At the peak of the Euro crisis, Syriza and Podemos shook EU politics to the core with their radical-left critique of austerity. A decade later, they face an uncertain future. Are the two parties’ recent electoral fortunes proof of their failure, or has left-wing populism succeeded in transforming EU crisis management?

The recent general elections in Spain and Greece produced very different results. In Spain, a political debacle at the local level in May led socialist Prime Minister Pedro Sánchez to call a snap election which failed to deliver a clear majority. In Greece, on the contrary, the right-wing government led by Kyriakos Mitsotakis managed to secure a second term in office following two landslide victories in May and June.  

In spite of their obvious differences, both elections shed light on the fragilities of the left-wing experiments that emerged from the euro crisis in 2010, Syriza and Podemos.  

Both parties have gone through a slow decline since their electoral apogee in 2015, when Syriza made it to government and Podemos gathered significant popularity. Last June, Syriza obtained its worst result since 2012 and Alexis Tsipras stepped down as party leader. As for Podemos, after several processes of fragmentation and realignment, it rallied behind Sumar, a new party headed by Labour Minister Yolanda Díaz.  

These developments blur the extent to which, not even a decade ago, these parties were at the centre of profound divisions, both at home and in the EU, regarding the appropriate way of managing the economy and protecting people from the worst consequences of modern capitalism. Their fall in popularity has led to speculation on the possible return to the two-party dominance that characterised both countries since their democratic revolutions, and on the viability of a radical critique of government coming from the Left. 

Party crises and crisis parties

It is impossible to understand the emergence of Podemos and Syriza without looking at the political reconfigurations that followed the global financial crisis in 2008. Their repertoires of collective action through emerging social media (mostly Facebook and Twitter) and the occupation of main squares in the countries’ capitals were to be found in concomitant mobilisations in North America (Occupy Wall Street) or in the Arab Spring.[1] Yet their action was rooted in a deep critique of a distinctively European version of capitalism.  

The EU had reacted to the global financial crisis in its typical manner of “muddling through”. After a few months of enthusiastic discourse on the dangers of unregulated capitalism, which was largely necessary to politically justify the public support of troubled private banks, the continent reverted to the “stability culture” that had reigned since the Maastricht Treaty (1992).[2]

Podemos and Syriza were “crisis parties” that managed to harness discontent with the narrow democratic scope left by the financial and euro crises.

This emerging austerity discourse intensified in October 2009, when the Greek elections gave centre-left PASOK, led by George Papandreou, a resounding majority. The government soon announced that the national deficit predictions made earlier in the year were widely off the mark, and that it would have to borrow over 10 per cent of GDP in 2009. This was the beginning of the “sovereign debt crises” that would ravage the European South in the following years.  

In early 2010, public debt became the main economic and political problem of the EU. The centrist actors that decried the subprime crisis as the ultimate expression of the need to reform global capitalism profoundly were now fully focused on the “irresponsibility”, “profligacy”, or even “fraud” of the southern periphery. The narrative of morally doubtful Greeks soon became one of PIIGS or GIPSIs – the acronyms that added Italy, Portugal, Spain, and (on occasion) Ireland to the grouping of lazy Southerners.  

The framing of the crisis was not, however, merely a European product. The Greek government itself did not primarily point the finger at volatile markets, at the difficulty of running a national treasury when monetary policy is out of democratic control, or at the fundamental fragilities of the monetary union. Papandreou made the much simpler case that domestic policy was to blame. As he put it at Davos, early in 2010, the Greek crisis was “home-made”.  

This was not too dissimilar from the discourse of the Spanish Popular Party (PP) regarding José Luís Zapatero’s Socialist (PSOE) government, or from that of the Portuguese centre-right Social Democrats (PSD) regarding the Socialist (PS) cabinet led by José Sócrates. Cross-accusations of corruption, clientelism, and general bad government were mobilised as explanations for the disruption of the monetary union. Centre-left, centre-right, EU institutions and the International Monetary Fund (IMF) were broadly in agreement: austerity was the effective remedy for these countries’ “past sins”, as German Prime Minister Angela Merkel put it. 

In this world without alternatives, different forms of populism emerged and strengthened across Europe. For if there are no alternatives, very little politics remains, and the capacity of established parties to both capture and guide political conflict wanes. In the case of Spain and Greece, this was not just manifest in left-wing populism, but also in extreme-right nationalism. Podemos and Syriza were “crisis parties” that managed to harness discontent with the narrow democratic scope left by the financial and euro crises. This was condensed in the slogan, widely shared in Spanish streets at the time: “They call it democracy, but it isn’t”. 

Channelling protest 

In January 2015, Syriza won the general elections. By this time, Greece had been governed through a severe austerity programme supported and handled by its traditional parties – PASOK and Nea Dimokratia. Papandreou’s management of the first bailout, whose conditions were remarkably punitive, came to an end when his cabinet suggested a referendum on the Memorandum of Understanding in late 2011. This belated attempt to regain democratic legitimacy for a policy that no Greek had voted for was met with fury by creditors in Paris, Berlin, Frankfurt, Brussels, and Washington. Papandreou stepped down and Lucas Papademos, until then vice-president of the ECB, was appointed head of a caretaker government. New elections were announced, and another austerity programme was adopted, including a concerted, partial default on Greek sovereign debt. 

In 2012 Syriza made its serious entrance. Headed since 2008 by a young Alexis Tsipras, this political formation can be traced back to the 1980s, when a constellation of far-left movements and the Greek Communist Party (KKE) ran on a shared platform. Since the Communists left the alliance, Syriza’s ancestor Synaspismos had little representation – at times failing the 3 per cent threshold necessary to enter parliament.  

In 2004, Syriza emerged as a coalition of far-left parties which eventually managed a modest 4.6 per cent of the vote in the 2009 elections. By May 2012, Tsipras came second in the polls with 16.8 per cent. In the snap elections one month later, Syriza won 26.9 per cent. The traditional bulwark of the Greek Left, PASOK, collapsed electorally but remained in the coalition government led by conservative Antonis Samaras. Syriza effectively became the main opposition party. 

In Spain, the mobilisation against austerity was, at this time, still grassroots for the most part. As in Greece, both the centre-left and the centre-right were tied to the austerity agenda, failing to capture the growing dissent. But the same forms of collective action that boosted Syriza would eventually generate Podemos. In 2011 the Indignados began a series of occupations of squares, the most remarkable being Porta del Sol in Madrid. The same happened soon after at Syntagma square, in front of the parliament in Athens. These protests unfolded in parallel with unprecedented general strikes and demonstrations.  

In 2014, a group of intellectuals headed by Pablo Iglésias and Iñigo Errejón institutionalised the constellation of Spanish protest movements into Podemos. In its first electoral test, the 2014 European elections, the party came fourth and obtained five seats in the EU Parliament. 

In opposition, Syriza and Podemos had broadly aligned platforms: an absolute rejection of austerity, a critique of the functioning of democracy both at home and in Europe, and a general refusal of the forms of neoliberalism embraced (with variations) by mainstream parties.  

At the end of 2014, Greece had lost about a third of its pre-crisis GDP – a degree of economic depression that had not been seen in Europe for generations and that most Europeans arguably failed to grasp. EU Commission President Jean-Claude Juncker, one of the minds behind the Troika arrangements as former chair of the Eurogroup, admitted that the EU had “sinned” against its troubled periphery, especially Greece.  

As the 2015 Greek general elections approached, Tsipras was perceived as the face of an alternative to austerity not just in Greece, but in Europe. Syriza won 36 per cent of the vote and formed an awkward government coalition with right-wing ANEL. 

Syriza’s U-turn 

The story of how Syriza failed to upend austerity is well known. The harsh rhetoric of “ripping the Memorandum apart” translated into a months-long brinkmanship in which the entire edifice of European economic governance was put in question. The “game of chicken” was however faulty, because the only card in Tsipras’s hands was a disorderly default whose political consequences – Greece’s exit from the monetary union – was not truly a viable option.  

The Greek state was thus drained of resources, without real leverage against a united front of creditors but also right-wing governments in the European South, who feared that Syriza’s success would embolden domestic opposition. Even the “independent” ECB warned against the prospect of a far-left victory in Greece, and excluded the country from its programme of sovereign debt purchases from early 2015 onwards, up until the pandemic.  

Under pressure on all fronts, Syriza gave in. The boisterous Finance Minister Yanis Varoufakis was induced to resign, the result of a national referendum on further austerity was disregarded, and a third bailout was adopted. 

Syriza’s argument that its version of austerity was less brutal, or more socially conscious than that of PASOK and Nea Dimokratia, was poor consolation. Tied to official loans from EU creditors with maturities of several decades, Greece’s economy will be under scrutiny for decades, long after the end of “enhanced surveillance” by EU institutions in 2022. Tsipras lost the 2019 election to Kyriakos Mistotakis, and never governed outside the austerity paradigm.  

Contraption government 

Syriza’s U-turn and decline in popularity curbed the momentum of left-wing populism in the rest of the EU periphery. But the waning appeal of Podemos in Spain was still enough to split the Spanish Left in two – a process of fragmentation that found some parallel in the Right with the rise of Ciudadanos and then of Vox.  

The Spanish elections in 2015 and 2016 resulted in unprecedented fragmentation. Mariano Rajoy, who personified the virtues of austerity, came first, but the PP failed to gather a stable majority. Austerity fatigue, corruption scandals, and botched management of Catalonian independentism led to the fall of the fragile cabinet and to the formation of a “contraption” government modelled after the Portuguese one: the PSOE, Podemos, and an array of regional (at times separatist) parties supported a cabinet led by Sánchez, and with Iglésias as vice-president. 

Both Syriza and Podemos emerged in a world in which alternative discourses were hidden in plain sight, waiting to be harnessed and institutionalised.

When it joined the PSOE as a junior coalition partner, Podemos had morphed into a new left-wing coalition with Izquierda Unida (IU), under the banner of Unidos Podemos (later Unidas Podemos). By then, Spain was not under an austerity programme with the Troika, and EU economic governance and monetary policy were less constraining. As in Portugal, this post-crisis government was able to roll back some of the most pernicious features of austerity. Chairing the Social Affairs and Labour ministries, the far left obtained a substantial rise in the minimum wage and a reform of the labour code. Yolanda Díaz, now heading Sumar, was for many the face of these reforms, as well as of the protection of workers during the height of the pandemic.  

Besides the economic agenda, the Spanish Left enhanced the protection of women and LGBTQIA+ communities from violence and discrimination, sparking a furious backlash from ultra-conservatives. The coalition also ordered the removal of Francisco Franco’s remains from their monumental resting place in the Valle de los Caidos, challenging the difficult relationship of the Spanish Right with the dictatorial past. 

Both Syriza and Podemos emerged in a world in which alternative discourses were hidden in plain sight, waiting to be harnessed and institutionalised. This was the fundamental “populist hypothesis” theorised by Spanish leftists.[3] Yet, Syriza failed to translate these discourses into effective action. Podemos, on the other hand, came into power as a junior party when deviation from austerity was not punished with the same technocratic gusto.  

Whereas the economic programme of these parties was to some extent popular, their activities unfolded against the backdrop of an increasingly organized far right. Greece has now three far-right parties in parliament, despite the criminalisation and dismantling of Golden Dawn. In Spain, the PP is now routinely in coalition governments with Vox at the regional level.  

A change of paradigm? 

Podemos and Syriza were partly successful in picking apart the “common sense” of crisis management. It is perhaps hard to grasp today how narrowed down the collective discourse on the euro crisis was in the early 2010s. Odd economic theories around “expansionary austerity” – the idea that austerity can grow the economy – were embedded in government policies, as were countless “structural reforms” whose ultimate purpose was the deregulation of labour markets and the erosion of social rights.  

For most observers, the failures of austerity were increasingly visible, and the message eventually penetrated technocratic circles in Brussels.[4] Debts were restructured, lending terms revised, the European Semester gave greater centrality to social concerns, and the Troika experiment is regarded as an embarrassing blunder to avoid at all costs in the future. 

