Wage indexation

Currently inflation increases rapidly in many countries. Yes, Argentine. The Euro-zone and EEA have mastered the peak of inflation due to shifting away from Russian dependency and cheap prices for energy and dealt with carry-on effects related to high energy inputs. The annual rate of inflation calculated for January 2024 has returned in the Euro-area to 2.8 % close to the European Central Bank target of 2% (compare figure below).  Inflation puts wages under pressure, because household with little savings have a very hard time to cope with sudden price increases. For society as a whole, inflation raises many questions of differential impact of inflation on different parts of society. Savings become devalued, but debt might become easier to be repaid in so-called real terms.
Wage earners suffer in terms of lower purchasing power unless in subsequent wage negotiations pay rises can be achieved. This then depends of negotiation power of groups or sectors of the economy. Trade unions have to enter into tough negotiations and conflicts to even regain the same status quo previously achieved in wage negotiations. A series of conflicts and economic readjustments by more or less powerful sectors or representation comes into play.
All this is happening in a year of a series of national and regional elections as well as the European Parliament election in June. Political turbulance and the rise of extremists might be a result of a lack of taking into account the needs of lower wage groups who are likely to feel the full blast of the high inflation previously still today. Wage indexation as in Belgium, which fixes wages to the rise in inflation previously takes out most of the explosive power of a sudden rise in inflation at the risk of an upward wage-price spiral. The recent inflation figures for Belgium, however, show that this is not the case. An overshooting has been followed by an undershooting of the Euro-zone inflation. The political disturbance and risk of redistribution to more powerful groups in society can be limited through general wage indexation or indexation of for example just minimum wages.
The Russian caused spike in inflation has been successfully mastered in the EU. The political economy of redistribution through inflation will remain an important element unless wage indexation is used in more countries to escape populists’ and extremists’ voices. (Image Eurostat data and ESTATEC app)

Civil Protection

A lot of important activities do not receive the attention they deserve. During a humanitarian crisis, Europe frequently acts with varying involvement of Member States. This holds true in droughts, inundations, earth quakes, civil wars or imperialist state conflicts. The extent and time of commitment are an additional and differentiating element. Coordination of such activities is important for those wanting to help and those asking or receiving assistance. Efforts, equipment and political support vary enormously as well. There is a need to approach this topic more strategically. The Union Civil Protection Knowledge Network (UCPKN) goes a long way to attempt to find a common language, data infrastructure and responses in this respect. It surely is important to go beyond the piecemeal approach of the past to be able to address emergencies in multiple kinds more effectively. It is, however, also in some instances a highly controversial issue as well. For each term in this old (Tschernobyl nuclear disaster) and still novel field (Fukushima) for joint activities, we have to come up with compromises of definitions.
For example, what constitutes an emergency? Does the climate crisis and disasters related to it already constitute an emergency now? Some say yes, we have to act now to avoid bigger floods and wild fires as of next year. Others, do not want to tackle the root causes, but rather focus on curing actual devastating effects of disasters.
We are back to a well-known topic of preventive rather than curative approaches. In the meantime, we are convinced that we have to commit more resources to both approaches: immediate relief and structural change to prevent an otherwise never-ending sequence of disasters in varying places.
Most important probably is the keeping of address books and fast digital networking facilities to react and communicate with the competent institutions and civil organisations. Beyond the involvement and linking of experts in the field, the larger public and volunteers make up for additional invaluable resources to act.
It is crucial to make it possible for decentral links between cities like in city partnerships to be involved. Building on existing human to human links motivates and mobilises huge additional resources. Of course, continuous training is a very important element in all those efforts. We should embrace it in the private and public sector, at school and in retirement even. (Image: Extrait de Peter Paul Rubens La chute des géants MRBAB, Brussels)