Dear members, friends and partners,

Inflation in Europe is continuing to soar to record highs. Driven by the energy price spike, rapid increases in the price of basic commodities are putting our living standards at risk. Citizens see their financial security and purchasing power at stake, while low and middle-income households are being exposed to poverty risks.

If it is not dealt with now, inflation will cause irreversible damage to our societies. If no measures are taken to re-balance disposable household incomes, Europe and its citizens will face dramatic consequences for the wealth that they have worked hard for during years of even decades.

To avoid an imminent large social unrest across Europe that continued inflation could bring, we need to determine appropriate mechanisms to protect citizens and support those in need. Now more than ever, Europeans need a strong European Union that will put the people again at the core of its policies – despite all crises around us.

In our recent letter to the Czech Council Presidency, CESI stressed the need for concrete and immediate interventions to bring down energy prices for citizens, workers and their families. In advance of the scheduled extraordinary Council meeting of national energy ministers on September 9, we asked the EU leaders for affordable gas and electricity prices and effective steps to maintain workers’ and citizens’ purchasing power. Unfortunately, one month later, we are still waiting for tangible solutions at the European level.

We continue to demand bold initiatives by all national and EU stakeholders. Together with policy makers and social partners, the European Central Bank should initiate discussions on how it may effectively control inflation without limiting the post-Covid economic recovery and rushing Europe in a renewed recession.

We believe that governments must proceed to targeted relief measures to protect low- and middle-income households and callsfor statutory minimum wage increases that compensate for inflation. Also beyond, middle-income earners should see wage increases to mitigate effects of inflation.

At national level, our members have already launched proceedings to claim salary increases. The dbb in Germany, CSIF in Spain, CNV-Connectief in the Netherlands and CGFP in Luxembourg, for instance, have asked for a meaningful adaptation of the salaries to compensate for the rises in prices and dramatic losses of purchasing power.

However, we know that – even if this is an extremely important first step – salary increases are not enough. To overcome this very worrying acute situation, we need a systemic approach with a mixture of several measures, including targeted tax reductions and lowered VAT-rates on (a determined quantity of basic consumed) gas and electricity, expanded social tariffs on energy bills and caps on the energy prices in general – counter-financed by a solidarity contribution on excess profits of energy companies,. And, of course, we must find ways to work on the energy supply side to ensure our independence from Russian energy and invest in new collaborations and partnerships, and we must invest quickly and considerably in energy efficiency and green energy sources.

Unfortunately, multiple crises over the last years have limited countries’ ability to offer adequate support to their citizens. As Kristalina Georgieva, Managing Director of the IMF, states in this year’s IMF Report, “…high debt and tightening global financial conditions make it even more difficult for governments to support them (citizens). In addition, there is a sharply increased risk of the world fragmenting into geopolitical and economic blocs that could reverse decades of gains in living standards.”

The stakes are high and as the positions, also demands and strategies differ strongly from one member union to another, we can only learn from each other. What is feasible, what is realistic, and what is the least we can do for the affiliates of our members?

I invite all CESI members to participate next month in a timely event on the surging inflation, its impacts on their affiliates and the consequences the unions will take – or have already taken. We will shed light on the results and the expectations of collective bargaining and agreements in the different member states and sectors. And we will search for the effective and efficient ways to protect workers – in one of the most difficult periods for Europe in the postwar world. Stay tuned for the invitation that will follow shortly.