A new Eurostat report on European living conditions reveals persistent divides in income distribution, material deprivation, and life satisfaction across the EU, even as overall median incomes have risen.

The 2025 edition of Key Figures on European Living Conditions shows that median disposable income in the EU stood at €21,253 PPS per inhabitant in 2024, with wide disparities between member states. Luxembourg reported the highest median income at €37,781 PPS, while Slovakia, Hungary, and Greece had levels close to €12,000 PPS.

At the same time, income inequality, measured by the Gini coefficient, remained uneven. The EU average was 29.3 percent in 2024, but disparities ranged from below 25 percent in Slovakia, Czechia, and Slovenia—among the most equal societies—to 38.4 percent in Bulgaria and 35.3 percent in Lithuania, highlighting sharper divides in parts of Eastern Europe.

The share of people at risk of poverty or social exclusion remains stubbornly high. In 2024, 21.4 percent of EU residents in cities and 21.3 percent in rural areas were affected, with only a slight improvement compared to previous years. Romania and Bulgaria showed the widest urban-rural gaps, with poverty risk 27 and 19 percentage points higher in rural areas than in cities.

Educational attainment plays a major role. More than a third of adults with low education levels were at risk of poverty, compared to just over 10 percent among university graduates. Unemployment amplified the vulnerability, with two-thirds of unemployed people at risk. According to the OECD, these disparities mirror broader global patterns where rural and low-educated populations remain more vulnerable despite overall income growth.

Severe material and social deprivation fell slightly to 6.4 percent of the EU population in 2024, but children were disproportionately affected, with 7.9 percent deprived compared to 5.1 percent of older people. Rates were highest in Romania at 17.2 percent, Bulgaria at 16.6 percent, and Greece at 14.0 percent, while Slovenia reported the lowest at just 1.8 percent. Child-specific deprivation remains a critical issue. One in three children in Romania and Greece lacked basic items such as daily fruit, proper shoes, or internet access. UNICEF has warned that persistent child deprivation undermines long-term social cohesion and economic productivity.

Despite these pressures, average life satisfaction across the EU was rated 7.2 out of 10 in 2024. Finland, Romania, and Slovenia reported the highest levels at 7.7 or above, while Bulgaria scored the lowest at 6.2. Trust in others, a key measure of social cohesion, averaged 5.8 across the EU. It was notably higher in Romania, Finland, and Poland at 7.0 or more but lowest in France, Greece, and Cyprus, which all scored below 5. The World Bank has previously linked trust levels to economic resilience, noting that countries with higher interpersonal trust tend to recover faster from economic shocks.

The report also highlights ongoing challenges for people with disabilities. Across the EU, 9.7 percent of employed people with disabilities were at risk of poverty, compared to 8 percent of those without. Meanwhile, self-perceived discrimination remains widespread: nearly 15 percent of non-EU citizens living in the EU reported severe material and social deprivation, more than double the EU average.

The findings present a mixed picture. While Europe has seen rising real incomes—Romania’s median income, for instance, has surged by 162 percent since 2010—deep divides persist between and within countries. Analysts say these figures should serve as a warning. Income growth is not enough if large sections of the population, especially children and rural communities, remain excluded. The European Anti-Poverty Network has stressed that the EU must now prioritise inclusive growth policies, combining income support with access to services and education.

Source: EUROSTAT
Image: EUROSTAT

The European Commission has adopted a permanent state-aid framework to underpin its Clean Industrial Deal (CID), replacing the crisis-era regime that carried the EU through the energy shock and early cleantech race. The Clean Industrial Deal State Aid Framework, or CISAF, applies from 25 June 2025 to 31 December 2030 and succeeds the Temporary Crisis and Transition Framework (TCTF). Brussels says the change offers a longer planning horizon and clearer pathways for supporting renewables, industrial decarbonisation and net-zero manufacturing while aligning with existing guidelines such as the CEEAG and the General Block Exemption Regulation.

CISAF’s centre of gravity is faster deployment of clean energy and flexibility. It streamlines approval for aid that rolls out renewables and storage—including hydrogen and other low-carbon fuels—and introduces a “target-model” approach to capacity mechanisms so member states can integrate more variable wind and solar without jeopardising security of supply. Designs that meet the model can obtain quicker clearance, while other formats fall back to assessment under the CEEAG.

On the demand side, the framework allows temporary electricity-cost relief for energy-intensive users exposed to global competition, provided beneficiaries invest in decarbonisation. It also opens multiple routes to support emissions cuts at existing plants—electrification, hydrogen, sustainable fuels and carbon capture—through tenders or direct aid with funding caps for very large projects, or via competitive bidding to set maximum aid levels. To anchor supply chains in Europe, CISAF lets governments back new manufacturing capacity for technologies covered by the Net-Zero Industry Act and the production and processing of critical raw materials. In defined cases, “matching aid” can be granted to counter subsidies offered in third countries, and tax measures can accelerate the amortisation of clean-tech investments.

The Commission has already begun applying the framework. In August it cleared an €11 billion French scheme to support three floating offshore wind farms using contracts for difference—one of the first large approvals aligned with the CID’s objectives and an early test of CISAF’s streamlined approach. More national schemes are expected as member states shift TCTF programmes into the new regime.

CISAF is not a blank cheque. Most measures still require prior notification and must run through aid schemes rather than one-off permissions, a constraint that some industry groups say could slow momentum. The Commission argues that predictability—and convergence on capacity-market designs—should cut approval times and reduce fragmentation across the single market. The framework also coexists with the CEEAG and the GBER, which remains available for certain green-aid categories without notification and is being revised to expand simplified options.

Whether CISAF proves to be an efficient catalyst will depend on speed and scale. If member states mobilise competitive tenders for industrial decarbonisation, use matching aid judiciously to keep strategic factories in Europe, and pair renewable build-out with robust flexibility and capacity mechanisms, the framework could give the CID real bite. Early approvals like France’s offshore wind package suggest the pipeline is forming; the next six to twelve months will show whether national budgets and Brussels’ processes can translate the rulebook into projects on the ground.

Source: CMS