Opinion of the European Economic and Social Committee – Price hikes in transport, energy and housing: the role of quality public services in tackling the high cost of living (own-initiative opinion)
Date: 2025-04-30
Institutions: European Economic and Social Committee
Subjects: European social policy, cost of living, energy policy, energy poverty, housing policy, living conditions, means of public conveyance, price increase, provision of services, services of general interest








C_202503192EN.000101.fmx.xml












Official Journal of the European Union


EN
C series













C/2025/3192


2.7.2025






Opinion of the European Economic and Social Committee
Price hikes in transport, energy and housing: the role of quality public services in tackling the high cost of living
(own-initiative opinion)
(C/2025/3192)


Rapporteur: 
Thomas KATTNIG






Plenary Assembly decision


5.12.2024




Legal basis


Rule 52(2) of the Rules of Procedure




Section responsible


Section for Transport, Energy, Infrastructure and the Information Society




Adopted in section


7.4.2025




Adopted at plenary


30.4.2025




Plenary session No


596




Outcome of vote
(for/against/abstentions)


154/13/26






Preamble



This opinion is part of a wider package of EESC opinions on the cost-of-living crisis. With this package, the EESC is examining the different facets of this policy challenge and presenting a comprehensive and wide-ranging set of recommendations to European and national policy-makers, civil society organisations and other stakeholders. The package includes seven ‘sectoral opinions’
            
             (1)
, each dedicated to issues in a specific relevant policy area. In addition, an ‘umbrella opinion’
            
             (2)
presents the overarching policy recommendations to address the cost-of-living crisis as a whole and build resilience against future crises.

1.   Conclusions and recommendations









1.1.


The rise in energy prices and associated high inflation has led to considerable cost increases since 2021 in many sectors of the economy. As a result, the cost of living for citizens and companies has risen dramatically, which has had a corresponding impact on competitiveness as well as social costs.












1.2.


Services of general interest (SGIs) can ensure that all individuals and stakeholders have access to the essential services forming the basis for a decent life now and in the future. In addition, they can mitigate the impact of inflation and crises due to their non-profit-driven spirit. The EESC believes that Member States need flexibility and autonomy and freedom of choice to organise public services according to their own choices, needs and traditions, while ensuring high standards such as quality, safety, affordability and universal access.












1.3.


In the light of the recent dramatic geopolitical upheavals the EESC welcomes the Commission’s efforts to make the EU’s budgetary framework more flexible. At the same time, a broader approach to security and defence measures as well as SGIs is needed in order to prioritise growth-oriented public investment and to avoid a trade-off between defence and social spending, especially for countries with limited fiscal space. The reduction of fossil fuel subsidies can provide short-term support for vulnerable households and more durable solutions for decarbonised electricity and heating systems, renovations and access to affordable SGIs. The special rules for SGIs and SGEIs regarding state aid and public procurement must be thoroughly revised.












1.4.


Public transport plays a crucial role in safeguarding high-quality, universal and affordable mobility. Social and ecological investments in multimodal and interconnected public transport are therefore needed. In addition, too many citizens are suffering from energy poverty as well as transport poverty. A clear definition, binding targets and exchange of best practices is needed to combat transport poverty. The Social Climate Fund and social climate plans are also important tools to fight energy and transport poverty.












1.5.


The EESC supports the accelerated expansion of grids and renewable energy through faster and simplified permit-granting processes, efforts to encourage major consumers to generate their own renewable energy and the development of trans-European networks as critical infrastructure. The electricity market reform introduced last year can only be the first step towards separating electricity and gas prices.












1.6.


Over the last two decades, rents and housing prices have risen significantly more than the average disposable income across the EU, constituting a market failure. The EESC believes that public investment in accessible and affordable housing should be a priority for the new multiannual financial framework (MFF). Simplifying rules as well as research and innovation can accelerate construction and refurbishment and reduce their costs. Special attention should be paid to social housing and affordable housing for young people, as they are heavily affected by high housing costs.




2.   Background









2.1.


Inflation in the EU Member States started to increase sharply in the second half of 2021. The harmonised index of consumer prices (HICP) peaked at 11,5 % in the EU in October 2022. In 2023 the EU HICP fell from 10 % to 3,4 %, stabilising at around 2,5 % in 2024 (3). However, inflation remains above the target of 2 %, although inflation varies across Member States.












2.2.