This shift was apparent when the Covid-19 pandemic broke out in 2020. EU institutions responded with a renewed sense of coordination and integration. The punitive “chacun sa merde” (in the words of Nicolas Sarkozy) gave room to an unprecedented recovery programme funded through the greatest taboo since Maastricht: common debt. The reappraisal of austerity as a failure certainly helped forge a different path, as did the unity of the European South in advocating for a recovery strategy that would include “corona bonds”.  

Politics in Spain, Greece, and everywhere in Europe is currently riddled with new conflicts and cleavages that are sometimes manufactured, but nonetheless real.

The fact that Italy, along with Spain, Portugal, Greece, and eventually France led the proposal cannot be disentangled from the decade-long politicisation of crisis management in the EU. The radical left was decisive in mainstreaming a better understanding of the social consequences and intellectual flaws of austerity against a status quo that outweighed it in terms of political and economic resources. The EU institutions did not come to terms with the failures of austerity through introspection. 

What’s Left 

Despite the virtues of pandemic recovery, the fight is not over. The legacies of austerity are still present, and its appeal lives on, as recent debates on economic governance reform show. The strength of neoliberal “common sense” manifested in the general policy of wage repression in response to soaring inflation, or in the unwillingness to limit the profits of the energy sector in the wake of Russia’s full-scale invasion of Ukraine.  

In this polycrisis, Podemos had limited political success. Spain has been at the forefront of progressive responses to the current economic crises in the EU, from the push for the pandemic recovery fund to the substantial increase in the minimum wage, or the imposition of windfall taxes on large banks and energy companies. But Podemos did not manage to claim political ownership of these policies. From an impressive challenger party, it became one of many political forces led by the more moderate Yolanda Díaz, while Iglésias left institutional politics. Its future is, to say the least, uncertain.  

In Greece, on the other hand, Syriza failed to capitalise on discontent with an increasingly authoritarian conservative government. After four years in opposition, its vote share dropped. Tsipras was unable to convince the electorate of the possibility of an alternative response to the cost-of-living crisis. Varoufakis, who set up a party whose political success was always very limited, failed to enter parliament. With a reorganised PASOK back in the political arena, the prospects for the radical left seem bleak.  

The fortunes of Podemos and Syriza, of course, are not theirs alone. However difficult it is to contest economic orthodoxy, the current cultural battles are perhaps even more challenging. These parties provided a platform for the impoverished, the unemployed, and the precarious. But an increasingly confident far-right has found fertile ground to redirect persistent economic insecurity and social discontent towards migrants, climate policy and a non-existent “gender ideology”. 

Politics in Spain, Greece, and everywhere in Europe is currently riddled with new conflicts and cleavages that are sometimes manufactured, but nonetheless real. It took the radical left several years to make a dent – most of the time with few resources – in the rotten economic paradigm that Europe sustained. Recent electoral results across Europe give little hope for the supporters of greater social protection, inclusive economic prosperity, the rights of minorities, and decisive climate action. In this context, it is hard to see what the future holds for movements like Syriza and Podemos. We would however be misguided to think that our democracies would be better off without them. 

As the cost of living crisis deepens and stretches household incomes, the most vulnerable are tempted to resort to financial services that are rife with traps. Amid this crisis, Ben Cuzzupe and Peter Norwood from Finance Watch explain how EU and national policymakers can protect vulnerable consumers.

Europeans are increasingly feeling the impact of the cost-of-living crisis, with vulnerable households being impacted. Estimates show that approximately 60 percent of German households will have to use all of their available income, if not more, for mere subsistence, all while the CEO of Deutsche Bank recently stated that a substantial number of Germans are currently living off their savings. Moreover, the latest Eurostat data shows that around 21 per cent of the EU population is now at risk of poverty and social exclusion.

As European citizens are facing this challenge to make ends meet, an increasing number of Europeans are seeking consumer credit to help them get by. The German credit rating agency Schufa, for example, has observed a substantial increase in buy-now-pay-later spending in Germany and the Federal Working Group for Debt Counseling in Germany is observing a “significant increase” in over-indebted households in Germany.

Similar situations have been witnessed in other parts of Europe as well. The rate of borrowing is a staggering 63 per cent in Greece, followed by Italy, and Poland (between 40 per cent and 41 per cent) and France (36 per cent).

As inflation across the largest EU member states is now at the highest it has been for decades, the European Central Bank is rapidly increasing interest rates in an attempt to keep the worst of inflation at bay. In a crude reality for people with existing debt, consumers with variable interest rate loans are facing higher borrowing costs on top of higher energy and food costs, increasing the risk of default.

As households’ disposable income faces pressures on multiple fronts, many are facing increasing challenges to maintain their standard of living. As more are pushed towards vulnerability, they look at the financial services market for financing solutions for their everyday expenses. While households should dictate their own way out of strained financial situations, it is imperative that customers seeking consumer credit or financial investments are protected from ending up with a financial service which makes their situation not better but worse.

In the consumer credit market, the promise of easy and quick credit, including buy-now-pay-later schemes, can often overshadow big risks that can lead to over-indebtedness. Already facing inflationary pressures, the most vulnerable in our society cannot afford to be ensnared in questionable debt obligations and unregulated, new financial products such as buy-now-pay-later arrangements or crypto assets.

As the cost of living crisis mounted, Belgian Prime Minister Alexander De Croo warned that “the next 5 to 10 winters” will be “difficult to face”. This outlook now that European policymakers must chart a path to protect people navigating their way out of fiscal difficulty.

Avoiding the barbed-wire ladder

Households with more income have more options and viable paths to maintain their standard of living faced with price rises. Simply spending less or finding a new income stream or just changing a few components of their current living arrangements will suffice. Others do not have these choices. Many already feel the worst of the inflationary pressures, creating a rising stress which causes many individuals to make hasty financial decisions. They do not feel enabled to check if rungs on the ladder to financial freedom are covered in barbed wire.

Unregulated retail investment products can entice consumers looking for quick and high returns to boost their income levels. Recent years, for example, saw consumers turn to crypto assets. These products are largely unregulated and were aggressively advertised on social media, including by influencers promising consumers fast and high returns.

Many advertisements for these assets suggest that there are gains to be made, without mentioning the serious risks of losing a lot of money. Bitcoin, the flagship crypto asset was worth nearly 54,000 euros at its November 2021 peak. In less than a year, following the collapse of the crypto exchange FTX in November 2022, it fell to a low of around 16,000 euros at the end of 2022.

As households’ disposable income faces pressures on multiple fronts, many are facing increasing challenges to maintain their standard of living.

Buy-now-pay-later schemes offer similar promises, immediate access to consumer products, from household appliances to childrens’ toys, with repayment on a delayed timeframe. Buy-now-pay-later arrangements often are interest-free. However, they possess a fixed repayment schedule, which is generally several weeks or months, and in some cases involve very high late payment fees for missed payments.

Research is finding more and more Europeans are using buy-now-pay-later products to purchase items online, with a 60 per cent increase between 2019 and 2021. The industry has scope to further expand, with one Deloitte report suggesting traditional financial services providers such as banks could seek to join existing fin tech players in the growing market.

For many, the priority is making ends meet this week or month. When a week or month where they cannot meet the repayment schedule comes along, all of a sudden there may be various consequences, such as late payment fees and severe credit score impacts. As most buy-now-pay-later users take out multiple arrangements and other debt obligations at the same time, these consequences are exacerbated.

It is the same scenario – there is a ladder out of precariousness. Under pressure, many do not notice that the rungs are covered in barbed wire.

Safer and Fairer Financial Services

Because of all of this, regulation must be put in place to protect consumers from taking out financial services which rather than improve their financial situation, make it worse. At the European level, there are numerous regulations across this area.

First, there is the Consumer Credit Directive, which is the EU directive regulating the EU consumer credit market. Currently in the final stages of review by EU policymakers, the rules currently in place date from 2008. With the increase of consumers seeking debt to finance their livelihoods, it is absolutely essential that the directive protects vulnerable consumers.

Lower income consumers are the most impacted by the current cost-of-living crisis. As highlighted in a recent Finance Watch study on the EU consumer credit market, this consumer group is most likely to purchase new and unregulated credit products which are of small value.

These products, however, are the riskiest as they are associated with high costs and fees, especially in relation to the low incomes of vulnerable consumers. To avoid these consumers falling into a situation where their economic burden gets even heavier, it is essential that these new credit products are brought into scope of the CCD. Moreover, the creditworthiness assessment rules that creditors must adhere to should be sufficiently robust to ensure that credit is not mis-sold.

Vulnerable consumers resorting to borrowing to make ends meet can quickly find themselves in a debt spiral with long-term negative consequences.

Vulnerable consumers resorting to borrowing to make ends meet can quickly find themselves in a debt spiral with long-term negative consequences if lending practices and credit products are not adequately regulated. Member states have a duty to ensure that the vulnerable in our society have access to adequate government support schemes such as energy price caps, indexing of salaries or benefits on inflation instead of allowing consumers for whom consumer credit is not suitable to fall into over-indebtedness.

Effective debt relief measures are needed for the rising number of existing borrowers who are unable to repay their loans due to the inflationary pressures and rising interest rates. Therefore, the new CCD rules should oblige creditors to consider affordable and sustainable forbearance measures such as the reduction of the loan’s interest rate before initiating any enforcement proceedings against struggling borrowers.

As with many EU rules, certain matters remain at the discretion of individual countries. With the Consumer Credit Directive, current discussions by EU policymakers suggest that the question of whether the CCD rules are applied to deferred debit cards will be at the discretion of the Member States at national level.

Another key set of rules can be found in the Distance Marketing of Consumer Financial Services Directive (DMFSD), which aims to ensure that consumers purchasing financial services at a distance such as via the internet are protected. Initially adopted in 2002, changes are now needed to capture the consumer protection risks that have emerged in recent years in the increasingly digitalised retail financial services market.

The DMFSD provides two key functions. One, it acts as a safety net providing consumer protection for new financial services products coming onto the market, which are not as of yet covered by product-specific legislation. Secondly, it fills regulatory gaps which exist in current product-specific legislation.

The issue is, however, that the DMFSD currently lacks key consumer protection measures, such as advertising rules. The recent case of crypto assets, for example, shows the importance of having robust advertising rules in place for financial services that newly emerge on the market and are not (yet) covered by existing regulations. With the high degree of aggressive and misleading advertising in connection with these assets, it has led to a mis-selling of assets to many who are not suited in their financial situation.

EU policymakers should use the opportunity the ongoing review of the DMFSD presents to fill the key gaps in the consumer protection regulatory framework for unregulated financial services products to ensure that consumers are sufficiently protected.

Finally, another key retail financial services initiative currently on the EU legislative agenda is the EU’s Retail Investment Strategy. The goal of this EU initiative is to ensure consumers who invest in capital markets are better protected and have access to better quality products that are regulated by better rules.

Important improvements for this initiative would be, for example, ensuring there are simple and cost-efficient products which are safe and suitable. This would ensure wider access and use of safe products for consumers. In addition, inducements should be banned to guarantee quality of advice and remove conflicts of interest. Moreover, the initiative should be used to introduce shorter retail investor pre-contractual information documents that easily and clearly explain the key product features.

This is the scale of the challenge ahead for European policymakers. As the vulnerable are making critical decisions just to make it through the next month, it is more important than ever that the European retail financial services market is safe and fair.

Where monthly budgets are already stretched by inflation on groceries and energy bills, mis-selling of financial services and the financial losses and indebtedness as a result of it, come with severe consequences for households under financial stress. The reviews of the EU consumer credit legislation is a golden opportunity to create a safe and fair retail financial services market, and are part of the key measures needed to protect citizens in these difficult economic times.

