What does euro area adjustment mean for your Big Mac (index)?

Blog post

What does euro area adjustment mean for your Big Mac (index)? – an update

The Big Mac Index offers some quick insights into the state of currencies around the globe by comparing the price of Big Macs across countries. In the

Publishing date: 25 August 2014
Authors: Guntram B. Wolff

Original post February 2013: 'What does the Big Mac say about Euro Area adjustment?'

The Big Mac Index offers some quick insights into the state of currencies around the globe by comparing the price of Big Macs across countries. In the euro area, one of the reasons we have the common currency is to be able to simply compare prices across countries. In this blog post I update my previous findings presented in February to show how much Big Mac prices have changes since then. Has euro area price adjustment continued in the last 6 months when looking at Big Macs?

Based on the data just published by (), the following graph shows that in a number of countries, the Big Mac price was adjusted significantly. Most visibly, in Greece the price was dramatically reduced from €3.3 to €2.6. In Italy and Belgium, the price was reduced by 10 euro cents. Prices were adjusted upwards in Finland (35 cents), France (30 cents), and Estonia (5).

Finland and France have now become the two most expensive countries, while Greece is the cheapest place to get a Big Mac. The price of a German Big Mac is average, with the Spanish Big Mac now cheaper than the German one. It remains quite costly to eat fast food in Italy.

Overall, the Big Mac index shows that price adjustment in EMU continues, and has also continued in the last 6 months, in particular in Greece. However, price increases in France without price increases in Germany suggest that France may be losing a competitive edge to Germany. A similar picture emerges when looking at CPI inflation. German inflation in the last 6 months has been undercutting French inflation. To achieve price adjustment in a sustainable way, German Big Macs will have to become more expensive relative to the euro area while French, Italian and Spanish Big Macs should become cheaper.

About the authors

Guntram B. Wolff

Guntram Wolff is a Senior fellow at Bruegel. He is also a Professor of Economics at the Université libre de Bruxelles (ULB).

From 2022-2024, he was the Director and CEO of the German Council on Foreign Relations (DGAP) and from 2013-22 the director of Bruegel. Over his career, he has contributed to research on European political economy, climate policy, geoeconomics, macroeconomics and foreign affairs. His work was published in academic journals such as Nature, Science, Research Policy, Energy Policy, Climate Policy, Journal of European Public Policy, Journal of Banking and Finance. His co-authored book “The macroeconomics of decarbonization” is published in Cambridge University Press.

An experienced public adviser, he has been testifying twice a year since 2013 to the informal European finance ministers’ and central bank governors’ ECOFIN Council meeting on a large variety of topics. He also regularly testifies to the European Parliament, the Bundestag and speaks to corporate boards. In 2020, ranked him one of the 28 most influential “power players” in Europe. From 2012-16, he was a member of the French prime minister’s Conseil d’Analyse Economique. In 2018, then IMF managing director Christine Lagarde appointed him to the external advisory group on surveillance to review the Fund’s priorities. In 2021, he was appointed member and co-director to the G20 High level independent panel on pandemic prevention, preparedness and response under the co-chairs Tharman Shanmugaratnam, Lawrence H. Summers and Ngozi Okonjo-Iweala. From 2013-22, he was an advisor to the Mastercard Centre for Inclusive Growth. He is a member of the Bulgarian Council of Economic Analysis, the European Council on Foreign Affairs and advisory board of Elcano. He is also a fellow at the Kiel Institute for the World Economy.

Guntram joined Bruegel from the European Commission, where he worked on the macroeconomics of the euro area and the reform of euro area governance. Prior to joining the Commission, he worked in the research department at the Bundesbank, which he joined after completing his PhD in economics at the University of Bonn. He also worked as an external adviser to the International Monetary Fund. He is fluent in German, English, and French. His work is regularly published and cited in leading media.