The huge rise in inflation originated from the increased demand after the COVID-19 pandemic and the increase in energy prices starting in the second half of 2021, triggered by Russia’s preparations for its war of aggression against Ukraine. The rise in energy prices led to significant cost increases in many economic sectors, with a corresponding impact on competitiveness. Moreover, costs increased dramatically for households and businesses. Purchasing power was reduced because the burden was passed on to consumers. Since the second half of 2023, housing costs have also been a significant factor in inflation (4). Various geopolitical and social challenges combined with strict budgetary rules as well as unevenly redistributed windfall profits (mainly in the energy and banking industries), insufficient social protection and national tax unfair policies have contributed to deepening social inequalities in some Member States (5).












2.3.


Inflation leads to a loss of purchasing power when wages do not increase to the same extent. This disproportionally affects vulnerable people. Overall, between 8 % and 16 % (35 million-72 million) of people in the EU are facing energy poverty (6). Women with low incomes, single parents, people with disabilities, young people and pensioners living alone are particularly affected. At the same time, child poverty increased significantly to 24,8 % in 2023 (7).












2.4.


The new EU rules on emissions trading extend the emissions trading system (ETS) to the building and road transport sectors. In the future, the prices for emission certificates will rise. The EESC points out that these price increases must be cushioned by higher allocations to the Social Climate Fund and by additional measures in the Member States for vulnerable households and companies through the social climate plans, which should be submitted quickly, monitored and evaluated closely.












2.5.


High inflation, driven primarily by rising prices for fossil fuel imports (EUR 604 billion in 2022) (8), is leading to capital being diverted to foreign companies and to the profits of large corporations. The situation is different for inflation-related wage increases, as the additional income predominantly remains in the same country (9).












2.6.


Given this economic situation and geopolitical developments, the issue of competitiveness is becoming a key challenge for Europe. Through the Letta and Draghi reports, the Commission is aiming to make the EU economy more competitive. The EESC believes that measures to increase competitiveness must also help promote prosperity, well-being for all and social resilience.












2.7.


In his report on the future of EU competitiveness, Draghi stresses how important SGIs are for innovation, sustainable growth, EU economic security and social preparedness in several areas, such as energy supply, infrastructure, education and training. Employees’ skills and knowledge are a particularly important factor in ensuring lasting competitiveness. The Letta report calls for an action plan for high-quality SGIs, which require stable tax revenues if they are to be maintained and developed.












2.8.


The provision of public services takes various organisational and legal forms throughout Europe. The spectrum ranges from forms of organisation under private law to the commissioning of third parties through administrative cooperation. They can be organised in settings as SGIs, either in competitive markets as services of economic general interest (SGEIs) or as non-economic services of general interest that are excluded from these markets.












2.9.


SGIs contribute significantly to value creation and employment and strengthen the EU’s resilience, especially in times of crisis such as the COVID-19 pandemic and the energy crisis. In 2021, SGIs generated 28,4 % of total value added in the EU (10). Boosting investment in key areas such as energy and health also increases the quality of SGIs. As they focus on the general interest, they can curb inflation.












2.10.


Access to SGEIs is a fundamental right and is included in the European Pillar of Social Rights. While Principle 20 of the Pillar explicitly refers to ‘essential’ SGIs, other Pillar principles cover important SGIs such as education, housing and assistance for homeless people, long-term care, inclusion of people with disabilities and healthcare. SGIs are part of the shared EU values within the meaning of Article 14 TFEU, as laid down in Protocol (No 26) on services of general interest annexed to the TEU and to the TFEU and in Article 36 of the EU Charter of Fundamental Rights.












2.11.


SGIs play an important role in implementing the green and the digital transitions and in ensuring a socially fair transition which leaves nobody behind and social and economic cohesion. However, this will only succeed if people see that this transformation creates benefits for people, nature and the economy and is not coming at the expense of workers and their workplaces, social security and SGI quality.




3.   General comments









3.1.


SGIs can ensure that all citizens and businesses have access to the essential services forming the basis for a decent life now and in the future. The European social model with high-quality and affordable SGIs is essential to European social resilience, security and defence and the basis for climate action, a resilient and competitive economy and social cohesion in the EU. In addition, SGIs can mitigate the impact of inflation and crises as they are geared towards the general public interest. Member States need flexibility and autonomy to organise public services according to their own needs and traditions while ensuring high standards such as quality, safety, affordability and universal access.












3.2.