When headlines report shocks, whether war- or climate-related, this provides a context for price hikes on everyday goods. What is often overlooked, is the role financial speculation plays in dictating what consumers pay. These decisions, which escape legal and public scrutiny, can be impulsive, and fuel a sense of scarcity for the sake of profit-making. In this conversation, Price Wars author Rupert Russell explains the outsized role of financial markets in our current crises and why politics cannot afford to let them run wild.

Green European Journal: Looking around the world today, we see many signs of scarcity: wars and sanctions, energy shortages, heatwaves causing crops to fail… Is this scarcity at the root of the current cost of living crisis?

Rupert Russell: Amartya Sen famously said that all famines are human made. He points to a genuine shortage of food as the cause of certain famines in history that killed people on a horrific scale. But he also explains how, since the formation of modern markets and the global economy, local shortages no longer matter that much because almost all the world, except for some isolated regions, is plugged into global markets.

Sen’s point is worth keeping in mind when we see headlines around shortages and the cost of living crisis. In the US state of Mississippi between 2017 and 2019, 15 per cent of the population suffered from food insecurity. That means that they could not always afford to eat an adequate meal. Was this hunger caused by an absolute shortage of food? The answer is no. Price is the central prism through which we have to see modern poverty. The reason for food and energy poverty is simply that people cannot afford what they need.

But surely the war in Ukraine has a lot to do with the cost of living crisis?

Food and oil are global commodities that are more or less interchangeable. They are abundant and are sold all over the world regardless of war. We see headlines about the war, stranded wheat in silos, and Russia and Ukraine being jointly responsible for a quarter of the world’s wheat exports and then think that the sharp rises in food prices are rational. However, the price of all these internationally traded commodities dropped significantly in June 2022. What happened with supply and demand? Was there a ceasefire in Ukraine? Was an embargo lifted? No – the US Federal Reserve announced an interest rate rise of 0.75 per cent, and every single financial asset from Meta to crypto to commodities dropped.

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Priced Out: The Cost of Living in A Disrupted World

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Not only is the scarcity story around the war in Ukraine overblown and disconnected from the realities of the markets, but these are also not even physical markets – they’re financialised markets. The prices of financial assets are set by speculators, and nothing shifts the narrative more than the Federal Reserve. The gas situation is more complicated because it is a commodity that is hard to move, which is why pipelines are so important, and why Russia has been able to play games with Europe since the 1960s. It is also why the bombing of the Nord Stream pipelines is so significant. That said, we are rapidly moving towards a global market for liquefied natural gas as new infrastructure is built.

What we need to remember is that markets are social institutions, and it is their dysfunctions – whether Putin using gas as a weapon or the dynamics of financial markets – that are creating a sense of scarcity. We are seeing extraordinary failures of the institutions that we’ve built to distribute goods around the world. It is precisely the diagnosis that Amartya Sen gave for famines or what in the West are called “cost of living crises”, and many people may very well go hungry and die because of it.

Financial speculators may well be aggravating the cost of living crisis. But isn’t environmental change what is making food, resources, and water more scarce?

I’m no expert on the future of food production, but there have always been discourses of scarcity. You saw them in the 1920s and the 1970s; they go in and out of fashion. They also play into the idea that the world is overpopulated, and we’re soon going to have to start eating each other. Food prices were really low between 2014 and 2021. Now people see the news about a drought in India or a fire in California and think that is why prices are high. Has there been an increase in droughts and fires that specifically accounts for prices tripling? I would argue no.

The way we have built the modern commodity market means that any perceived downturn in production can be escalated into a global crisis or shock. We’re getting more and more data – whether directly from farms or from satellite data companies. This data feeds into these algorithms, and they amplify these effects. A critique of the climate movement is that it feeds into narratives of scarcity, which then further contributes to artificial volatility through the markets.

Price is the central prism through which we have to see modern poverty.

How does algorithmic trading work?

Algo-trading can take any form. There are lots of trend-following algos out there – algorithms looking for trends and betting on them. If there is a news event, a war, a pipeline blowing up, or whatever – a bot reads it and trades on it immediately under the logic “it’s better to be first than to be right.” The impact is that you get a lot of intra-day volatility. We’ve seen 30-dollar-a-day swings in the price of oil because of the war in Ukraine. One day, headlines about embargoes on Russia. Bam, price hike. Next day, headline: Russia is going to sell their oil to India, right – sell.

The crazy thing is that we have no idea what these speculative strategies are. Hedge funds that trade in these ways – Renaissance Technologies being the most emblematic – are very secretive. The price of food and fuel is so important to our lives, to security, to the economy, and to political stability, but then you realise that these decisions are made in a complete black box. We’re in a world where the decision-making behind the very things that govern whether we can afford to eat and heat our homes is secret, and where this secrecy is both protected by law and normalised. It is a sign of the madness of the market system that rules our world.

You travelled throughout northern Africa and the Middle East during the Arab Spring. In 2022, we’ve seen major protests from Sri Lanka to Iran to Chile. Why do price rises have such an incendiary effect?

The link between political instability and high prices for essential goods is as old as history. In Roman times, the emperors provided bread and circuses to keep the people happy. During the French Revolution, there was “let them eat cake.” These centuries-old comparisons re-emerged in a very vivid way during the post-2008 global food crisis, which was one of the driving forces behind the Arab Spring. Since 2021 there have been similar protests in at least 50 countries including India, Indonesia, Iran, and Tunisia.

All governmental systems – monarchies, dictatorships, democracies – rest on an implicit agreement between the ruler and ruled that life must be liveable. The historian Steven Kaplan once wrote that it was Charlemagne who established the state as the guarantor of the price of bread in Europe, with the king as the “baker of last resort”. This stays with us today.

Protests that happen during food price spikes are not necessarily mechanical responses to hunger but rather to the failure of a government to do its job, symbolised by high prices. In some ways, Europe’s cost of living crisis began with the gilets jaunes protests between 2018 and 2020 in France, sparked by the introduction of taxes that increased the price of petrol. The same happened in America. Petrol prices can become a lightning rod for protests and instability. With all these neoliberalism, house prices can also be integral to social contracts. Houses have become more than just a place to live; they are a form of financial security in place of the social safety net that has been eroded. In the context of the current crisis, we need to stop thinking about these different commodities as separate markets that reflect what is going on in the real world and realise that they are all part of the same financial house of cards.

Protests are not necessarily mechanical responses to hunger but rather to the failure of a government to do its job.

Governments in Europe are subsidising energy to help contain the cost of living crisis. Meanwhile, central banks are raising interest rates to curb inflation. What do you make of these responses?

Politicians and central banks have found themselves backed into a corner. The war in Ukraine has turned what seemed like transitory inflation created by the pandemic and the supply chain crunch into something much more durable. So central banks have felt forced to respond with interest rate rises.

On the one hand, the politicians who were almost laughing at the idea of price controls as recently as early 2021 are having to impose them because populations and businesses are simply unable to pay their bills. The question is: who pays, and who benefits? There is an assumption on the part of both central banks and elected politicians that this crisis is rational and reflects an underlying reality. This is resulting in enormous transfers of public money to commodity producers – all because of the price rises that have been massively inflated by speculators’ overreaction to the war in Ukraine.

On the other hand, it is true that if you raise interest rates high enough, you will bring down inflation. But when [Federal Reserve Chair] Paul Volcker did this in the early 1980s, he not only engineered a recession in the United States but also triggered a developing-world debt crisis that went on for decades. The humanitarian cost of this strategy was extraordinary, and the contagion effect from the Global North to the Global South multiplied the human suffering and misfortune caused exponentially.

We need to ask ourselves whether there isn’t another way to deal with this. Intervening at the price level is definitely a short-term fix. So far, governments have preferred to fork out cash even though regulation could be just as effective. Just think how much renewable energy such an investment could create over the next two or three years. What is happening in the United States – and I think this is a step in the right direction – is a movement towards “supply-side progressivism”. The idea is to improve efficiency, increase productivity, and decarbonise as quickly as possible.

So the role of the state will have to grow to fill the shortfalls?

It’s common sense. In France, we have seen the massive nationalisation of the country’s main energy producer because they simply had no choice. Governments have been backed into this corner because, for over 40 years, we’ve lived under the markets. It was a system that worked but that was extraordinarily fragile and had all kinds of interdependencies within it. The fragility metaphor extends all the way from the financial system to supply chains. Europe’s dependency on cheap Russian gas was one of the greatest fragilities. As far back as 2012, then-Polish prime minister Donald Tusk was warning that relying on Russian energy was really not where Europe wanted to be.

Over 40 years of neoliberalism, the shock absorbers have been hollowed out of the system. Now we are bouncing from crisis to crisis. We have to start unwinding that fragility.

The crisis of 2008 provoked discussions on the reform of the financial system. But many of these conversations subsided as the economy recovered. Does the cost of living crisis bring these bigger economic questions to the fore once again?

I shied away from making too many policy prescriptions in Price Wars. The one message I wanted to convey is that we are living in a world of prices, but are in denial. Prices provide the structure of constraints and opportunities that we all live in – from Biden and Putin to Mark Zuckerberg – and enable and limit all our decision-making and ability to act. These numbers run the whole world.

This endpoint was the whole purpose of neoliberalism. It was an anti-democratic project to say that markets are more efficient voting systems than democracies, with their special interests and trade unions. We’re living in that world now, but it was a political decision to empower prices, and prices in turn constrain politics. What we need is a political imagination that tries to move beyond that, and this is what I see people in some parts of the green movement trying to do when they talk about degrowth or decommodification.

Recessions and periods of inflation are very difficult for progressive forces as they are often followed by austerity and the rise of xenophobia. What narratives should Greens and progressive parties use to explain the current period of insecurity?

During the early days of the pandemic in 2020, there was a brief sense of “we’re in it together”, which flourishes when the state intervenes in a big crisis and is backed by a sense of collective action. I think this was real. It’s not a made-up story. People care.

We don’t need to treat people as atomised consumers. They recognise that being given 400 euros to help with their electricity bill that’s gone up by five times that amount isn’t really helping them. People’s household budgets will speak for themselves. The atomistic neoliberal contract becomes implausible when your pay just doesn’t match your outgoings.

The Greens and the centre-left in a broader sense need to offer a response that can lean into feelings of patriotism, community, and collectivism. Here’s a collective answer to your individual problem. It’s an exact flip of the neoliberal idea that for every systemic problem you need an individual solution. The time has never been better for that break.

The EU’s current energy scarcity is unlikely to be temporary, and Europe’s poor are bearing the brunt of it. Try as they may, member state governments will be unable to solve this problem by relying on new fossil fuels, nuclear power, and recommissioned coal plants. They will have to find ways for European societies to use less energy. Swen Ore considers the concept of “energy sobriety” and explores rationing and progressive energy pricing as socially just ways of managing the energy descent.

With Russian gas to Europe disrupted and an energy crisis looming, rationing is back, albeit in disguise. To avoid a clash with the ideological underpinnings of our society of abundance, instead we are more likely to hear the terms “reduction of consumption”, “demand management”, “sufficiency”, and even “energy sobriety”.

But what exactly is energy sobriety? And, even if it remains somewhat taboo, could the principles of rationing offer an alternative to the current state of rising energy poverty amid ecological crises?

The term “sobriety” has a very particular resonance to ecologists. For the philosopher Ivan Illich, a radical thinker whose writings inspired the nascent political ecology movement, sobriety conveys an anti-productivist understanding of society based on an ethic of “conviviality”, which encourages people to maintain autonomous and creative relationships with each other and with their environment. As he wrote in Tools for Conviviality in 1973, “People will rediscover the value of joyful sobriety and liberating austerity only if they relearn to depend on each other rather than on energy slaves.”[1]

When applied to energy, sobriety reflects a long-term political vision for a society empowered to escape from the cycle of repeated crises by becoming less dependent on energy. It is not about simply saying that “we” should consume less, as if social inequalities did not exist. Rather, it challenges us to achieve structural change in energy use that is both democratic and socially just.

