Life in the Netherlands was no less than 11.6 percent more expensive in July compared to a year earlier. A shocking percentage that we have not seen in the past half century.
–
–
11,6 procent of 10,3 procent?
Yes, that’s confusing. According to the Dutch measurement method, we have an inflation rate of 10.3 percent. But there is also a European harmonized measurement method to be able to compare countries. Using this method, the Netherlands arrives at an inflation rate of 11.6 percent.
We will use that number for this article. Not because it is higher, but because that way we can better compare with the countries around us.
–
–
Energy prices are cutting in
The increased energy prices in particular are cutting in, it should be known. Electricity, gas and district heating were – hold on – 108 percent more expensive in July than a year earlier. So more than doubling the price.
And although petrol and diesel have become slightly cheaper in the past month, this has been completely negated by the rise in other energy prices, says CBS chief economist Peter Hein van Mulligen. Meanwhile, the high energy prices also translate into (much) higher food prices.
–
–
Not behind the leading group
That pain is not only felt in the Netherlands. Life is rapidly becoming more expensive across the eurozone, but the differences between countries are nevertheless significant. We don’t really enjoy that.
In 13 of the 19 euro countries inflation is lower than in the Netherlands.
–
–
To put the pain in perspective here, especially in the Baltics, life becomes priceless. In Estonia, prices rose by 22.7 percent, in Latvia by 21 percent and in Estonia by 20.8 percent.
Those countries border on Russia and/or Belarus and were largely dependent on them for both goods and energy. The war in Ukraine and the sanctions that followed have therefore hit hard.
–
–
The three countries have completely renounced Russian gas, but a hefty price is being paid for this. Gas is now more than three times more expensive than a year earlier, the average cost of living has increased by more than 40 percent.
Inflation is also much higher than average in Slovakia and Slovenia (and higher than in the Netherlands) and it is therefore no coincidence that these countries are close to Russia.
–
–
Compensation
In most other euro countries inflation is slightly to a few percent lower than in the Netherlands. Not every country is equally dependent on gas, which makes a big difference. Moreover, governments are tumbling over each other to keep price increases bearable through tax cuts and compensation schemes.
The moment at which such measures are taken can also cause fluctuations in the ‘top lists’.
Finns hardly need gas
But there are some clear positive outliers. Take Finland. There must be a lot of heating, because it can be bitterly cold. In addition, the country borders on Russia. And yet inflation is much lower there than in almost all other euro countries.
–
–
And the reason is actually quite simple: Finland takes care of its own energy supply. “Finland is not so dependent on Russia as an energy source, because it gets a large part of its energy from renewable and nuclear sources,” writes Bert Colijn of ING. Only 6 percent of the energy demand comes from natural gas, the average in the eurozone is 24 percent. That hurts a lot.
–
–
France restricts energy prices
And in France, too, citizens are getting off mercifully so far. Inflation is ‘only’ 6.8 percent. That is of course very high by normal standards, but compared to the rest of Europe it is not that bad.
Much of this has to do with government policy. The French government has decided that gas prices have been frozen at the level of October last year and electricity prices are allowed to rise by only 4 percent. The country is allocating tens of billions to make up for the difference between market prices and sales prices.
–
–
Fail
In the Netherlands, too, the government has taken measures to curb inflation somewhat. Think of lowering the tax on the energy bill and a reduction of the excise tax on fuels. The lowest incomes also received 1,300 euros in extra energy allowance.
But that doesn’t seem to be enough. Nibud warns today that the payment problems that many families already have will worsen if inflation remains this high.
And that will probably be the case, explains Roland Koopman in the video below:
–
–