Employees in public SGIs and SGEIs have a key role to play in fulfilling these tasks. Investment in SGIs and SGEIs is urgently needed to improve their quality and affordability, ensure universal access for the public and boost the economy. Well-developed SGIs and SGEIs see people and the economy through crises better and safeguard many jobs. Financial and human resources should be secured, working conditions made more attractive, fair remuneration ensured and training drives promoted. The participation of civil society and the social partners, in particular social dialogue, should be expanded.












3.3.


Taking a profit-driven approach to SGEIs without sufficient regulations and monitoring often increases vulnerability to crises and reduces management options. There should therefore be a stronger focus on the common good and public benefit. Adequate funding and investment of SGIs are key. In the face of growing threats, the EU must pursue security, peace, the rule of law, human rights and social progress through a comprehensive security policy. As a first step, the EESC supports the Commission’s efforts to make the EU’s budgetary framework more flexible in this context. The EESC advocates applying this rule in a broader approach to security and defence measures as well as SGIs in order to prioritise growth-oriented public investment and to avoid a trade-off between defence and social spending. Given the economic downturn in the euro area as well as in the Union as a whole, flexibility is necessary to safeguard productivity and the social and environmental foundations for the well-being of future generations, while at the same time ensuring fiscal sustainability.












3.4.


Fossil fuel subsidies (FFSs) continue to reduce the fiscal space of Member States to finance other priorities, such as high quality SGIs and long-lasting sustainable measures to alleviate the cost-of-living crisis and to increase business competitiveness. A reduction of FFS based on cost-benefit analysis can provide short-time support for vulnerable households and more durable solutions for decarbonised electricity and heating, along with housing stock renovation, reducing transport poverty and providing high quality SGIs to reduce prices.












3.5.


The competition law, in particular State aid and public procurement law, limit how SGIs and SGEIs can be organised and financed. The special rules within the SGEI package (11) must be thoroughly revised. It must be clearly established which SGIs are excluded from State aid law. For certain SGEIs, such as housing, healthcare and social services, the EESC also suggests providing more State aid and longer terms for the compensation of service provision. To promote regional and European added value, direct awards should be safeguarded and expanded by increasing thresholds. Purely price-based approaches should be abolished, encouraging the best and most efficient way of providing services as well as reducing subcontracting chains or imposing general-contractor liability, thereby harmonising important elements at EU level. Furthermore, the duration of contracts for social services which are limited to three years should be extended to ensure planning stability both for providers and customers.












3.6.


The local level is based on good SGIs, so it is essential to safeguard these in a lasting way at EU level too. Climate change mitigation and action can realistically only be implemented if social security is ensured. Only in a socially and economically secure environment will large portions of the population accept and support climate action.












3.7.


The EESC welcomes Commission President Ursula von der Leyen’s announcement of an action plan to implement the European Pillar of Social Rights and expects it to help strengthen SGIs.












3.8.


The EESC believes that good data are essential for SGIs to meet the four key criteria – availability, accessibility, affordability and adequacy. Data availability is essential, for example, in the housing sector as well as in exchanges between SGIs, public authorities and scientists.




4.   Specific comments


Transport









4.1.


Public transport plays a crucial role in safeguarding high-quality, universal and affordable mobility. Older, younger and less well-off people in particular depend on it. In addition, rising fuel prices due to the energy crisis have led to a sharp increase in costs for the economy and commuters. As a result, more and more people are suffering from transport poverty (12). A clear definition, binding targets and exchange of best practices is needed to battle transport poverty.












4.2.


Both urban and regional public transport as well as long-distance cross-border transport need to be developed to give commuters and travellers alternatives to driving and flying. Social-ecological investments in multimodal and interconnected public transport must therefore be exempted from EU fiscal rules. Moreover, from 2026 a successor to the Recovery and Resilience Facility will be needed to provide additional EU funding, including an effective governance procedure for expanding, connecting and modernising the rail network in particular. Additional funding and the expansion of public transport and multimodal rail transport capacity could mitigate job losses in other sectors due to the associated restructuring of the economy.












4.3.


Making the transport of goods by rail more attractive requires a combination of infrastructure measures, interoperability, regulatory adjustments, financial incentives and technological innovation. Rail needs to become more reliable, cheaper and more flexible. At the same time, companies should be encouraged to transport more goods via rail.












4.4.


The EU’s liberalisation of transport services has not had the desired effect in many Member States. There is no connection between the quality of public transport and whether the service was put out for tender. Member States’ freedom to choose between a direct award and a call for tender must therefore be protected. It is important that high quality transport services be widely available as SGIs, both in local and regional transport and in long-distance transport.





Energy









4.5.