Sobriety or sufficiency?

At first glance, the use of the term sobriety may lead to confusion with the fight against alcoholism. This was experienced at first-hand by French green thinker Luc Semal, one of the authors of the landmark publication Sobriété énergétique, during his first meetings with grassroots organisations. But once the misunderstanding is dispelled, the metaphor remains. As with alcohol, we have a civilisational thirst for energy. Both should be properly produced, well chosen, and consumed in moderation, and, like alcohol, the abuse of energy can be destructive to both physical environments and social structures.

In the English-speaking world, the term energy “sufficiency” is more frequently used than sobriety. For the purpose of this article, the two will be considered equivalent. Both concepts recognise the need to say “enough is enough” and create an alternative to our societies’ insatiable use – and indeed wastage – of energy.

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Energy production and consumption in France – including the embodied energy of imports – have grown continuously since 1945. Various energy management have been tried out since the 1990s – even earlier if we consider the anti-waste campaigns of the 1970s – but these policies either focused on energy efficiency or were nothing more than gesture politics.

The story is the same for the energy policies of the European Union. In 2012, researcher Maria Edvardsson was unable to find a European Commission text that dealt directly with the concepts of energy sobriety or sufficiency.[2] Little appears to have changed. When the terms do appear, their use reflects a confusion with the notion of energy efficiency.

The dominant discourse around energy saving remains deeply embedded in the growth paradigm, in which technical innovations have the upper hand. The influential work of American social theorist Jeremy Rifkin on the “third industrial revolution” expresses this most clearly. According to his vision, internet technology and renewable energies will allow hundreds of millions of people to produce their own green energy. These decentralised infrastructures will replace our ageing nuclear-, gas-, and coal-based systems. This new world of highly interconnected technologies will create millions of jobs and “countless new goods and services”, perpetuating economic growth.

In this context, energy saving is seen as a possibility offered by technical innovations to cut production costs and accelerate the pro- duction of new technologies to shift toward a decarbonised economy. Energy efficiency pushes the boundaries of growth forward, thereby ultimately leading to greater global energy consumption. It is this line of reasoning that led French president Emmanuel Macron to declare in February 2022 that, in order to reduce France’s energy consumption by 40 per cent, the country has to “grow in sobriété”. He stated that this can be achieved “without self-deprivation” by means of “innovation [and the] transformation of our industrial processes”.

For ecologists such as Luc Semal, this does not represent the emergence of the society they dreamed of. The energy sufficiency they strive for is political. It concerns the fair distribution of energy reduction efforts, not the development of technological innovations. For them, sufficiency is about rethinking global energy demand. To do this, we must also rethink the economic foundations of our democracies.

The “natural contract” as an amendment to the social contract

In capitalist democracies, access to energy is expressed either as a right for the poorest or as a freedom for the richest. As such, efforts to green these democracies – which implies policies that reduce global energy consumption – give rise to fears of insecurity among some and, among others, the sense that their freedom and way of life are under threat. Energy sobriety thus requires the redefinition of a social contract in which resource limits are finally taken into account to collectively define what “enough” actually means. Philosopher Michel Serres calls this the “natural contract”.

The objective here is to reduce inequalities through the creation of new mechanisms of solidarity based on resource scarcity rather than abundance. The concept of sufficiency is a challenge that can make discussions over energy more tangible and demands a rethinking of equality and justice through the lens of energy consumption.

The purpose of such a policy is to anticipate – in a democratic fashion – what economist Christian Arnsperger and philosopher Dominique Bourg describe as “a forced return to sufficiency, in inequitable and violent forms, that destroys authentic human dignity”. In other words, the rise in energy poverty amid the current crisis.

Energy sobriety reflects a long-term political vision for a society empowered to escape from the cycle of repeated crises.

Rationing and collective sufficiency

European history shows many examples of rationing policies, during wars or during oil shocks. Mathilde Szuba [3], summarised and paraphrased here by the author, describes rationing policies in France during WW1 and WW2 as well as in the Netherlands during the 1973 oil crisis. Governments are quite capable of intervening drastically and fairly in the market when required. However, these policies are only accepted by populations insofar as they can offer both fairness to the poorest and security to the richest.

In France, rationing remains associated with the German occupation during the Second World War, when it was used as an instrument of deprivation. But the French experience of rationing twenty-five years earlier, during the First World War, shows how it can also be used to fight social injustice and overconsumption. [4] [5]

In 1915, the war drove up inflation on food products and coal. The first government intervention to tackle this involved obliging retailers to display average food prices in shop windows alongside their own. However, costs continued to skyrocket, and tensions rose in the population. In response, the government decided to set maximum prices in 1916, first for sugar and coal, then gradually for other staples. But this also failed to curb increasing inequalities.

In 1917, Parisians demanded that the government go further by rationing coal. In spite of initial resistance from the parliamentary majority, the decision was taken to limit its purchase by the upper classes, thus ensuring access for all. This political decision was well received by a public that could no longer afford a resource that had become rare and too expensive. The fact that the setting of prices and quantities by the government only occurred as a last resort and under popular pressure is worthy of note.

The implementation of coal rationing required significant administrative reorganisation. The Ministry of Armaments decided on the national allocation of coal via the National Coal Office, which then organised distribution at the departmental level. The key principle of this policy was “one fire per household”, which of course disadvantaged the wealthy. The coal allowance could be slightly increased for larger households; this tended to benefit the working classes.

The political wrangling that took place in the parliament and the senate on the introduction of coal rationing pitted the interests of the (more rural) producers and owners against those of the (more urban) consumers and workers. In the end, this public intervention in the market and the private sphere succeeded in easing social tensions and safeguarding social cohesion through to the end of the war.

Rationing was also a feature of the oil crises of the 1970s. When the Yom Kippur War broke out in 1973, OPEC imposed an oil embargo on countries that supported Israel, including the Netherlands. As a result, oil prices quadrupled, and the Dutch authorities had to act quickly. From November 1973, private cars were banned from driving on Sundays. In January 1974, this restriction was replaced by oil rationing via a coupon system. The objective of this measure, which was supported by oil companies and the den Uyl government, was to reduce demand in line with the decline in imports, i.e. 30 per cent. After one month, however, imports resumed, and rationing was abolished. The government subsequently continued its energy reduction programme by limiting speeds on the roads.

In our current context, it is reasonable to assume that energy rationing would successfully anticipate oil depletion, reduce greenhouse gas emissions, and limit the human activities that are causing biodiversity loss. But how feasible would it be to introduce energy rationing outside of situations of war and acute crisis? The historical examples presented above differ from our current context in at least two ways. First, the ecological crisis is not temporary. The goal of implementing a sufficiency policy would be to establish a “new normality”. And second, energy dependence is greater now than ever before. Oil in particular appears to be impossible to replace in the transport sector without initiating profound changes in infrastructure and mobility services.

From the energy crisis to a “new normal”

Returning to the present, disruptions in the supply of Russian gas to Europe have caused prices to rise dramatically. These price hikes have mainly affected the most vulnerable in society and have forced EU governments to take a range of much-discussed emergency measures: energy price caps, reduced VAT rates, super profits taxes, windfall taxes on energy companies, subsidised social rates extended to lower-middle-income families, and energy allowances for households and businesses.

The common denominator of these measures is that they focus solely on prices; quantities and uses never enter the equation. No distinction is made between the heating of water for a shower and for a private swimming pool, or between a mile travelled to go to work and one travelled for sightseeing. This, however, is the crux of the problem. How can we justify subsidising kilowatt-hours that are put to pointless or even extravagant uses? How can we agree to pay collectively for certain practices that are incompatible with our ecological commitments?

Like alcohol, the abuse of energy can be destructive to both physical environments and social structures.

A solution to this problem is the progressive energy tariff, which helps us to make a distinction between uses. Under this system, the first kilowatt-hours consumed are inexpensive, and prices then increase in stages. A progressive tariff thus guarantees that essential needs are met, while large consumers pay a premium. A well-known formula by political scientist and journalist Paul Ariès sums up this approach: “free use and expensive misuse”.

It is no mystery that energy consumption (and therefore CO2 emissions and other environmental impacts) increases with income; a progressive tariff is therefore also a social tariff. This principle can also be applied to businesses and industries based on their ecological, social, and economic impacts in order to maintain and increase our collective power to live with dignity.

In his interviews with people who unwillingly endure energy sufficiency in their daily lives, Luc Semal found that explaining the concept sometimes led them to reverse the social stigma around this issue: “Overconsumption is the preserve of the rich, while sufficiency can be the virtue of the poorest. A more political conception of ecological inequalities then emerges, which goes hand in hand with a critique of economic inequalities.”

A more radical way still to distribute energy equitably would be through personal quotas. The system of Domestic Tradable Quotas was first proposed by policy analyst David Fleming in 1996. Under this proposal, a carbon budget is set at the national level. This is then divided into individual emission rights. Everyone in a given society would receive the emission rights necessary to purchase fuel or electricity (alongside the normal financial payment). The sale and purchase of rights would be authorised, but no further emission rights could be issued, which would produce a redistributive effect.

Many variants of this idea have been developed including personal carbon trading, personal carbon allowances, and end-user emissions trading. Proposals for such a scheme even gained considerable government interest in Britain in the early 2000s. However, during the tumult of the 2008 financial crisis, the UK government declared that it was “an idea currently ahead of its time” and simply abandoned it.

The slippery slope of the energy descent

Paradoxically, it seems that the more energy a society consumes, the less people are aware of its materiality. If abundance relegates the management of energy to the private sphere and, considering voluntary simplicity, to the moral and philosophical sphere, its scarcity brings it back to the political field. In a zero-sum game, one person’s consumption may be at the expense of another’s. This interdependence is the first stage of politicisation.

A social contract will not be enough, however. The principle of gradually diminishing aggregate quantities requires a kind of “natural contract”. As nature is unfortunately not able to speak for itself, limits would have to be set rather than externally imposed. However, it is the very purpose of political institutions to organise and administer distribution, arbitrate needs, and prioritise uses.

The drastic travel restrictions imposed during the Covid-19 crisis showed that the rapid implementation of policies is possible, but also that such measures highlight inequalities that can imperil their acceptance. Effective rationing policies can only be achieved in the long term if they recognise the experiences of the groups for whom scarcity is a daily reality. Failure to build fair and united mechanisms for organising energy rationing (such as progressive energy tariffs) could lead to large-scale social conflict due to shortages.

At the time of writing, the war in Ukraine is leading to a major energy crisis. While states are adopting measures to support people on low incomes, it is clear that this is not just a matter of price but also of usage and supply, pushing policymakers in the direction of rationing. In France, the term “sobriété” is no longer a dirty word. President Emmanuel Macron himself promised a “plan de sobriété énergétique” to dispense with Russian gas in July 2022.

Once more, sufficiency policies are being implemented in response to crisis. In Sobriété energétique, the authors question whether our democracies are actually capable of proactively choosing energy sufficiency as a means of bringing about a truly ecological society. What is undeniable, however, is that energy is a matter of democratic debate. Today’s concerns about energy prices should not obscure the twin crises looming large before us: the fragility of our energy supply and the need to organise a large-scale energy revolution, which will necessarily imply sufficiency. The use of energy, as a limited resource, should contribute to the global common weal. Building a system of energy distribution that makes a distinction between uses is the best way of tackling both rising energy prices and overconsumption. As environmental sociologist Mathilde Szuba writes: “Unthinkable? Unfeasible? Not really, and in fact, we’ve done it before.” Mathilde Szuba, in Bruno Villalba and Luc Semal.

Thank you to Peter Sims, Sien Hasker, Jonathan Essex, Luc Semal, Mathilde Szuba for their comments and reviews.

The cost of living crisis follows the pandemic as another blow to young people and their living standards. In Italy, younger generations have been suffering from the effects of precarious work and falling economic prosperity for at least a decade. The result is widespread disillusionment, withdrawal from politics, and a vacuum that only the Right has so far been able to fill.

