The hard knocks being suffered by the European middle class are leading to shifts in the political landscape of Europe. The causes date back to long before the financial crisis of 2008. It is therefore an illusion to hope that this dip is temporary, and that we will recover from it simply through ‘business as usual’, as many politicians and policy-makers in Europe still seem to believe.

‘The squeezed-out middle’ - a concept that mainly appears in American debates but which, as The Broker’s dossier shows, applies increasingly to Europe - is in fact the flipside of inequality.

Today’s Europe seems barely equipped to tackle the challenges of the twenty-first century. It is time to lay a new political, economic and financial foundation for the European project.

Import competition, offshoring and automation are threatening the middle classes in Europe. New jobs have been created mainly for the lower and the upper segments of the labour market. But not for the middle. And because most of those jobs are in the non-tradable sectors with low productivity growth, this trend also threatens long-term economic growth and increases inequality. Can jobs be created for the middle classes without embracing protective policies?

Occupational change in itself cannot explain the decline of the European middle class. But it could be a threat to its sociopolitical foundations

Since the outbreak of the financial crisis, the financial and indebtedness status of European households has significantly changed. To protect the middle class from over-indebtedness, policies are required at European level.