Paul Krugman proposes rent caps to combat European housing crisis

Nobel Prize-winning economist Paul Krugman has advocated for temporary rent caps as a measure to curb speculation and address the escalating housing crisis across Europe. Speaking to Euronews, Krugman noted that while the long-term economic solution involves increasing housing supply by removing construction barriers and liberalizing building regulations, the current market conditions have become “impossible” for many to endure.

Across several European nations, including Italy, France, Germany, Belgium, Spain, and Portugal, rising living costs have triggered widespread social unrest, particularly among young people and students. In Rome, reports indicate individual rooms can cost as much as 1,200 euros per month. Student organizations have warned that speculative practices are excluding thousands of young people from higher education, with many students spending nearly 40 percent of their monthly income on accommodation.

In addition to housing, Krugman warned that France’s public debt poses a significant risk to the stability of the eurozone. He also suggested that Europe should consider temporary protections for its own industries to navigate competitive pressures from the United States and China.