“I have a degree in sports science. While I was studying, I started working in a gym as part of a student internship. After graduation, they offered me a job as maternity cover and I stayed on. I’m paid in cash, off the books. To make it legal I would have to go self-employed and pay more in tax than I actually make.” Francesca [name changed] is a 26-year-old who divides her time between three odd jobs to build up work experience and achieve a minimum of independence from her parents. “I also work at a gymnastics club, but I’m only paid expenses,” continues Francesca. “And once or twice a month, on big nights, I bartend at a club.” Juggling three jobs is not easy physically or mentally: “I work three jobs to earn 500 euros a month, and I’m exhausted.”

In 2020, 11.2 per cent of workers in Italy between 20 and 29 years old lived below the relative poverty line, i.e. they earned less than 10,519 euros per year, which works out at less than 876 euros per month. This percentage exceeds the European Union average by around two points. Italian statistics agency ISTAT reports that absolute poverty among young people aged between 18 and 34 was 11 per cent in 2021. This means that almost 1.1 million young people cannot afford the minimum expenses needed to lead an acceptable life. To aggravate the situation, the pandemic caused thousands of young people to lose their jobs, further increasing precarity and unemployment.

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The working conditions experienced by young people in Italy today can be summed up in four words: underpaid, occasional, exploitative, and insecure. A 2021 survey by the Italian National Youth Council based on a sample of 960 young people aged 18-35 revealed that, five years after completing their studies, one third of interviewees were unemployed for over 40 per cent of their time. A large majority indicated that they received an annual salary of less than 10,000 euros per year, with 23.9 per cent earning less than 5000 euros.

Twenty-two of the European Union’s 27 members have a legally established minimum wage. Italy is one of the five countries without one, along with Denmark, Austria, Finland, and Sweden. In these countries, wages are regulated by collective bargaining. In September 2022, a directive on EU minimum wages was approved by the European Parliament. This aims to increase the minimum wage threshold and strengthen collective bargaining, which does not always cover all sectors in countries without a minimum wage. In Italy, collective bargaining is not mandatory. Some firms and contracts are not covered at all, undermining the rights and protections of workers.

In late 2014, Matteo Renzi’s centre-left government introduced the Jobs Act, which aimed to kickstart hiring and help Italy recover from the Eurozone crisis by making work more flexible. In theory, the reform also set limits on the number of times a worker can be hired on fixed-term or “on call” contracts, forms of hiring that fail to guarantee stable employment and income. “These limits have not prevented the unlimited spread of these contracts,” explains Nicola Marongiu, labour market and negotiations coordinator for Italy’s biggest trade union CGIL. According to Marongiu, 90 per cent of new hires each month are on fixed-term contracts, while young people are often hired on terms that “cannot be defined as work”, such as fake internships. “Since 2014, ‘extra-curricular’ internships are often used for essential work that cannot be constituted as training.” The result, Marongiu explains, is that young people become trapped in a pattern of interrupted, stop-go employment that means that their income “is not enough to live on”. Throughout this time, young people are failing to build up pension contributions, setting them up for difficulties later in life.

“The fundamental problem is that there are no public welfare policies for young people,” adds Silvia Ciucciovino, a professor of labour law and advisor to the National Council of Economy and Labour. Social protection is targeted at older people and “the welfare state does not address the social needs of young people and families.” An entire demographic is thus ignored by social security, deprived of the possibility of making plans at a cost to personal dignity and drive alike.

The working conditions experienced by young people in Italy today can be summed up in four words: underpaid, occasional, exploitative and insecure.

From insecure work to the denial of housing autonomy

Precarity and poverty impact young people’s ability to live autonomously. In the European Union, the average age at which people leave the parental home is 26.5 years old. In Italy, it is 29.9. This high average correlates with some of the EU’s lowest rates of workforce participation among young people. The presence of an adequate and reliable income is a major factor in the decision over whether to leave home. Carlo Giordano, board member of Immobiliare.it, cites a recent analysis that found that the average monthly rent for a two-bedroom flat, which rose 8 per cent between 2021 and 2022, is 877 euros per month. This figure does not include bills. Energy and environment regulator ARERA has calculated that average annual bills for natural gas and electricity come to 1730 and 1120 euros respectively. Both have risen sharply compared to 2021 – by 46 per cent for gas and 81 per cent for electricity. An Italian household thus needs over 13,000 euros a year to live in a rented apartment. This represents an increase of 15 per cent on 2021. When seen together with low pay and short-term contracts, the problem is obvious.

“I still live with my parents for now. My contracts are too insecure, and I’m not paid enough to cover rent or any unexpected costs,” says Andrea [name changed], 32. “All my salary and maybe more would go on rent, so I wouldn’t be able to afford anything unplanned like dentist’s or doctor’s appointments, or getting the car fixed.” Andrea’s situation is shared by many young people in Italy. In addition to the lack of social security, Italy also has scarce social housing compared to many European countries. Although Italy is among the countries with the highest number of houses per inhabitant, only 3.8 per cent is dedicated to social housing. In Austria and the Netherlands, the proportion is 24 and 29 per cent respectively. As residents tend to stay in social housing for life, it is virtually impossible to access in Italy. All available indicators point to deepening housing deprivation, with young people facing a particularly difficult situation.

The poverty that many young people face has become structural – so much so that it has given rise to changes in the very idea of housing. Nicola Ferrigni, director of the “Generazione Proteo” Observatory, explains how a study of 5000 Italian young people aged 16 to 19, which found that 62 per cent would be prepared to move into a co-living space, a form of residential accommodation with shared communal areas. While half the respondents said that their choice would be based on affordability, Ferrigni sees signs of a “cultural shift that derives from the economic”.

An absent political class

Despite deteriorating working conditions and the rising cost of living, Italy’s political class continues to forget young people and their needs, as it has done for years. “Young people are excluded from politics,” states Ferrigni, adding that “youth was a key word in the Italian election campaign, but it was only ever used in a tokenistic way.” With nothing concrete on offer, under-35s in Italy stayed home on election day. In September 2022, a far-right-led coalition gained a majority in parliament with over 40 per cent of the votes. Forty per cent of people between 25 and 34 abstained.

“I have no faith in politics. Nobody speaks to me. Most politicians have given no weight to the needs of my generation in recent years,” says Francesca. Andrea agrees. With a disappointed gaze, he explains that he loves politics deeply, but that he has lost his confidence in it. “Regardless of their place on the political spectrum, from the extreme right to the extreme left, I do not see politicians with a medium-to- long-term vision for the country. I am 32 years old. I’ve voted in a few rounds of elections, and I haven’t seen any flash of novelty or vision that could reassure me”.

There are many factors behind the Right’s recent success. For political sociologist Luca Raffini, young people are politically lost as a result of the general and sustained precarity of work and life. “Younger generations find themselves deprived of a collective dimension due to their precarious and fragmented experiences and identities,” describes Raffini. “Politics is a collective thing. How do you build a sense of community if half of the employees in a given workplace are on short- term contracts and are afraid that making any demands could see them out the door?”

The Right capitalised on discontent rooted in worsening living conditions by focusing on the “here and now”. With prices rising, the right-wing coalition promised a flat tax to increase incomes and shrink the state. Never mind that the policy is unaffordable considering Italy’s high level of public debt. It also tailored its proposals to target older voters. There are 16 million people over the age of 50 in Italy, compared to 6.8 million voters under the age of 35.

All indicators point to deepening housing deprivation, with young people facing a particularly difficult situation.

The majority received by the right-wing alliance led by Giorgia Meloni and her Brothers of Italy party cannot be explained without underlining the novelty the bloc represented compared to a series of governments of different colours that had all tried and somehow failed. Its victory reflects the Brothers of Italy’s stubbornness in opposing Mario Draghi’s technical government, as well as its ability to entice voters by adopting paternalistic rhetoric calling for the state to take care of its citizens in the current crisis. Giorgia Meloni won not so much for her concrete proposals as for her skill in conveying a sense of protection: of the traditional family, of the homeland and nation, of borders and security.

The major Italian parties attempted to address young people during their electoral campaigns but failed to formulate concrete, long-term proposals that could credibly provide hope to an entire generation. The Right, the left wing of the Democratic Party, and the alliance of the Greens and the Italian Left all proposed reducing taxes on young hires in some form, while the latter supported free public transport for the under-30s. The attention paid to young people by the Five Star Movement was also superficial, centring on making mortgages more accessible for first-time buyers and the introduction of a “right to stay” to combat emigration among young graduates.

All important points, but a long way short of changing the system that has left Italy in its present state. Instead, the proposals appeared disconnected, amounting to patching up the present without looking to the future.

Stressed out and depressed

This precarity, prolonged economic dependence, and disillusionment is deeply affecting the mental well-being of the under-35s in Italy, changing perceptions of life and of relationships. “Insecurity starts at work but becomes an existential question when you cannot truly become an adult and acquire the trappings of adulthood,” argues Raffini. Not only that – insecurity weakens social relations and affects the ability to link the present to the past and the future. “I like the work I do very much, but I am dissatisfied. I feel that I am constantly in search of a level of independence and security that is impossible for me to achieve at present,” adds Francesca. “On a psychological level, you really feel the effects of precarity,” echoes Andrea, stating with regret that he cannot imagine the future, and his one hope is that all these shared difficulties will push people to “bring out the best of the collective”.

Psychologist and counsellor Ambra Cavina argues that unemployment and precarity undermine personal development: “Work is part of building a personal and social identity.” The world of work facing young people today does not give them a chance to explore their limits and their desires. The spiral of social pressure associated with not having a job leads to mental stresses from “anxious-depression to boredom and apathy and isolation and exclusion”. Cavina believes that it is the political class’s responsibility to provide support and create the pathways that promote the wellbeing and mental health of young people, above all by giving them the chance to forge a life path for themselves.

Under-35s in Italy are living in bubbles of economic and job insecurity that can burst at any moment. Meloni’s right-wing government appears uninterested in employment policies and the needs of young people, whose principal desire is to be able to express their identity and sense of self. Meanwhile, the cost of living is going up, and the gap between job insecurity and the right to housing is growing, leaving young people at the mercy of the future. With proposals lacking, the challenge for Italy’s government and its opposition is to formulate credible and feasible long-term proposals to change a system that is becoming less and less sustainable.

“I am disillusioned but still believe that change is possible,” finishes Andrea with a rueful smile, hoping to remain afloat in a society and in a country that seem to be slowly sinking.

The war in Ukraine and the pandemic have transformed the economic landscape of Europe. Using Eurostat data, Cristina Suárez Vega looks at the demographic factors affecting Europeans’ ability to deal with the fallout.

A series of historic records – that is one way to describe what has happened to the European economy in 2022, though not in a positive sense. In September 2022 inflation in the Eurozone reached 10.9 per cent, its highest rate since 1997. You can now buy far less with one euro than you could in the past. This is nothing new; any product is (almost inevitably) susceptible to upward changes in its price. What has come as a surprise to the European Union is how the cost of living has soared so quickly, jeopardising both the economic health of individuals and societies and the transition to cleaner energy.

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Aside from the pandemic, there is a key factor at play here: the war in Ukraine. Economic sanctions imposed on Russia by the EU have stopped the importation of gas into Europe, which has indirectly raised the international market price of gas across the continent. As a result, energy prices grew by 37.5 per cent in August 2022. In 2021, by comparison, there was an increase of only 14 per cent for the same month. The difference is even greater if we take a closer look at different EU countries. According to Eurostat, Denmark has the highest electricity prices in the EU followed by Germany, Ireland, and Belgium, whereas Bulgaria and Hungary have the cheapest.

Eurostat has calculated the evolution of consumer prices between 2000 and 2021 to show that, on average, prices rose by 46 per cent. For life’s essentials, the increase was even more pronounced. The cost of energy in 2021 was 111 per cent higher than in 2000. Education has become 95 per cent more expensive. Rent and utility costs rose 72 per cent. The country worst affected was Romania, with a total cost increase of 311 per cent.

