Estonians face the biggest price hike in the eurozone

How can the accelerating inflation in Europe be curbed? European Central Bank governors meet on Thursday, June 9, and could decide to raise interest rates. The aim is to limit price increases by 8% on average in the eurozone. In France, we’re at just over 5%, far from the Baltics, particularly Estonia, where inflation exceeds 20%! A record in the European Union. There, to realize inflation, it is enough to go to a supermarket exit, as in the Nome district, which is a fairly popular district of the capital, Tallinn.

True or False >> Is France the country in Europe where inflation is lowest?

In a typical Estonian cart, there are cold cuts, sausages, milk, chicken and then fish, especially salmon, caught in the Baltic Sea. All of these products took an average of more than 15% for a year. Not many Estonians can keep up, like Oksana and Artur. She does not work, and is paid a pittance as a construction worker. The young couple leaves the supermarket with barely a full shopping bag. “We bought butter, black bread, an Estonian specialty, and a croissant; it cost us 15 euros!”Oksana complains. “These are daily products, Arthur confirms. Milk is growing exponentially, ice cream too … Take the potatoes, I bought some on Monday. The next day, in the same place, they were already 20 cents more. Prices are rising very quickly.”

“Besides, my salary doesn’t increase. My boss tells me it’s impossible, he doesn’t have the means.”

Artur, Estonian

in franceinfo

Oksana and Artur reduce their shopping to a strict minimum, and they arrive at this inexpensive hypermarket to try and save some money. It’s still pricey for Jelena, a mom in her forties: “Meat is expensive. Then fish, especially salmon. It increases by one euro, here and there. Same for fruit. At the end of the month I don’t have money anymore, so I have to be very careful.”

Artur, a young construction worker, walks out of this hypermarket, his suitcase half empty.  (Thomas Giroud/Radio France)

To increase the shopping budget, we should add gasoline as well. And in Estonia, unlike France, there is no discount at the pump. As a result, diesel and unleaded took 55% for the first, and 40% for the second, in one year. Most stations in the capital are offering at least €2 per liter of unleaded 95 in early June. As a result, public transportation is seeing unprecedented crowds, even exceeding pre-Covid attendance. “Now I take the tram more, and the bus, to go to work”That’s how Sylvia describes it.

As in France, this inflation in this European country is explained mainly by energy. But the difference here is that for half of Estonians, their contracts are not at a fixed price. They differ according to the prices of these energies in the stock exchange. And so, when it explodes in the markets, as it does now, it’s exciting. To realize this, the direction of Kiisa. The village south of Tallinn. Its wooden houses on the edge of a forest, rustic place. But in the past few months, it’s been a money pit for Daisi. This is a mother of two very angry with the National Electric Power Company: “They do not lower prices when the company makes huge profits, and their managers see our difficulties! In April and May, I had to pay almost 200 euros a month for electricity and heating. So in 2021, in the same period the bill reaches a maximum of 60 euros a month! This is madness! ”

“And again, my house is well insulated. I worry about autumn, and the coming winter. Here, the temperature can drop to -25 ° C or -30 ° C. Pay them. What am I going to do?”

Daisy, Estonian

in franceinfo

To save money, Daisy will probably sell his car and go to work by train. She works in the neighboring town, in an Internet operator store. Then his sons, who are two boys, are independent: Daisy explains: “My children use their bikes or their legs. I am also, fortunately, in good health. But this is unfair! Today, I earn 900 euros a month. And it is possible to live on such a salary.” The average salary in Estonia is much higher, 1600€ per month.

In the village of Kisa, thirty kilometers from Tallinn, Daisy has seen his electricity and heating bill triple since 2021. (Thomas Giroud/Radio France)

In Estonia, there is a form of a customs shield that has been introduced on electricity and gas prices. But unlike France, it stopped at the end of March.
For more than two months, Estonians have borne the brunt of the explosion in market prices. This explains such inflation. Only one device is still in place today. Power checks, reserved for the most modest, paid first this year. You can get back up to 500€ per month depending on your income and the amount of your bills. To do this, you must file a file with your city. In Tallinn, social services, which are supervised by Betina Beskina, are overwhelmed with requests: Since the beginning of January, we have received 37 000 Energy Vouchers Request. That’s huge for a city like Tallinn, which has a population of just under 450 000 people ! We were expecting a tsunami, we saw it coming, and it’s here. We had to hire 30 People just analyze requests and respond to them. We opened a support number that received thousands of calls.

In Estonia, the price of gas has tripled, and electricity has more than doubled. Alexandra, saw her bill increase “only” by 30-40% compared to 2021. Freelance translator, her monthly income is very variable, and she is raising her three-year-old daughter alone. “I already had debts, and I paid my bills in instalments.”as described.

“There I received 200 euros for the months of October, November and last December. This helps me a lot. Otherwise, I would have had to borrow money from friends, and not buy toys for my daughter.”

Alexandra, Estonian

in franceinfo

Can this double-digit inflation last longer? Yes, for SEB economist Michael Nestor, according to him, it will exceed at least 10% until the end of 2022. Because of the war in Ukraine, and sanctions against Russia. The three Baltic states, Estonia, Latvia and Lithuania, have completely cut off the Russian gas tap for more than two months. They receive it today, mainly from neighboring Norway. We are a small country [1,2 million d’habitants]We need to accommodate 4 to 5 LNG carriers filled with gas only until the end of the year.”Michael Nestor believes.

For Michael Nestor, chief economist at SEB Bank, inflation should remain in the double digits at least until the end of the year, June 2022 (THOMAS GIRAUDEAU / RADIO FRANCE)

To lower the bill, there is only a short term solution for him: “Prepare the customs shield that was in place last winter.” However, Kaja Klaas, the country’s highly liberal prime minister, opposes it. She said the Estonian state would not have the means.

But the political situation may force her to change her mind. Due to deep disagreements with an allied party in Parliament, Kaja Kallas is currently trying to form a new coalition, including with movements struggling to provide massive aid to all Estonians. In addition to, There are elections next March.Michael Nestor says, “It is certainly a good time for politicians to show their interest in Estonians”.

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