The Draghi report stresses that high energy prices in the EU constitute a major competitive disadvantage. The EESC supports the accelerated expansion of grids and renewable energy through faster and simplified permit-granting processes, efforts to encourage consumers to generate their own power, creation and promotion of energy communities and the development of trans-European networks as critical infrastructure (13).












4.6.


Throughout the energy crisis, the coupling of electricity and gas prices led to higher electricity prices, including in power plants that did not have to bear any cost increases at all. The temporary levy on profits introduced by the EU therefore proved important. Energy companies should focus more on the common good and ensure that low generation costs are reflected in consumers’ bills. The electricity market reform introduced last year can only be the first step towards separating electricity and gas prices.












4.7.


The EESC points out that the electricity market should not only be reformed with a view to meeting the goal of climate neutrality by 2050 at the latest but rather that this goal must be linked to the objectives of security of supply and stable and affordable prices (14). Energy efficiency continues to play a key role and is particularly important for vulnerable households.












4.8.


Between 35 and 72 million people in the EU are facing energy poverty. The Member States must implement existing obligations and tackle energy poverty within the social climate plans. These plans should be submitted quickly, evaluated and monitored closely, and the Social Climate Fund should be better funded. In this regard, the EESC draws attention to its opinion (15).












4.9.


The EESC welcomes the European Commission’s initiative for a European Affordable Housing Plan. While housing policy remains under Member State’s jurisdiction, the EESC points out that there is an urgent need for a coordinated EU response to address the shortage of affordable and sustainable housing.





Housing









4.10.


Over the last two decades, rents and housing prices have risen significantly more than the average disposable income across the EU, constituting a market failure. The concerted European austerity policies following the 2008 financial and economic crisis severely limited the ability of national, regional and local governments to provide affordable, decent housing. This led to a decline in the stock of housing in Europe (16). Gentrification and the grey economy, e.g. undeclared renting, as well as golden visas, short-term rentals and massive buy-outs by large investment funds have further exacerbated the situation in some countries and cities. In this regard, the EESC draws attention to other requests made in its opinion (17).












4.11.


The EESC calls on the Commission to support Member States by issuing recommendations to them where appropriate, to set up a toolbox to curb out-of-control rent increases, including statutory rent regulation, a levy on vacancy for residential properties in view of renting them, spatial planning tools like taxing of rezoning gains and special zoning for social housing, fiscal incentives for renovating residential homes, more social housing and limits to short-term rental permits. In this regard, the EESC encourages the Commission to present the European Affordable Housing Plan (AHP) as early as possible, with a special focus on improving access to affordable housing for young and elderly people and people with disabilities. Measures required in the short-term such as the establishment of a pan-European investment platform for affordable and sustainable housing or changes in subsidy law regarding broader access to social housing should take place before the AHP is published.












4.12.


The EESC advocates greater scope for long-term investment in social housing and believes that public investment in accessible and affordable housing should be a priority for the new MFF and should not be subject to the debt rules set out in the fiscal rules under the SGP. Public-private partnerships can also contribute to financing affordable housing as long as it is ensured that profits and losses are fairly distributed between the investors. Blended finance involving private investors is only an option if it can be ensured that allocations are transparent and that there are no unjustified additional costs for the public authorities compared to public financing. When using such blending models, it is even more important to clearly define rights and obligations, clarify liability issues and provide for an efficient and rapid conflict resolution system, in order to avoid additional long-term costs and adverse liability issues.












4.13.


Financing affordable and sustainable housing requires considerable funds. It is essential to simplify financial instruments and make them more coherent. In this respect, the funds from cohesion policy should be targeted effectively so that the problem of affordable housing is tackled. The EESC proposes the systematic and more intensive implementation of the European Regional Development Fund and Cohesion Fund for housing needs.












4.14.


A realistic EU goal for social housing needs to be set for constructing new homes, renovation or vacant housing in 2024-2029. To this end, Member States must, among other things, make a sufficient proportion of land available for non-profit housing. Simplifying rules as well as research and innovation can accelerate construction and refurbishment and reduce costs. Legal certainty is key for investors.












4.15.


The EESC calls for:






—


the mobilisation of both private and public investment,










—


improved access to mortgage loans for households and young people while including safeguards to prevent an increase in private bankruptcies,










—


a streamlined regulatory and administrative working environment for construction companies, with clear rules which can accelerate construction processes, lower building costs, improve working conditions, increase sustainability, adequate wages and create overall affordability,










—


greater support to research and innovation, as well as digitalisation, through EU fonds to increase the productivity of the construction industry,










—


all relevant actors to further work on raising the attractivity of the sector to tackle the shortage of skilled labour by improving working conditions, wages, etc.
