We can see a precise turning point: mid-2020, when the pandemic began to take its toll on European economy.

Looking back over the past eight years, prices in the energy sector (crucial for the green transition), together with the cost of housing, have been the most unstable. The same is true for the price of food, although to a lesser degree. Having increased only 2 per cent in 2018, food inflation has surpassed 14 per cent in 2022. If we look closely at the graph above, we can see a precise turning point: mid-2020, when the pandemic began to take its toll on the European economy.

Of course, the pandemic did not have the same effect on all countries. Given the diversity of socio-economic situations in Europe, it is unsurprising that the associated price changes have varied greatly across borders. Energy costs – which rose far more steeply than those in other sectors,^[1] aggravated by the war in Ukraine and extreme climate events – increased by 133 per cent in Turkey (although the country’s economic instability has driven prices up past 30 per cent in all sectors), 100 per cent in Estonia, and 88 per cent in the Netherlands between 2021 and 2022.

Young women lose out

If prices rise and incomes do not follow suit, the result is an increase in poverty levels. But the risk of poverty is not the same across all demographic groups. As demonstrated by the graphs on page 50, poverty in the EU is gendered, and it is women who are most affected. Except for people below the age of 18, the percentage of women at risk of poverty – defined as those whose income falls below the poverty risk threshold, set at 60 per cent of the average national income – is greater than that of men. This was the case before the pandemic, and it still holds today. For men between the ages of 25 and 29, the risk of poverty has grown by more percentage points than for women of the same age, but the actual at-risk percentages for poverty remain higher for women.

The greatest difference between the at-risk rates for poverty for men and women can be seen in the 65-and-over age group. Overall, this age group’s poverty risk increased only slightly between 2019 and 2021. However, the gap between women (22 per cent) and men (16 per cent) stands out as particularly large. The gender pay gap and a greater amount of time dedicated to care work and their effects on pensions entitlements are some of the key factors responsible for this discrepancy.

The percentage of women at risk of poverty is greater than that of men.

In terms of age, the risk of poverty is high- est among young people. The group with the greatest percentage of people at risk of poverty in 2021 was those between the ages of 18 and 29, comprising 33.7 million men and women in total. Responsible factors include poorer working conditions and lower salaries than previous generations, who were able to build a larger financial cushion during previous, more economically robust periods.

Economic fluctuations do not affect all income groups equally; the lower a person’s income, the less able they are to deal with inflation. This means that ultimately it is women and young people – and especially young women, who find themselves at the intersection – who are likely to be most severely affected by the current cost of living crisis.

The idea that wage increases will push up prices is a common inflation fear. But rather than a “wage-price spiral”, it is Europe’s vulnerability to global shocks that is the key factor in inflation and its low wages that exacerbate the cost of living crisis.

This article is part of a series on the “Inflation Debate”, looking at different understandings about why prices are rising and approaches to what should be done about it. Richard Wouters and Danae Kyriakopoulou also contributed.

Inflation is high. The United States published an annual rate of 8 per cent in August 2022, while the Eurozone saw an average of 10 per cent in September. The European average masks significant differences between member states. France’s 6.2 per cent rate is the lowest in the Eurozone, while inflation in the Baltic countries topped 20 per cent. In response, the US Federal Reserve and the European Central Bank are raising interest rates, accepting a rise in unemployment as the cost of pushing inflation down.

High inflation reduces purchasing power when incomes do not rise in step with prices. Understanding the mechanisms at work is essential to calibrating the response; the return of inflation has not eliminated the need for a green transition, public services, and reduced inequalities.

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The inflationary “threat” is a favourite bogeyman of conservative and neoliberal economists. Quick to be moved by inflation, for them it is above all a question of defending savers and wealth and preparing the ground for austerity policies. But this vision fails to identify the actual reasons behind price rises.

It was not wage growth that caused the current level of inflation but rather excessive dependence on globalisation. Pandemic-related disruptions to global supply chains, the energy crisis intensified by the Ukraine war, massive speculation, and rising shipping costs have produced drastic cost increases for many companies. Retail price rises show that these costs are being passed on to consumers, allowing companies to maintain or even increase their profit margins. When profit shares increase, the wage share falls automatically. For the Eurozone, Eurostat estimates that this will drop from 57.6 per cent of GDP in 2020 to 54.9 per cent in 2023, the lowest level since the launch of the euro. To prevent nominal wages from rising in the name of the fight against inflation is to accept and encourage this trend. Declining wage shares are underpinned by a series of factors: restrictive European economic policy, declining trade union coverage, the effects of international competition on labour markets (weaker labour law, higher unemployment, short-term contracts), and the dominance of large corporations in certain sectors.

The fight against inflation goes hand in hand with the green transition.

In such a context, raising interest rates to fight inflation risks inflicting economic damage, reducing economic activity, and increasing unemployment. A terrible recession would be needed to bring inflation down. Admittedly, governments are adopting emergency measures to cushion the rising cost of living. But this support is insufficient for the most vulnerable. Often it benefits everyone without reducing inequalities nor encouraging changes in behaviour (as seen with fuel subsidies). Furthermore, these subsidy policies will not last: calls for budgetary rigour will get the better of exceptional measures.

Alternatives are necessary. Rather than blindly attacking inflation with restrictive monetary policy, we must rethink the hierarchy of economic policy objectives. The current cost of living crisis, which follows on the heels of the health crisis that underlined the importance of frontline workers, points to the need to rebalance the wage structure. For inflation cannot be understood without analysing the balance of power between workers and employers. When the scales are tipped against workers, wages receive less of the valued added relative to the return on capital. This is precisely what has happened in Europe since the 1980s.

The harmful effects of inflation on real wages can thus be counteracted through indexation – a mechanism used by many European countries in the past. Indexation will be all the more essential if inflation persists, especially considering that the wage share has been shrinking for years. Large companies, especially in the transport and energy sectors, have been well-positioned to benefit from current inflation. As such, price controls should be considered where and for as long as necessary and excess profits such be heavily taxed. Going forward, European economies need to be made less vulnerable to global shocks, the real drivers of inflation. This goal calls for reduced dependence on imports – in particular energy – and greater investment in transport, renovation, and agriculture, as well as supportive trade policies. The fight against inflation goes hand in hand with the green transition. Squeezing wages is not the answer.

This article is part of a series on the “Inflation Debate”, looking at different understandings about why prices are rising and approaches to what should be done about it. Richard Wouters and Danae Kyriakopoulou also contributed.

The upheaval that was forecast as the inevitable consequence of our regime of accumulation is well and truly upon us. Today, it is not only our politics and institutions that seem to be unravelling but every aspect of our daily lives. How can we exist in an age of multiple escalating forms of disruption? Can we envisage ways to work with and through that disruption, advancing freedom just as it seems most under threat?

How does life feel right now? Disruption, defined as “a rending asunder, a bursting apart, forcible separation into parts”, seems a theme. Taking the broad brush to an era in this way allows us to sweep up all manner of movement and emotions, capturing them into what Welsh cultural critic Raymond Williams called a structure of feeling: “the culture of a period … the particular living result”. These structures have the power to accent historical development, quietly define how it is understood and, to some extent, direct it.

Writing back in 1983, Williams described “a much less confident and much more unexpected world”, one scarred by the turbulence of the 1970s and the existential threat social movements posed to the capitalist order of Fordism. As the “age of uncertainty”, this generalised unease would prove fertile ground for market fundamentalists to shock national economies into a new, globalised order.

Third Way neoliberalism, in contrast, emerges as the cock of the walk – slick, dynamic, loose, and liquid. Its proponents ascended to face the turn of the millennium with the compromise of the century and a promise to eschew ideological friction in favour of technocratic maturity. Evolving from its original combative form to the sheeny aesthetic of the 1990s, it marked, in political economist Will Davies’ phrase, “the disenchantment of politics by economics”.

From the financial crisis through to Brexit, Trump, and the upending of established political parties across Europe, institutional earthquakes defined the 2010s, etching out the slow degradation of neoliberalism into … something else. But disruption perceived is not the same as disruption experienced. Post- pandemic inflation has brought more intimate enclosures – the household and the quotidian – to the fore of public debate. Protest, policy rupture, and climate impacts all now converge, impacting deeply personal prerogatives – the weekly shop, the commute, paying the bills.

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The age of shocks

Three disparate fronts of contemporary disruption can be identified. First, and most obvious, is the havoc caused by the rising cost of living and the energy crisis. EU inflation currently exceeds 10 per cent, and European governments have earmarked 500 billion euros in an attempt to cushion the blow of trebling energy bills. It is easy to forget that these trends pre-date Russia’s invasion of Ukraine. Their supposed temporary nature – a refrain of struggling incumbent politicians above all – is belied by a number of factors. To the extent that inflation has been driven by post-pandemic demand, this itself is a product of the expansion of markets into novel territories (so-called “zoonotic spillover”) and the predictable result of “blowback from our unbalanced relationship to nature”. Economists have made similar arguments tracing inflation back to a series of environmental shocks – from the summer drought in Europe to heatwaves, flooding, frost, and even locust plagues – all contributing to supply chain disruption and cumulatively rising prices in dispersed and unpredictable ways. Only one thing is guaranteed: as climate impacts worsen, macroeconomic instability becomes more likely, and with it the full array of micro-consequences.

Climate policies have always been quite powerfully framed as an attempt to stave off exactly these environmental shocks, and all the economic consequences that follow. But smooth pathways of transition and building resilience were rejected long ago. More radical state interventions to leave behind fossil fuels and incentivise behaviour change are now, by necessity, a second form of disruption themselves. The recent efforts of German Vice-Chancellor and Economy Minister Robert Habeck to wean the country off Russian gas imports – including encouraging citizens to cut their domestic consumption – have contributed to a revival of the far-right Alternative für Deutschland (AfD) and its long-standing critique of the energy transition as the ideological project of nosy environmentalism. Accusations of a “climate dictatorship” proliferate, and the AfD is whipping up concern about the prospect of a Wutwinter (winter of rage). Pandemic restrictions are an important precursor here, as in Spain, where far-right counterparts Vox rail against the centre-left “progressive dictatorship” and “all the freedom-killing laws”.

The threat portended by the French gilets jaunes in 2018 to 2019, therefore, remains considerable. In a context of inequality and prolonged inflationary pressures, and in the absence of a major programme of redistribution and reform, climate policies are liable to encounter a vociferous response. Even interventions more attuned than tax rises to systemic injustice are vulnerable to deeply charged hostility. The reallocation of road space to encourage walking and cycling, for example, has accelerated recently in major European cities – from Anne Hidalgo’s dream of a 15-minute Paris to Barcelona’s superilles (recaptured intersections) and Berlin’s Kiezblocks. Their social dividend makes them broadly popular, but the disruption to customary patterns of consumption drags them into a familiar, culturally infused dispute. In the United Kingdom, no amount of positive framing – “low-traffic neighbourhoods”, “people-friendly streets” – has managed to prevent a wave of apoplectic offence among a minority of opponents. Objections are characterised by a misapprehension of their number – the initiatives are, according to most polls, unbothersome to a majority – but also the transmutation of a policy of tweaked travel incentives into an authoritarian denial of rights. That is, the right to drive an internal combustion engine unhindered through a dense, congested city.

Political historian Annelien De Dijn has contrasted this conception of freedom – “being able to do what you want without state interference” – with its democratic predecessor, the “liberty of the ancients”, at the core of which are self-government and the extension of collective empowerment. While no invocations of freedom carry quite the same motherlode of political entitlement on this side of the Atlantic, the devotion to such a private mode of freedom, with property rights at its core, does limit the capacity of the “big green state” to act. Behavioural change is estimated to play a role in two-thirds of required emissions reductions to net zero. That leaves governments with no desire to interfere with customary patterns of consumption – our “imperial mode of living” – facing an impossible contradiction.

