- The problem: The war in Ukraine has significantly affected the global economy and markets for oil, gas, food and other essential commodities, causing energy and food prices to rise substantially.
- Why it matters: The cost-of-living crisis risks increasing poverty and social exclusion in the EU. The strong link between poverty and ill-health suggests this will worsen health inequalities.
- The way forward: Governance interventions should be mindful of the impact on health, equity and wellbeing, and prioritise social investments above austerity measures and budget cuts.
Promoting and protecting health amidst the rising cost-of-living crisis
The war in Ukraine has significantly affected the global economy and markets for oil, gas, food and other essential commodities, causing energy and food prices to rise by 40% and 18.2% respectively. Many businesses have been passing on rising external costs to consumers, and driving up prices to ensure profits are kept.
What is a cost-of-living crisis?
"A situation in which the costs of essential commodities are rising faster than average ‘real’ disposable household income, adjusted for inflation and after taxes and benefits."
The rising cost of living is the most pressing worry for 93% of Europeans, with 46% of the EU population saying that their standard of living deteriorated, and 39% of citizens face bill-paying difficulties.
Health impacts of the cost-of-living crisis
The impact of the high living costs and decreasing income that is available for essential services and goods – such as healthcare - have been widespread, affecting the majority of households across Europe.
15% of people in the EU cannot afford a quality meal every second day. This forces them to skip meals and ration food, as well as swap heathier options for cheaper, more energy-dense and ultra-processed foods.
Preventive and curative health and long-term care
Poorer households are three times more likely to report unmet health needs due to financial reasons, compared to high-income earners. Not seeking care may result in delayed or missed diagnoses and treatments, with costly, potentially life-threatening implications.
Children and youth
The COVID-19 pandemic created disruptions to education and a decline in youth mental health, the cost-of-living crisis is likely to further worsen young people’s long-term prospects, as costs associated with accessing quality early years education and care pile up on low- and medium-income households.
Energy poverty and housing
16.4% of people at risk of poverty in the EU cannot afford to heat their homes and 24% of people with disabilities are energy-poor. Inadequate living conditions increase vulnerability to infections and illness, causing energy-poor households to have worse health outcomes.
Mental health and psychosocial wellbeing at work
The stress associated with financial and job insecurity, social isolation, and living in (in-work) poverty and debt worsen mental health.
How are EU policies, tools and programmes addressing the rising costs of living?
Several EU policies help mitigate the negative economic, social, and health consequences of individuals. These include:
- The European Pillar of Social Rights (EPSR) sets out social principles and targets considered fundamental to health equity.
- The European Child Guarantee aims to prevent and tackle social exclusion for children and adolescents.
- The Fund for European Aid to the Most Deprived supports initiatives that provide basic, necessary commodities and emergency assistance to the most deprived.
Pathways to Progress
It is critical that all-level governance interventions are mindful of health, equity and wellbeing impacts, and prioritise social investments above austerity measures and budgetary cuts. There is no single mitigating intervention.
Our recommendations include to:
- Increase political and public health efforts to raise awareness of the need to tackle the mental and physical health consequences and inequalities associated with the cost-of-living crisis.
- Encourage development and implementation of national and sub-national health equity and wellbeing strategies and systematic use of health equity impact assessments.
- Protect public spendings in health and social inclusion from cuts.
- Speed up implementation of the EU legislative actions on minimum wages and minimum income.