Competitive Dynamics In The European Economy Amid Inflation And Wage Pressures

by THEFUTURE.TEAM

February 10, 2026

Amid ongoing debates about the economic impact of inflation and wage growth, the European Commission’s latest report, After the Inflation Shock: A Review of Price and Cost Competitiveness in the EU, offers a comprehensive look at how inflation has affected member states differently. The study notes that several Central and Eastern European countries experienced sharp real price increases, which in turn weakened price competitiveness. These pressures were largely driven by higher import costs, expanding profit margins, and accelerating wages.

Inflation, Productivity, And Economic Resilience

The report highlights that in economies such as Ireland, Cyprus, and Malta, productivity growth has generally kept pace with or exceeded wage increases. This alignment has helped contain domestic labour costs per unit of output. Maintaining this balance is critical, as wage growth that significantly outstrips productivity can trigger a self-reinforcing cycle of rising costs and inflation, ultimately eroding competitiveness.

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Divergent National Trends And Their Implications

Across the EU, wage and productivity dynamics have varied widely between 2020 and 2024. In Lithuania and Croatia, inflation-adjusted wage data show that real wages rose markedly faster than productivity. Bulgaria and Romania present a more nuanced picture: while the Harmonised Consumer Price Index suggested moderate inflation, GDP-deflator adjustments indicate that wage growth was closer to productivity trends. Latvia recorded particularly strong real wage gains well above productivity improvements, whereas Slovakia and the Czech Republic continue to face noticeable mismatches between wage growth and output efficiency, each driven by different structural factors.

Inflation’s Role In Determining Competitiveness

A key takeaway of the report is that inflation alone does not automatically translate into lost competitiveness. Initial economic positioning, sector composition, and productivity trajectories play equally important roles. Although inflation gaps across EU countries have narrowed compared to the immediate post-pandemic period, several economies still face persistent price pressures. These began to accelerate again in 2025, suggesting that short-term disparities in price competitiveness may remain.

Supply-Side And Domestic Influences On Inflation

Inflation patterns within the EU have been shaped by both external shocks and domestic decisions. Central and Eastern European economies were hit hardest by import-driven cost increases, particularly in energy. In contrast, countries such as France, Greece, Italy, and Finland recorded more moderate inflation rates between 2020 and 2024. Domestic drivers also played a meaningful role, including shifts in corporate profit margins and sustained wage growth, underscoring that competitiveness cannot be assessed through inflation metrics alone.

Measured Wage Adjustments Sustain Competitiveness In Cyprus

Cyprus provides an example of a more measured approach. Wage growth has remained relatively contained while labour productivity has continued to improve. According to the Central Bank of Cyprus’ December 2025 Economic Bulletin, nominal wage expenditure rose by 4% during the first nine months of 2025, while real wages increased by 3.3%. This moderation has helped keep unit labour costs below the eurozone average and supported the country’s overall competitive position.

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Women Make Up A Majority Of The EU’s Science And Technology Workforce But The Real Gap Is Elsewhere

by News Editor

June 25, 2026

Women now make up the majority of the EU’s science and technology workforce. According to Eurostat, in 2025, more than 81.6 million people aged 15 to 74 were employed in science and technology occupations across the EU. Of those, 52.5% were women, equal to 42.8 million women. The number of women in these occupations rose by 27.9% compared with 2015, an increase of more than 9.3 million over a decade.

On the surface, the numbers resemble progress. However, Eurostat’s category requires context before that figure can be read accurately. The data refers to HRST, or Human Resources in Science and Technology, specifically people employed in science and technology occupations. These are roles where the main tasks require professional or technical knowledge in physical and life sciences, but also in social sciences and humanities. That definition is wider and broader than engineering, ICT, laboratory science, or high-tech research alone.

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Zooming In

The gender picture changes once the data moves from a wider definition of the workforce to the narrower scientist-and-engineer (research and manufacturing) subgroup.

Scientists and engineers represented almost a quarter of all people employed in science and technology in the EU in 2025. Eurostat describes scientists and engineers as often being the innovators at the centre of technology-led development, making them an important subgroup to focus on separately.

Women accounted for only 40.8% of scientists and engineers in 2025, despite making up more than half of the wider category. That share has increased by a mere 0.5 percentage points over the past decade. The absolute number of women working as scientists and engineers rose from 5.3 million in 2015 to 8.2 million in 2025, despite the push from national and international organisations to increase the number of women in the field. Europe has expanded the number of women in science and technology occupations over ten years. However, that expansion has not extended equally into the scientist-and-engineer subgroup, where much of Europe’s research and innovation work is conducted.

In 2025, of the 39.4 million women aged 25 to 64 working in science and technology occupations in the EU, 35.5 million worked in service activities. Only 2.7 million worked in manufacturing. Women accounted for 57.5% of science and technology employment in services, but only 31.3% in manufacturing.

In 2025, the highest shares of women employed in science and technology occupations were recorded in Latvia at 62.4%, followed by Hungary’s Great Plain and North region at 61.1%, Estonia at 60.5%, Poland’s Central macroregion at 60.4%, and Lithuania at 60.3%. No EU country recorded a majority of women among science and technology workers in manufacturing.

Break-down

Eurostat’s figures measure employment in broad science and technology occupations. They do not show job security, pay levels, management roles, promotion rates, research leadership, or whether women are concentrated in junior or senior workplace positions.

The classification of “senior” also requires additional explanation. Eurostat reports that 45.9% of science and technology workers aged 25 to 64 in the EU were classified as “senior” HRST in 2025. In this dataset, “senior” refers to workers aged 45 to 64. It does not mean senior manager, senior researcher, team lead, or decision-maker.

A high female share in the wider Human Resource Science and Technology (HRST) category does not parallel equal representation across scientists, engineers, manufacturing roles, senior posts, pay, research funding, or decision-making. These figures also reflect the occupational mix inside each country or region, not only structural progress across all areas of science and technology.

The Case Of Cyprus

Eurostat data places Cyprus’s overall science and technology employment at 37.2% of the labour force in 2025, slightly above the EU-27 figure of 36.9%, and above Greece at 26.8%, Malta at 33.9%, and Turkey at 18.2%. This figure covers the total share of the labour force employed in science and technology across all genders.

Progress Or Work-in-Progress?

52.5% in the broad category. 40.8% among scientists and engineers. 31.3% in manufacturing. Europe’s gender gap in science and technology hasn’t closed yet, and there is still work to be done to encourage and support more women to enter the field, especially in research and manufacturing.

Let’s not wait another decade for another couple of percentage points of hope.

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