Protest, policy rupture, and climate impacts all now converge, impacting deeply personal prerogatives.

A third and final form of disruption is the most calculated: the deliberate interruption of livelihoods pursued by social groups for political and economic ends. Climate activists are the most obvious actors, with growing numbers rejecting the civility of the last decade and springing forward with increasingly creative intrusions. Andreas Malm’s How to Blow Up a Pipeline must take some credit, launching a trenchant case for sabotage into a movement with an almost spiritual fidelity to strategic non-violence. From throwing mashed potato at a Monet in Potsdam, cementing golf course holes during a Toulouse drought, and blocking traffic in Bern, to “extinguishing” SUV tyres in Turin, ratcheting desperation characterises the current wave of activism. Others continue with legal but increasingly antagonistic activity, such as Green New Deal Rising’s haranguing of politicians in public fora, deploying “youth authenticity” in pure form, and forcing their targets, on shaky video, to “pick a side”. There is strength in this tactic’s disassociation of target from audience: most of us can identify with motorists, even fine art, but not politicians. The less popular the individual, the more comfortable the audience.

These acts remain disparate and disjointed, at least in how they are collectively perceived: as a mishmash of misguided instigators. The public reaction is often emotional, ranging from anger at the moral implications of road-blockers (that you, driver, are guilty) and deep offence to cultural and liberal sensibilities of the (practically harmless) attacks on art to the trite assertion that disruption ultimately “hinders the cause” (often a poor imitation of empathy). Online reactions show the extremes. Threats of unhinged violence sit alongside nihilistic promises to burn extra fuel tomorrow out of spite: “masochists masquerading as sadists”, to use writer and activist Richard Seymour’s phrase. Others, particularly bystanders, have been more supine, even oddly curious; an uneasy political consciousness playing out in real time. To the extent that the message of climate disruptors is cohering, it seems to be on the powerful injunction and resolutely populist rallying cry proposed by Davies: “Stop, you’re killing us!”

Finally, ramping up in parallel are workers’ strikes across Europe, directly responding to the cost of living crisis but willing to broaden their claims beyond sectoral industrial disputes and parliamentary politics and expand campaigning infrastructure to match. The “Enough is Enough” campaign launched by UK trade unions, for example, has a set of demands that go beyond wages to encompass food security, public housing, and wealth taxes. The movement signed up half a million supporters in its first month – a taste of the challenge it could offer, in tandem with climate activists, to a Labour Party adopting increasingly conservative positions. The turn towards industrial disputes with a political character reveals a wider strategic pivot among parts of the Left, away from Green-New-Deal populism and towards a renewed focus on antagonism and leverage. The secretary general of the British rail workers’ union, Mick Lynch, stormed a spate of late-summer media appearances with no-nonsense refrains such as “Workers shouldn’t have to beg.” This is disruption as last-ditch democracy, when all other forms of exercising political or economic agency have been constrained or exhausted. But unions also find strength in their rhetorical technique: eschewing moralism, they deal in interests. While climate activists do not have the same direct instrumentality, they might learn from this all the same.

Power of consumption – a hollow consolation

To draw attention to these recent commotions and their personal effects is not to overlook the very significant civic dislocation of the previous decade. It should not undermine the widespread and material devastation caused by the financial crisis and the orthodoxy of European austerity that followed, from the degradation of public services to the stagnation of wages, nor the very personal consequences of the pandemic. What is more novel is the imposition of current socio-economic disruption – at a society-wide level – on the very arch-entitlements that neoliberal capitalism was supposed to afford.

To understand this, we must acknowledge that as much as political analysis concerns itself with the experiences and movement of “voters”, the true primary subjectivity in contemporary society is that of the consumer. In Hegemony Now, political theorists Jeremy Gilbert and Alex Williams argue that the political alliance that buttressed neoliberalism was held together by a deal for “consumer consent”: in exchange for the loss of community, workplace democracy, and visions of long-term social progress, citizens were compensated by new forms of agency over leisure and lifestyle choices.

One clear demonstration of this today comes in the form of popular efforts to translate major, ostensibly public, economic moments – government budgets, financial shake-ups, entire manifesto launches – into private, consumption-based questions. This is a discourse not just individualised but reduced to a matter of pure purchasing power (in French pouvoir d’achat, used as a stand-in for cost of living), paving the way for repeated political commitments to keep “your money in your pocket”. All other matters of power and wealth and distribution can be dismissed as ethereal, reserved to a distant public sphere. Similarly, the world of work is posited not as the site of the relation to systems of production, nor as the organisation of workers within it, but as the facilitator of that banal and brutal flattening of human experience: “to get on in life”.

More radical state interventions to leave behind fossil fuels are now forms of disruption themselves.

“Public consent to the hegemonic neoliberal programme”, Gilbert and Williams conclude, “depended on the ability of that programme to deliver a continuous expansion of the capacity of the citizenry to consume”. It also rendered individuals complicit by default, able to benefit from their relatively high status and consumption but more or less unable to escape the omnipotence of acquisitive culture as expressed in advertising, TV (now social media), and political communication. The Salvage Collective have argued the “tragedy of the worker is that, as long as she works for capitalism, she must be her own gravedigger”. The double tragedy is that we are implicated in this accumulative telos; the “Anthropocene” implies that this was all for all of us.

That capacity to consume comfortably and freely, one remnant of citizen privilege under neoliberalism, is now under serious threat from the disruptive forces of climate impacts, policy rupture, and social discord. Far-right authoritarians in Spain, Sweden, and Italy (the only EU country where wages have shrunk since the 1990s, meaning they know neoliberal rot better than most), all made hay with the theme of order in recent elections, promising variously to stop immigration, defeat the “enemies of civilisation”, increase police funding, and prevent the general corruption of “ordinary people” and traditional values. But European economies are likely to continue to discover exactly how capitalism actually works in so-called emerging markets, despite best efforts to insulate the European “garden” from the jungle that diplomats imagine surrounds it.[1]

A catalyst for change

What matters, therefore, is not whether disruption occurs, as it is certain to continue. “In the 21st century, all politics are climate politics,” wrote the leading American Green New Dealers in 2019. The unfortunate corollary is now clear, just a few years later: all politics must also become disaster politics. In salvaging what we can, the crucial questions are now how this disruption is felt, for what purpose is it instigated, and whose interests are protected.

For Greens and the Left, working through this disorder means refusing to shirk this antagonism and this more divisive ecology. Established parties – both in power and opposition – can give considerable institutional cover to disruptive forces through both qualification and justification of their actions, attesting to the clear-eyed assessment of the desperate environmental and economic chaos they face, the inadequacy of alternative, more respectable tactics, and the ultimate reasonableness of their demands. If we had acted when people said we should act, if the system had changed when people said it should, we would not be where we are. Particular activities and targets can be condemned in the same breath; indeed, selectivity itself legitimises the principle of some kinds of deliberate disruption. As research cited by Malm and others has found, even a backlash against the protesters does not necessarily harm the cause; a radical flank recruits activists, “seeds” the agenda and makes other actors appear more reasonable. Those pitched carefully (targeting upstream infrastructure and luxury emissions, factoring in class and racial analysis, and making clear allowances for vulnerable groups) can, like some surprisingly popular labour strikes, cleave public opinion in politically productive ways.

Another avenue is to emphasise the “alternative hedonism” of more utopian iterations of the Green New Deal. New modes of living to counter and adapt to disruption do not require declinism; instead we might call it reclinism. More public luxury, better leisure, and of course less work: these can be the compensatory tenets of material degrowth. Given the role of consumption-as-agency in neoliberal culture, environmental policies that also liberate and democratise carry a potent appeal. Greens need neither hegemony nor a “historic bloc” to begin to make this case; local initiatives like Barcelona’s superilles restore intersections not as pretty enclaves but as genuinely social and public spaces. Our crisis follows the hollowing out of democratic institutions: it follows that distributed agency and empowerment are important corollaries of economic justice, something state-centred visions of the Green New Deals held as a weakness.

Finally, Greens should not overlook the role of civic voluntarism as a less intrusive path to behavioural change, without softening any critique of elites. As the pandemic illustrated, the sense of collective endeavour – while it could be maintained – allowed governments to rely on public adherence to constraints far beyond dominant libertarian expectations. Again, as Habeck is discovering in Germany, asking nicely is not without its political risks. But some expression of “limitarianism” will be critical to any eco-socialist programme, and under the right conditions it can privilege solidarity over enforcement.

“End of the world, end of the month” – two battles, once in opposition, are now converging. Powerful stories are yet to be told about what got us here, why we feel as we do, and how we find our way through the wreckage.

With the world still reeling from the pandemic, Russia’s invasion of Ukraine in February 2022 unleashed a new level of suffering and horror. Not only is its human cost incalculable, with the people of Ukraine the first victims, the war has deepened the global energy and food crises, though both precede the invasion. The disasters keep on coming and even the weather has taken on a new, menacing role. The droughts and floods in Europe and many world regions are reminders of the dangers of a changing climate. Combined with an economic system that allows an outsized role for financial speculation, the collision of these events has forced the cost of living upwards across Europe and the world. The effects have proved cumulative, tipping economies into generalised inflation that risks becoming recession.

A break with 30-year trends, the return of inflation to European economies has plunged many people into poverty and put pressure on household budgets for much of the middle class. Driven in particular by energy and therefore also transport prices, the distributional effects of the rising cost of living reignite the conflicts most visibly expressed by the gilets jaunes movement in recent years. Will the poorest have to pay the price for Europe’s energy transition? These stresses are all the more acute considering that life has become increasingly insecure in recent years, with soaring rents in major cities and the hardships that many people, especially the young, experienced throughout the pandemic.

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More than a simple monetary phenomenon, price rises contribute to an uncertainty that pervades people’s outlook on the future. Sri Lanka was the canary in the coal mine. In July, protestors driven to revolt by unaffordable fuel prices stormed the presidential palace. A photo of a face-masked protestor, waving a loaf of bread and standing before flames lit outside a government building, encapsulated the mood. European countries may be rich enough to shield much of their societies from the full extent of these shocks – at a cost for the rest of world – but even with this support many people cannot meet their basic needs. In this context, a sense of impoverishment can prove politically toxic. In September 2022, far-right parties were the main winners of the Italian and Swedish elections, tapping into widespread dissatisfaction with promises of hard borders, energy security, and a firm hand.

Explaining the economic situation comes with political stakes. A focus on inflation leads you down the road that central banks are already taking: raising interest rates and thereby risking the jobs of some for the purchasing power of the majority. On the other hand, a framing based on the “cost of living” politicises inflation, pointing to how rising prices undermine access to essentials such as food, housing, transport, and energy. Nevertheless, talking about the cost of living still implies that access to these essential rights should be a matter of budget balancing for households.

Who do people turn to in such times? The classic conservative answer is to tighten our belts until the economic situation improves. Whereas for the traditional Left, fighting falling living standards is a simple matter of pay packets and redistribution. On the extremes, far-right and populist forces are always present to offer easy answers to whoever will listen (helping Ukraine is too expensive; blame the migrants).

Green politics has always sought to be radical – in the literal sense – understanding and tackling problems at their roots. This summer, French president Emmanuel Macron proclaimed the “end of abundance”, seeing our confluence of crises as signs of coming scarcity. For some ecologists, his analysis rang true. Indeed, the current economic turmoil cannot be explained without factoring in resource constraints, unpredictable climatic conditions, and disrupted global flows. In short, planetary boundaries. But what the diagnosis fails to offer is the emancipatory vision that has always been at the heart of green politics. For Greens, achieving social justice and ecological sustainability relies on defining new approaches to prosperity.

The long-awaited social core of the Green New Deal is more urgent than ever.

