in the interest of big capital). Thus the electorate is, at the very least, “confused” and does not understand the causes and consequences, and unfortunately this will remain so for a long time.
On the other side stand structural shocks that won’t disappear overnight. Europe cut its dependence on Russian gas at record speed. The share of Russian gas in EU gas imports fell from around 45% in 2021 to about 15% by 2023, but the price of that “liberation” is permanently more expensive energy. Cheap Russian gas was replaced by costlier LNG from the US and Qatar and increased reliance on Norway and other suppliers. Meanwhile, the EU’s energy import dependency has jumped to over 60%. This means that for some time energy bills—and thus industrial costs—will stay higher than before the sanctions period.
There is also accelerated militarization. Under NATO pressure and fear of Russia, European states increased military spending by about 13% in 2022, and total spending in Western and Central Europe reached levels higher than at the end of the Cold War. Multi-year purchases of tanks, fighter jets and cruise missiles have been announced. In addition, the EU and individual member states have mobilized nearly 200 billion dollars in financial, humanitarian and military aid for Ukraine. All this may be politically and morally justified within the official narrative, but economically it means that huge sums that once went to public healthcare, schools, welfare or infrastructure are now swallowed up by security and rising interest on growing public debt.
It is entirely logical that such a combination of pressures—more expensive energy, high inflation, costly defense and stagnant growth—feeds a political shift to the right. Ahead of the 2024 European elections, polls showed that “rising prices and the cost of living” were the most important issues for voters. In an atmosphere where traditional centrist parties repeat the same recipes of deregulation, market competition and “necessary reforms,” while failing to protect the standard of the majority, it is no surprise that some voters move toward the radical right and populists who offer simple solutions—often linking economic fear with xenophobia and anti-immigrant rhetoric.
Behind these political shifts lies a slow but persistent thinning of the middle class. EU analyses show that the share of the population in middle-income groups declined in about two-thirds of member states between 2006 and 2021. This isn’t a collapse, but the trend is clear: fewer households feel “comfortably middle class.” At the same time, the risk of poverty has increased, especially at the bottom of the ladder. Housing costs are crucial: in the last twenty years, property prices in the EU have surged by around 50%, and rents by a quarter—much faster than wages. For many young people, the idea that they’ll earn their way to a decent apartment in a major city has become an illusion.
When the middle class starts fearing downward mobility, something sociologists call status anxiety arises. Studies from Western Europe show that those who see themselves as the “threatened middle class”—neither low enough to benefit from classic social policy nor high enough to be protected—are the most likely to vote for the radical right. It’s no coincidence that parties of this type increasingly speak in their campaigns about “small people trampled by global elites,” offering both economic discontent and cultural fears about migration and identity.
In this mix of fear and insecurity, another factor emerges: artificial intelligence. For now, AI is not the main cause of Europe’s economic problems; inflation and energy have far greater effects. But psychologically, AI has a strong impact. Surveys show that two-thirds of workers in Europe expect that AI will mean “fewer workers will be needed.” In southern states, where labor markets are already fragile, this fear is even greater. Meanwhile, large corporations have already launched waves of layoffs, mostly in office, so-called “white-collar” jobs, explaining that algorithms will take over part of the tasks.
Interestingly, overall employment is still not falling dramatically. There are still more people employed than before the pandemic, and sectors introducing AI often continue hiring. The real blow may come in a few years if AI seriously erodes entry-level, routine jobs—precisely those entry points into the middle class that generations of Europeans have taken for granted. The EU is trying to respond through regulation (the AI Act) and retraining programs, but if economic growth remains modest, each newly lost job will hurt more.
In the end, we return to the initial question: Will a “harder life” remain forever? The numbers suggest that the worst inflationary shock is passing: real wages are recovering, inflation is falling, mass unemployment is not on the horizon. Yet the very architecture of Europe’s economy is changing: no more cheap Russian energy, a long energy transition ahead, rising military spending, and global tensions meaning less stable supply chains. On top of that comes technology that promises higher productivity but potentially less need for human labor.
This does not have to automatically mean permanent impoverishment, if we look strictly at numbers. It could mean a different distribution. If Europe decides that the benefits of higher wages, automation and geopolitical adjustments should go toward public services, housing, shorter working hours and a stronger welfare state, then the “harder life” can turn into a transitional period we’ll remember as tense but temporary. Clearly, many will quickly note that this “glimmer of optimism” unfortunately has a large brake—the political one. If the prevailing logic is that the costs of sanctions, militarization, the green transition and technological changes are borne primarily by workers and the middle class, then the new norm will indeed be more work, less security, and instability everywhere.
In other words, the answer lies not only in inflation, but above all in political decisions. Europe must decide whether it wants to remain a continent with a relatively broad middle class and a social state, or adopt the American model of deeper inequalities, a more expensive life and constant struggle for status. The current direction—expensive energy, rising military budgets and slow redistribution—pushes toward the latter. But this is still not fate, but a choice. However, we are very close to the point where it will become fate—and then there will be no easy way back (if such a path even remains).
How aware of all this is the average European? Surveys and statistics rarely tell us. We might conclude that this awareness, however paradoxical it sounds, is “subconscious.” People want to stop the negative processes, but they’d rather be served quick solutions—and the right easily picks up new supporters. But rhetoric is rhetoric and does not bring solutions. Europe needs much deeper self-examination. The first and biggest step should be a complete abandonment of the current “we are preparing for war with Russia” plan, because it erases any fragments of optimism we manage to gather. Even without it, it wouldn’t be easy to return Europe to a path of stability and genuine social sustainability; with it, it is impossible—at least not in the long run. Militarism can stimulate industry, but in the end it will also unleash the far more unpleasant consequences it was preparing for.
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