Anger over rising living costs and the strain on public services has brought hundreds of thousands of protesters to the streets in several European countries, with demands ranging from high rent prices to poor conditions in schools and universities.

The demonstrations in France last weekend were the largest, with over 500,000 people taking to the streets. Most of the protests proceeded peacefully, but there were also instances of people looting and destroying shops, setting fire to town halls, and attacking police.

Italy, Spain, Portugal, and Albania also held separate protests on Saturday and Sunday. The direct triggers for each country were different, but high fuel and energy costs were a common factor in many of them. The war between Iran and Ukraine has significantly pushed up diesel prices across Europe.

Capital Economics Chief European Economist Andrew Kenningham stated to CNBC that there is no "single trigger" for these riots. He added that rising energy costs may have played a role, but the increase was less than at the beginning of the 2022 Russia-Ukraine war, during which there were no similar violent protests.

Nevertheless, these demonstrations pose a common challenge to governments around the world: how to improve people's livelihoods and maintain public services while continuing to support families and control already strained public finances.

What triggered the protests?

Protests in France began last month when high school students criticized poor school conditions, including inadequate facilities and a shortage of teachers. Since then, the protests have gradually evolved into broader demonstrations concerning declining living standards and the deterioration of public services.

In Spain, the housing protests began in September when an 87-year-old woman Maricarmen Abascal was evicted after a financial investment fund increased her rent by 230%. She passed away two weeks later.

Thousands of protesters in Portugal also took to the streets on Saturday to protest against soaring housing and living costs.

The Portuguese Minister of State and Finance, Miranda Sarmento, stated on Monday: "People are clearly protesting against the cost of living, including the prices of diesel and fuel, but mainly against the cost of housing, which has risen significantly throughout Europe, and even more so in Portugal."

In Albania, protesters were angry about the poor conditions in universities and the high tuition fees, and demanded that Prime Minister Edi Rama resign. Some people threw burning bottles and other objects at the police, and set fire to cars and trash cans.

In Italy, a protest in Milan's city center on Saturday regarding the cost of living also ended in violence, with rioters attacking police with stones and paving bricks, and setting fire to roadblocks.

Kenningham The fundamental problem is that politicians are unable to provide many Europeans with hope for a better life. Due to slow economic growth and governments that have accumulated huge debts, there is almost no room to increase public spending or cut taxes.

Why now?

A professor at the Paris American Graduate School, Douglas Yates, stated that the escalation of violence in France is due especially to "a combination of various factors."

Yates said to CNBC's Steve Sedgwick: "This was a storm that later turned into a hurricane. Inflation has brought out those protesters against the cost of living who would be dissatisfied anyway."

Yates says that another factor is the presidential election in France in 2027, where the opposition parties are trying to take advantage of the growing dissatisfaction of the public with President Emmanuel Macron.

French Prime Minister Sébastien Léger has proposed a 2027 budget with the goal of reducing France's deficit. France's deficit this year is expected to reach 5.4% of its gross domestic product. Relevant measures include freezing the salary index for public employees and tightening regulations on sick leave reimbursement.

Yates added, "Finally, there are the students, those impoverished students. They initially made reasonable requests, hoping to have dilapidated infrastructure repaired and perhaps even to have air conditioning installed in their classrooms. Thus, these three forces came together to create an uncontrollable hurricane."

The economic situation is also deteriorating. According to data from the French National Institute of Statistics Insee, the unemployment rate in France rose to 8.3% in the second quarter of 2026, equivalent to 2.7 million people. The unemployment rate among those aged 15 to 24 increased to 21.6%.

Insee Final data shows that consumer prices rose by 3.1% year-on-year in September, higher than the 2.4% in August. Energy prices soared by 21.3%. Meanwhile, Le Monde cites Insee data indicating that purchasing power calculated per unit of consumption is expected to decline by 0.7% in 2026.

According to calculations conducted by the French National Institute of Economic Research for Le Monde, since 2024, there has been a decline in purchasing power, which means that a family with two adults and two children loses 1,200 euros (1,345 dollars) per year, while a single adult loses 600 euros per year.

According to Sarmento from Portugal, the situation varies from country to country in Europe; Portugal has a stronger fiscal position, and its debt is also much lower than that of France.

He said, "Those countries with higher debts have much less room for fiscal maneuver, but the core issue is that we need to address productivity and competitiveness at the European level."

"The growth of the European economy is not as strong as that of the United States. Without economic growth, there can be no higher wages, nor can there be more resources allocated to better public services and social support," Sarmento added.

Eurostat data shows that in the second quarter of 2026, housing prices in Portugal increased by 16.5% year-on-year, the highest annual increase in the European Union.

Sarmento indicates that the Portuguese government is seeking to increase the housing supply in order to reduce the costs of buying and renting homes, thereby addressing this issue.

Fiscal Pressure in France

As unrest intensified investors' concerns about France's debt and budget, the yield on French government bonds rose on Monday, and the euro weakened.

Goldman Sachs' senior equity strategist for Europe, Sharon Bell, stated on Monday during the “Squawk Box Europe” program on CNBC: “It is difficult to see a reduction in budget deficits without taking painful measures.”

"The tax burden on French companies is likely to increase. I think the overall tax burden in France may also rise. Fiscal consolidation means either spending less or raising taxes more, and both of these are very difficult situations."

RBC BlueBay Asset Management Market Strategy Director Mike Bell stated that France faces a "very real" risk of sovereign debt crisis.

What France needs to do is to straighten out its financial situation; they need to raise the retirement age – if a person can on average live to be 84 years old, they shouldn’t retire at 62 – but if that’s already the case before they even start discussing it, then you can imagine what would happen on the streets of France if they really tried to raise the retirement age... I mean, in the UK, the retirement age is 68 years old,” Bell added.