Amid a cost of living crisis, the Greens should not bring a message of austerity and hard times ahead but stand up for social protection and redistribution, as well as asserting the possibility of providing for our needs differently. For public services, think of the rail fares slashed in many countries. For households and businesses, subsidies provided to renovate and save energy just when people need it most. At the level of communities, those renewable energy cooperatives supplying cheap electricity in decentralised and democratic ways. From precarious individuals depending on vulnerable systems over which they have no control, the Greens can reclaim rights and protect living standards by building shared institutions based on resilience and abundance.

Throughout history, social rights have often been extended in times of war. Europe’s firm solidarity with Ukraine is now driving the continent’s efforts to break free from fossil fuels. This transformation cannot succeed without deepened solidarity within and between European societies. More than temporary relief, they need a new direction. After 2008, the call for a Green New Deal was not immediately taken up. But it went on to inspire an investment-led approach that continues to shape the green transition in Europe and the United States. The long-awaited social core of the Green New Deal is more urgent than ever. In driving this point home, the Greens can take up that leadership role once more. Investment in the common good and the green transition go hand in hand. Europe’s future hinges on radical solutions to uncertain times.

With the social question burning, parties across Europe are striving to respond to the urgent needs of citizens. The task brings what are at once challenges and opportunities for Green parties. Whether in power or opposition and across levels of government, the first is the window to force through change with speed and urgency. The same logic may require compromise on red lines, as the extension of nuclear power plants in some countries speaks to. But the current moment is a chance to make leaps towards establishing new solidarity mechanisms and social rights while accelerating public investment in the green transition. It is a matter of finding the openings and seizing the moment. Relationships with other forces and allies are a second challenge. Trade unions and climate activists have pivoted to new forms of militancy. Green parties will have to navigate and channel the demands of these constituencies to achieve their own objectives, thus entering a more conflictual terrain. A third challenge is to be the political force that connects the levels of European politics and builds a real sense of European solidarity between societies. The social agenda at the European level has gained renewed momentum but its success rests on national support. The capacity of local, national, and European authorities to respond to social challenges also depends on effective cooperation across borders. Coordination is the only way to manage the tensions and imbalances between European member states. If the Greens do not do it, then who will?

Covid-19 has triggered the largest economic recession since the Second World War. Governments injected billions into the economy and paid wages to protect the jobs of millions. EU countries took on shared debts for the first time. Many bold claims followed: austerity is dead, globalisation is a thing of the past, and the European Union has made a huge stride towards federalism. Are we living through an economic paradigm shift? We spoke with Guntram Wolff, director of the think tank Bruegel, about Europe’s economic prospects, the recovery fund, and Europe’s ecological and digital transformation.

Roderick Kefferpütz: Covid-19 is not only a health crisis but also a huge economic shock. What lies ahead in the coming years?

Guntram Wolff: This is the biggest crisis since World War II, and we are not out of the woods yet. The recovery is fragile – it is gradual and very cautious. It will remain so as long as there is no vaccine available. Without a vaccine, patterns of consumption and production will remain changed. We are in for another very difficult year. Economic performance will still be well below trend in 2022. Even when the vaccine arrives, it will take time until normality returns.

Is a major jobs crisis yet to come?

That is the key question. I fear the worst may still be ahead of us. The strong response by the European Union and successful furlough schemes stabilised labour markets across Europe. But they cannot protect jobs forever and we don’t know how many firms will declare bankruptcy next year, shifting people from furlough into unemployment. It’s a real risk.

Is the EU’s recovery package the right response?

The immediate focus for recovery needs to be on stimulating demand. But that is not the job of the EU recovery package – it is the job of the national fiscal authorities that borrow money on financial markets to support economies. The recovery package only facilitates this process. The Next Generation EU plan tries to help countries with weaker economies and greater debt, who may not have the necessary fiscal space to stimulate demand. It basically helps those countries to borrow and spend money by acting as a financial facilitator. But this programme is not a short-term, anti-cyclical instrument because payouts will not happen for a while.

How would you evaluate the package in terms of quantity and quality?

Looking at the numbers, this package is significant and appropriate. Some countries in Central and Eastern Europe will receive more than 10 per cent of their GDP, while EU member states in Southern Europe will receive 5 to 8 per cent, or more in the case of Greece and Cyprus. It is a major transfer of financial resources to help those countries stay solvent. The package also contributes to bringing down interest rates. Financial markets have welcomed the fiscal response as a strong signal of unity and European stability, and that has helped bring down spreads. That really benefits countries borrowing huge sums of money.

The quality of the recovery package is more difficult to evaluate and will depend on its implementation. There are big buzzwords attached to the plan – “green”, “digital”, and “social” – but there is no good governance structure in place to ensure the money is well spent. This is still being negotiated. The proposal agreed upon by the European Council is too imprecise and technocratic. Of course, there will need to be a technocratic process and policy coordination, but the EU recovery package particularly needs political accountability. The European Parliament will have to closely monitor how the money is being spent and it should have the right to stop payouts in extreme cases. EU money needs EU-level political accountability.

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Will the EU countries be able to use all this money and pour it into shovel-ready projects?

That is a big concern. Some member states will struggle to spend the money. For instance, Italy, Spain, and Croatia take a long time to spend their allocated structural funds. Usually they don’t even manage to do so within the EU’s seven-year budget framework. In our work at Bruegel, we have shown that countries like Italy only manage to spend around 40 per cent of their allocated funding. Now, of course, the recovery package wants to spend this money very quickly but that may work to the detriment of its quality. It is a dilemma.

Some have argued that this recovery package is Europe’s “Hamiltonian Moment”, akin to the 1790 agreement between Alexander Hamilton and Thomas Jefferson, which turned the US from a loose confederation into a genuine political federation. Do you agree?

It’s a big word. The package is certainly significant but it’s not comparable to what Hamilton did in the US. It is significant because it changes the nature of the monetary union by introducing an explicit insurance mechanism and allowing borrowed money to be transferred to countries hit by the pandemic. This crisis mechanism will be a precedent whenever there is a comparable major recession in future.

Are we ever going to pay back these huge sums of money?

That is the wrong question. The real question is: should we ever pay back this money? The European Council wants it to be paid back. But my prediction is that in seven years, when it comes to discussing the repayment as part of the next EU budget (which will start in 2028), they will postpone repayment by seven years. And that is appropriate because this debt is cheap, long term, and helpful. It helps Europe in establishing a common debt and capital market and it strengthens the euro as an international currency. I don’t see any reason why this debt should be repaid. Look at national debt – that is almost never repaid but simply rolled over. In the end, it’s about growing out of debt.

But what about inflation?

What inflation? There isn’t any. Quite to the contrary, all market indicators show that this pandemic has been highly deflationary.

This crisis mechanism will be a precedent whenever there is a comparable major recession in future.

So on the economic side, there is no reason to worry about debt or inflation linked to the EU recovery package. What about the politics? In Europe, debt and austerity politics divide North and South. Could this package – in the coming years – bring forth a new debt debate that threatens European unity?

Indeed. My worry is that the EU will not put in place strong governance mechanisms that ensure accountability. As a result, this new money could make less of a difference in terms of growth and sustainability than hoped for. It is easy to see how this would then turn the narrative in Europe, in Northern Europe especially, against these kinds of EU spending programmes. Germany is particularly relevant. It was a huge step for Germany and Angela Merkel to change their position. When reports on the misspending of EU money start appearing, the narrative could easily become “never again”.

You mentioned that the recovery package comes with big buzzwords linked to the ecological and digital transformation. Does it need to be flanked by an active industrial policy?

This is one of the most difficult questions and I wish I had a good answer. The discussion on industrial policy in Europe is very ambiguous. There is no defined industrial strategy, goal, or orientation – there is only a handful of individual documents, which do not make up a strategy. For some areas, there is a clear need for an active industrial policy. Take the ecological transformation. To stop runaway climate change, we need to obtain all the necessary green tech; carbon pricing will not suffice. Carbon pricing needs to be complemented with a green industrial policy that can develop the necessary technologies and business models faster than the market would do alone. Europe needs to make real progress here.

As regards the digital transformation, I am more sceptical. What would a digital industrial policy mean? Of course, there is a need for a regulatory policy, an investment policy, and setting the correct framework conditions. But what else could industrial policy bring to the table? There is some talk of setting up a European cloud, but who would implement and manage this? The state is not a good entrepreneur so I do not see this happening.

During the pandemic, the state has taken a massive stake in the economy. Will we ever see it retreat from this position and allow some Schumpeterian “creative destruction” to take place?[1]

The core function of a state is to provide stability in times of major stress, act as a lender of last resort, and support the private economy. What the state has done since the pandemic began is completely appropriate. Schumpeter did not say that the state should retreat at a time of a historic supply and demand shock, allowing for massive destruction of existing capital. What he advocated was a competitive environment in which new firms have a chance to emerge and unproductive firms can be driven out of the market through that competition.

Reshoring and localised production are not the answer because they make things more expensive, simple as that.

As we move into 2022, we must evaluate whether the state is so dominant that new firms cannot establish themselves. At the moment, they cannot emerge because of the pandemic and recession. But at what stage should state support and state ownership be reduced? This is a conversation that we need to have because it is not up to the state to run major companies. The state will have to retreat at some point, but I do not think that time is now. We should have this conversation in late 2021 and 2022.

This pandemic highlighted the fragility of international supply chains. Should the state promote the relocalisation of production?

No. Reshoring and localised production are not the answer because they make things more expensive, simple as that. Of course, we need to increase our resilience, but we need to find the most cost-efficient way to achieve that. I think we can do it by increasing our stocks and reserves in critical goods, such as medical supplies, or by promoting the diversification of global suppliers. But deciding to put up our borders and produce everything domestically would be a major, expensive shock that would be bad for our welfare and our economies.

So no paracetamol production in Europe, then, as French president Emmanuel Macron has advocated?

Let us take face masks as an example. Face masks were sorely lacking during the first two months of the crisis. Now it would seem appropriate to have greater stocks in Europe. But does it make sense to start up face mask production in Europe, where they could cost something like 3 euros each, instead of buying them from China, where each mask would cost around 3 cents? We must look at the costs of our policy choices, too. In this case, more stocks and perhaps a second supplier outside of China sound like better options. The EU is a net exporter of medical goods – do we really want to become protectionist and risk losing exports?

The global economy has entered a geopolitical phase and the spheres of security and economy are increasingly linked. In this context, focusing on cost efficiency can cost you geopolitically. If the only concern is cost, for example, then Huawei should be allowed to build the 5G network.

Security concerns need to be taken seriously. We did not do this sufficiently in the past. Especially when it comes to core infrastructure, it would be wrong to depend on one supplier. And if there are concerns about the security of existing infrastructures, then that is a problem that needs to be immediately addressed. I would also agree that dependency on countries for the imports of critical supplies, such as rare earths, needs to be scrutinised, and alternative suppliers established.

However, it is economically and politically dangerous to want to “decouple” Europe from other economies. Economically dangerous because it undermines our future economic prospects, and politically dangerous because economic decoupling tends to make military confrontation more likely. Instead of decoupling, the EU needs to work on having a stronger and unified position that allows them to retaliate and increase the cost to trading partners of playing geo-economic games. In other words, we need better EU instruments on investment screening, competition, and state aid control, as well as a stronger international role for the euro and foreign policy.

The year 2020 has underlined the critical importance of sectors such as healthcare. Hasn’t the pandemic also demonstrated the need to change our economic priorities more broadly?

I agree that it would be extremely useful to discuss what is important for society and give greater attention to welfare and wellbeing in general. Part of the issue is measuring, or the lack thereof. We do not even measure the development and broad impact of the pandemic at the European level. Eurostat, the organisation responsible for providing statistical data on the EU member states, has no numbers on this. It would be extremely useful, for example, to break out of the daily reporting of GDP and see the bigger picture, including inequality, CO2 emissions, and social welfare. Green, health, social, and inequality indicators should figure prominently in the policy debate and shape the political agenda.