From: lessgovt@gmail.com   
      
   Europeans Are Becoming Poorer. ‘Yes, We’re All Worse Off.’   
   By Tom Fairless, July 17, 2023, WSJ   
   Europeans are facing a new economic reality, one they haven’t experienced in   
   decades. They are becoming poorer.   
      
   Life on a continent long envied by outsiders for its art de vivre is rapidly   
   losing its shine as Europeans see their purchasing power melt away.    
      
   The French are eating less foie gras and drinking less red wine. Spaniards are   
   stinting on olive oil. Finns are being urged to use saunas on windy days when   
   energy is less expensive. Across Germany, meat and milk consumption has fallen   
   to the lowest    
   level in three decades and the once-booming market for organic food has   
   tanked. Italy’s economic development minister, Adolfo Urso, convened a   
   crisis meeting in May over prices for pasta, the country’s favorite staple,   
   after they jumped by more than    
   double the national inflation rate.   
      
   With consumption spending in free fall, Europe tipped into recession at the   
   start of the year, reinforcing a sense of relative economic, political and   
   military decline that kicked in at the start of the century.    
      
   Europe’s current predicament has been long in the making. An aging   
   population with a preference for free time and job security over earnings   
   ushered in years of lackluster economic and productivity growth. Then came the   
   one-two punch of the Covid-19    
   pandemic and Russia’s protracted war in Ukraine. By upending global supply   
   chains and sending the prices of energy and food rocketing, the crises   
   aggravated ailments that had been festering for decades.    
      
   Governments’ responses only compounded the problem. To preserve jobs, they   
   steered their subsidies primarily to employers, leaving consumers without a   
   cash cushion when the price shock came. Americans, by contrast, benefited from   
   inexpensive energy and    
   government aid directed primarily at citizens to keep them spending.   
      
   In the past, the continent’s formidable export industry might have come to   
   the rescue. But a sluggish recovery in China, a critical market for Europe, is   
   undermining that growth pillar. High energy costs and rampant inflation at a   
   level not seen since    
   the 1970s are dulling manufacturers’ price advantage in international   
   markets and smashing the continent’s once-harmonious labor relations. As   
   global trade cools, Europe’s heavy reliance on exports—which account for   
   about 50% of eurozone GDP    
   versus 10% for the U.S.—is becoming a weakness.    
      
   Private consumption has declined by about 1% in the 20-nation eurozone since   
   the end of 2019 after adjusting for inflation, according to the Organization   
   for Economic Cooperation and Development, a Paris-based club of mainly wealthy   
   countries. In the U.S.   
   , where households enjoy a strong labor market and rising incomes, it has   
   increased by nearly 9%. The European Union now accounts for about 18% of all   
   global consumption spending, compared with 28% for America. Fifteen years ago,   
   the EU and the U.S. each    
   represented about a quarter of that total.   
      
   Adjusted for inflation and purchasing power, wages have declined by about 3%   
   since 2019 in Germany, by 3.5% in Italy and Spain and by 6% in Greece. Real   
   wages in the U.S. have increased by about 6% over the same period, according   
   to OECD data.    
      
   The pain reaches far into the middle classes. In Brussels, one of Europe’s   
   richest cities, teachers and nurses stood in line on a recent evening to   
   collect half-price groceries from the back of a truck. The vendor, Happy Hours   
   Market, collects food    
   close to its expiration date from supermarkets and advertises it through an   
   app. Customers can order in the early afternoon and collect their cut-price   
   groceries in the evening.    
      
   “Some customers tell me, because of you I can eat meat two or three times   
   per week,” said Pierre van Hede, who was handing out crates of groceries.   
      
   Karim Bouazza, a 33-year-old nurse who was stocking up on half-price meat and   
   fish for his wife and two children, complained that inflation means “you   
   almost need to work a second job to pay for everything.”   
      
   Similar services have sprung up across the region, marketing themselves as a   
   way to reduce food waste as well as save money. TooGoodToGo, a company founded   
   in Denmark in 2015 that sells leftover food from retailers and restaurants,   
   has 76 million    
   registered users across Europe, roughly three times the number at the end of   
   2020. In Germany, Sirplus, a startup created in 2017, offers “rescued”   
   food, including products past their sell-by date, on its online store. So does   
   Motatos, created in    
   Sweden in 2014 and now present in Finland, Germany, Denmark and the U.K.   
      
   Spending on high-end groceries has collapsed. Germans consumed 52 kg of meat   
   per person in 2022, about 8% less than the previous year and the lowest level   
   since calculations began in 1989. While some of that reflects societal   
   concerns about healthy    
   eating and animal welfare, experts say the trend has been accelerated by meat   
   prices which increased by up to 30% in recent months. Germans are also   
   swapping meats such as beef and veal for less-expensive ones such as poultry,   
   according to the Federal    
   Information Center for Agriculture.   
      
   Thomas Wolff, an organic-food supplier near Frankfurt, said his sales fell by   
   up to 30% last year as inflation surged. Wolff said he had hired 33 people   
   earlier in the pandemic to handle strong demand for pricey ecological   
   foodstuffs, but he has since    
   let them all go.   
      
   Ronja Ebeling, a 26-year-old consultant and author based in Hamburg, said she   
   saves about one-quarter of her income, partly because she worries about having   
   enough money for retirement. She spends little on clothes or makeup and shares   
   a car with her    
   partner’s father.    
      
   Weak spending and poor demographic prospects are making Europe less attractive   
   for businesses ranging from consumer-goods giant Procter & Gamble to luxury   
   empire LVMH, which are making an ever-larger share of their sales in North   
   America.   
      
   “The U.S. consumer is more resilient than in Europe,” Unilever’s chief   
   financial officer, Graeme Pitkethly, said in April.   
      
      
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