Ireland second most expensive country in EU

In news that may not surprise many people, new research from Eurostat, the EU's statistical agency shows that prices here are now 40% above the EU average.

Only Denmark has higher prices.

The gap is also widening. Back in 2016, prices here were 29% above average but the gap has gotten bigger every year since. 

Prices in Ireland are now well above traditionally expensive countries such as Sweden, Finland and Luxembourg.  

Romania has the lowest prices in the EU at 44% below average, followed closely by Bulgaria.  

Country	Price Level
Switzerland	+67%
Norway	+46%
Denmark	+40%
Ireland	+40%
Luxembourg	+32%
Sweden	+28%
Finland	+26%
France	+13%
Germany	+8%
Spain	-3%
Portugal	-11%
Greece	-13%
Czech Rep	-20%
Poland	-40%
Romania	-44%

Deep dive

Taking a deep dive into the figures, Ireland has the most expensive alcohol and tobacco in the entire EU with prices over double the EU average. However these figures were compiled before Minimum Unit Pricing (MUP) on alcohol was introduced, which has raised prices here further. 

Ireland also performs poorly when it comes to restaurants and hotels, where prices are the fourth most expensive in the EU, at 30% above average. Again these figures were compiled before scores of hotels were blockbooked by the Government to house asylum seekers and Ukrainians fleeing the war, which some say has led to prices in the hotel sector skyrocketing this summer. 

Ireland also has the third most expensive food and non-alcoholic beverages in the EU, with prices here 19% above the EU average. 

Meanwhile our health costs are the most expensive in the EU, at a staggering 72% above average. While housing costs such as rents, mortgage rates, gas and electricity, are again the most expensive at a staggering 89% above the EU average. 

Communications costs are the third most expensive in the EU at 47% above average. 

Ireland performs better on clothing and footwear, where prices here are actually 1% below the EU average. Prices for household goods and furnishings are also competitive with prices here just 3% above average.  

Danger to competitiveness

No one is under the illusion that Ireland is a cheap place to live. However the scale of the difference in prices between Ireland and our neighbours is pretty shocking.

And it’s getting worse, which doesn’t bode well for our competitiveness. 

Of course wages in Ireland are also above the EU average. However not by over 40% for most people. 

Many other countries in Europe also benefit from far cheaper childcare, which isn't covered by these figures. 

Why is Ireland so expensive?

There are several reasons why prices here are so high.

These include:

• Our higher wages 
• A lack of competition in certain sectors 
• High taxation on certain goods such as tobacco and alcohol
• Low government subsidies in certain areas such as public transport and childcare
• Our small, dispersed population  
• High insurance costs for businesses, which then get passed on to consumers

We delve into all these reasons in more detail in this article here.

What can be done?

Ireland will never be as cheap as Romania, Poland or Bulgaria etc. Nor should we want to be. But prices here are beginning to spiral out of control compared to our neighbours.  

At a minimum, the Government should look at measures that are within its control to lower the impact of high prices and the cost of living in Ireland. 

At 23%, our rate of VAT is among the highest in the world. While charges for GPs visits and hospital stays undoubtedly contribute to us having the highest health costs in the EU. 

Meanwhile we have astronomical childcare costs. While Government stamp duty leads to higher car insurance and home insurance.

Meanwhile, repeated failures to tackle our comp culture means some businesses continue to pay astronomical insurance costs, which leads to higher prices.  

Here's an article on the ways Government taxes and charges currently add to our cost of living.

Consumer bodies such as the CCPC, and regulators such as the CRU for energy and ComReg for telecommunications also need to do better jobs and stand up for consumers more. If they need more powers to enforce laws and bring prices down, they should demand them. 

Finally, the Government should look into creating a new ministerial position for consumer affairs. We rightly have a huge focus on business and enterprise in almost all areas of government in this country. But that same focus isn’t extended to consumers. 

Let's hear from you!

What do you think should be done to tackle the cost of living in Ireland?

Let us know in the comments below.

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