Between 2020 and 2025, gross hourly wages in the European Union rose from €21.5 to €26.2—a nominal increase of 21.9%. But once inflation is factored in, the picture shifts dramatically. Consumer prices surged 25.6% over the same period, leaving cumulative real wages 3% lower. For households across the continent, this means purchasing power has eroded, even as paychecks grew in absolute terms.
Eurostat data, analysed by Euronews, reveals a stark divergence across 30 European countries. Real wages and salaries fell in 12 nations but rose in 18. The pattern is clear: countries outside the euro area, particularly those with lower starting wage levels, have seen the strongest real gains. Bulgaria leads with a remarkable 37.4% increase in real wages, driven by a 2023 law requiring the minimum wage to be at least 50% of the average gross wage. Serbia (25.4%), Croatia (21.1%), and Lithuania (21.1%) also posted gains above 20%. All three top performers were not part of the euro area in 2020.
Winners and Losers Across Europe
Among non-euro countries, Romania (19.7%), Hungary (18.8%), and Poland (17.8%) recorded real growth between 15% and 20%. Within the euro area, Slovenia (14.4%), Latvia (10.6%), and Greece (8.6%) also saw significant increases. In half of the countries surveyed, real wage changes fell within a narrow band of -5% to 5%, suggesting relatively modest shifts for many.
The EU's four largest economies—Germany, France, Italy, and Spain—all experienced real wage declines. Italy suffered the steepest drop at 9.2%, followed by Spain at 5.9%. Germany (-3.2%) and France (-3.3%) were slightly below the EU average. Italy's decline was the largest across all 30 countries studied. These figures are based on gross wages, so tax changes can affect take-home pay; lower taxes may offset some losses, while higher taxes can exacerbate them.
The so-called “catch-up” effect helps explain the disparities. Countries with lower wage levels can achieve higher percentage growth more easily. Bulgaria, for instance, had the lowest hourly wage in 2025 at €10.5, up from €5.7 in 2020. In contrast, Germany's wages rose from €28.6 to €34.5—a smaller relative gain. This dynamic is also visible in inflation and nominal growth data: Bulgaria (84.2% nominal growth), Hungary (82.7%), and Romania (73.1%) saw the highest nominal increases, but inflation was also high—34.1%, 53.7%, and 44.6%, respectively. Italy recorded the lowest nominal rise at 9.5%, followed by Malta (13.3%) and France (14.1%), yet even with below-average inflation, wage growth failed to keep pace.
The gap in absolute wage levels remains wide. Luxembourg pays the highest hourly wage at €49.7, while Bulgaria's €10.5 is the lowest. Northern and Western Europe continue to offer the highest wages, while Eastern Europe lags. Among the Big Four, Germany leads at €34.5 per hour, while Spain trails at €19.5. This persistent disparity underscores the uneven economic landscape across the continent.
For context, broader economic trends are reshaping Europe. The UK inflation rise to 3.3% highlights how energy price shocks continue to pressure households. Meanwhile, renewables surpassing global electricity demand growth offers a glimpse of structural shifts that could influence future wage dynamics. And as Europe grapples with balancing digital economy growth with personal privacy, the interplay between technology, regulation, and labour markets will remain critical.
