EU leaders must take action to limit cold, hunger and homelessness in Europe this winter – EURACTIV.com
EU households will struggle with energy, food and housing costs this winter. If inflation and especially energy prices continue at their current course, many people will fall into poverty and destitution, unable to cover essentials. Actions taken now could make a huge difference, writes Ruth Owen.
Ruth Owen is Deputy Director of FEANTSA, the European Federation of National Organizations Working with the Homeless.
Europe is facing a cost of living crisis, driven in large measure by the war in Ukraine and supply chain issues resulting from the COVID-19 pandemic and its aftershocks. Inflation in the euro zone hit a record high of 8.9% in July.
To combat inflation fueled by soaring energy prices, the European Central Bank and other central banks raised interest rates significantly for the first time in more than a decade.
There are growing fears that the winter months could bring a major recession, especially if Russia cuts gas supplies to European countries. In this context, EU governments agreed last month on a voluntary reduction in natural gas demand by 15% this winter.
Since then, they have increasingly voiced their support for EU-level intervention in the energy market and will meet to discuss this at an Emergency Energy Council on September 9.
Current inflation focuses on energy and food, essential for life, health and dignity. Housing is another essential good and one of the largest costs facing most households.
However, the harmonized index of consumer prices does not take housing costs well into account due to technical and conceptual difficulties. The ECB recognizes this as a shortcoming and has made proposals on how to better account for the costs of owner-occupied housing in the future.
In the meantime, there is no doubt that housing costs have also increased, contributing significantly to the pressure on households. The house price index in the EU increased by 26% between 2010 and 2020, and the rent index by 14%.
The situation looks set to get worse; rising interest rates increase the cost of mortgages for homeowners, while landlords pass on the rising costs to renters. This, combined with increasingly unaffordable food and energy, will leave growing numbers of households unable to meet their basic needs.
Low-income households will be hardest hit by rising costs and a likely recession. They already spend much of their income on basic necessities like food, heat and shelter.
They are not able to reduce without harming their well-being because they already consume the minimum, or even less. They also have less choice and control over what and how they consume.
Even before the current crisis, too many people in the EU were struggling to make ends meet. In 2020 8% of the EU population were unable to heat their homes sufficiently. Additionally, 6.5% lived in households with arrears on utility bills.
More than one in five people at risk of poverty cannot afford a meal with meat, fish or a vegetarian equivalent every other day. 31.8% of poor households living in the EU27 were overburdened by housing costs in 2020.
The worsening cost of living crisis threatens a growing wave of fuel poverty, hunger, evictions and homelessness. Middle-class households also risk being pushed into poverty by the coming crisis.
We need urgent action to stop the cold, hunger and homelessness this winter. Inaction will cause great suffering, leave scars for years to come and threaten social stability. European societies can ill afford a dramatic increase in abject poverty. Governments and the European Commission are beginning to act, but more ambition and urgency are needed.
Member States should:
- Introduce temporary moratoriums on evictions and repossessions of primary residences, as many countries have successfully done during COVID-19 lockdowns.
- Before the onset of winter, put in place emergency income support and other measures (tax breaks, price caps, social tariffs, rent controls) to enable households to cope. It is important to ensure that low-income and vulnerable households who are most at risk receive the support they need first. Taxing windfall profits in the energy sector could help fund support schemes. Public authorities need to plan now how to fill gaps in the coverage and use of support measures.
- Protect households, social and health services as vulnerable energy consumers and prioritize their needs. Ensure the provision of adequate services to advise and support those affected or at risk by cold, hunger and homelessness this winter.
The European Commission should:
- Publish a detailed proposal for emergency intervention and structural reform of the EU energy market to reduce prices. There is now a clear appetite from Member States for this.
- Propose emergency legislation for an EU-wide ban on the disconnection of water, energy and digital services at primary residences due to inability to pay. Protecting access to these essential services will allow households to continue meeting their basic needs this winter and reduce the adverse effects of an economic downturn.
- Propose a new SURE-type instrument (Support for Unemployment Risk Mitigation in an Emergency Instrument) to help Member States finance short-term support to households facing arrears of charges, rent or payments mortgages for their primary residence.
The coming winter will be harsh. European governments and institutions cannot stand idly by and let hunger, cold and homelessness gain ground. The right action now will prevent massive damage.