IntelBrief: How Will Europe’s Cost-of-Living Crisis Impact Political Stability?

Bottom Line Up Front

• Although general inflation and energy costs have lowered from last year’s record-high peaks, the cost-of-living crisis in Europe continues to impact citizens’ views of government institutions and support for far-right political parties.
• According to the European Central Bank, inflation for the euro area will likely average 5.6 percent this year and will hit low- and middle-income households as persistently high prices for goods and services reduce purchasing power.
• Amid widespread dissatisfaction with national government and EU economic responses, thousands of protestors gathered in Prague in mid-September over the government’s economic management and support for Ukraine.
• The cost-of-living crisis – alongside the contentious and heightened debates over migration – will likely be a determinative factor in upcoming European elections, including Poland’s next month and the European Parliament’s in 2024.