Protests in Europe | How wars drive up prices

Appropriation without payment: Looted shop in Paris Photo: IMAGO/Jumeau Alexis/ABACA In many European countries, people are taking to the streets and demanding the "affordability" of life - from food to housing to gas and diesel. This demand is accompanied by a remarkable reinterpretation of the situation: previously, the central problem was poverty, i.e. the lack of money in private households. Today, however, it is said that prices are too high and life is too expensive. This means that the buck lies with the providers of the goods: the companies and the state.

In fact, prices are climbing faster and faster. In the euro area, the inflation rate was 3.8 percent in September after 3.2 percent in August. In Germany, life was on average 3.3 percent more expensive than a year before, in France it was 3.4 percent, in Italy 4.2 percent and in Spain even 5 percent. And nowhere are wages keeping pace with this increase.

The central price driver is energy, which costs almost 20 percent more in Europe than in September 2025. Fuels and lubricants rose in price by 31 percent. In addition, gas prices have exploded since the start of the Iran war at the end of February 2026. In mid-October, the megawatt hour cost almost three times as much as a year before. This in turn increases the price of electricity, which depends on the price of gas. Electricity in Germany is more expensive than it has been in four years.

This continues the chain: higher energy prices lead to higher costs for transport, packaging, clothing, fertilizer and therefore food. The wave of prices hasn't really hit the supermarkets yet. Central banks, in turn, respond to higher inflation by raising interest rates, which makes loans more expensive.

The current wars are driving price increases. The Iran war has pushed oil prices to a five-month high and diesel prices to record levels. There is also no improvement in sight for gas, as 75 percent less liquid gas is being delivered through the Strait of Hormuz than before the war. The dependence on liquefied natural gas is in turn a consequence of Russia's supply stop, through whose pipelines almost no gas comes to Europe.

Governments are responding to the population's demands for relief by pointing to the strained budget situation. The national debt in countries like France, Italy and Belgium is already above the level permitted by the EU. And even in countries like Germany, where this is not the case, reference is made to state austerity measures.

These austerity constraints are exacerbated by the fact that two budget items are likely to consume ever larger sums: firstly, expenditure on debt service, which continues to grow as interest rates rise. On the other hand, there is the expense of upgrading. The EU wants to mobilize up to 800 billion euros to expand its military-industrial capacities. In Germany alone, the defense budget will rise to 140 billion euros in 2027 - "this is by far the largest item in the federal budget that politicians can actually freely decide on," according to the Kiel Institute for the World Economy.

The wars drive up the cost of living, justify growing armaments and cause interest rates to rise, which in turn serves as an argument for governments to reject demands for affordability - and to prepare the population for further sacrifices.

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