4.16.


The EESC calls on the Commission to recognise social housing as an essential and promising tool of active housing policies. The fundamental right to affordable, accessible and decent housing for everyone should be enshrined in EU primary law. In addition, housing indicators should be included in the national reform programmes and stability/convergence programmes.












4.17.


In order to maintain the freedom of choice, affordable housing should also be available near people’s workplaces. Being able to commute by public transport is best for the environment and the economy. Spatial planning is key to taking social needs into account, reducing the need to travel and improving quality of life.












4.18.


The EESC calls on all Member States, with the support of the Commission, to apply the Housing First for Youth (HF4Y) principle and to devise specific programmes like expanding the availability of affordable student housing in university cities to make more affordable housing available for young people overall.






Brussels, 30 April 2025.


The President


of the European Economic and Social Committee

Oliver RÖPKE
               





(1)  CCMI/239 ‘
            
Reindustrialisation of Europe – opportunity for businesses, employees and citizens in the context of the cost-of-living crisis

            ’ (ongoing), EESC opinion on ‘
            
Leaving the crises behind – Measures for a resilient, cohesive and inclusive European economy

            ’ (OJ C, C/2025/3195, 24.6.2025, ELI: http://data.europa.eu/eli/C/2025/3195/oj), EESC opinion on ‘
            
How single market dysfunctionalities contribute to the rising cost of living

            ’ (OJ C, C/2025/3189, 24.6.2025, ELI: http://data.europa.eu/eli/C/2025/3189/oj), EESC opinion on ‘
            
Phasing out fossil fuel subsidies while ensuring European competitiveness, mitigating the cost-of-living crisis, and promoting a just transition

            ’ (OJ C, C/2025/3191, 24.6.2025, ELI: http://data.europa.eu/eli/C/2025/3191/oj), REX/596 ‘
            
Fragmentation of supply chains and impact on the cost-of-living crisis

            ’ (ongoing), SOC/823 ‘
            
How to address the loss of purchasing power and the risk of rising inequalities, exclusion and marginalisation

            ’ (ongoing), EESC opinion on ‘
            
Price hikes in transport, energy, housing: role of quality public services in tackling high cost of living

            ’.

(2)  ECO/660 ‘
            
Recommendations of organised civil society to address the cost-of-living crisis

            ’ (ongoing).

(3)  Eurostat: HICP - monthly data (annual rate of change).

(4)  Eurostat: HICP - monthly data (annual rate of change).

(5)  Eurostat: Income quintile share ratio S80/S20 for disposable income by sex and age group.

(6)  Joint Research Centre: Who’s energy poor in the EU? It’s more complex than it seems.

(7)  Eurostat: Children at risk of poverty or social exclusion.

(8)  European Commission: Action Plan for Affordable Energy.

(9)  
            Kollektivvertragsverhandlungen in Zeiten hoher Inflation.

(10)  Statistical update on services of general interest (SGIs), Federal Planning Bureau, Belgian government, May 2024.

(11)  European Commission: SGEI package.

(12)  European Commission: Transport poverty: definitions, indicators, determinants, and mitigation strategies.

(13)  Opinion of the European Economic and Social Committee on Cross-border energy infrastructure planning (Exploratory opinion requested by the Belgian Presidency of the Council of the EU) (OJ C, C/2024/2100, 26.3.2024, ELI: http://data.europa.eu/eli/C/2024/2100/oj).

(14)  Opinion of the European Economic and Social Committee – The future of the supply and pricing of electricity in the EU (own-initiative opinion) (OJ C, C/2025/1187, 21.3.2025, ELI: http://data.europa.eu/eli/C/2025/1187/oj).

(15)  Opinion of the European Economic and Social Committee on Tackling energy poverty and the EU's resilience: challenges from an economic and social perspective (exploratory opinion requested by the Czech Presidency) (
OJ C 486, 21.12.2022, p. 88).

(16)  European Commission: Boosting Investment in Social Infrastructure in Europe.

(17)  Opinion of the European Economic and Social Committee – Social housing in the EU – decent, sustainable and affordable (own-initiative opinion) (OJ C, C/2025/771, 11.2.2025, ELI: http://data.europa.eu/eli/C/2025/771/oj).


ELI: http://data.europa.eu/eli/C/2025/3192/oj
ISSN 1977-091X (electronic edition)