The prices for the most important things for living are rising extremely sharply in a very short time. In the meantime, the inflation rate for food, electricity and fuel is already in the double digits, for gas even in the triple digits. Our neighbouring countries around Germany and also other EU states have long since reacted and passed corresponding relief packages for their citizens. The German government has hesitated for a long time and the measures now adopted, such as the abolition of the EEG levy, will hardly lead to any noticeable relief. Economics Minister Habeck comments on the price increase with: “We will become poorer”.
Inflation at 40-year high – MPs increase their salaries
Inflation has now reached a 40-year high. The official inflation rate in March is 7.3 percent compared to the previous year. But perceived, or rather individually, inflation for middle and lower incomes is already far above that. Daily shopping, filling up the car with petrol and paying electricity and heating costs is already a financial feat for many. The costs for these simply have to be saved elsewhere.
Image: Sandro Halank, Wikimedia Commons, CC BY-SA 4.0, CC BY-SA 4.0, via Wikimedia Commons
“We will become poorer” – Minister of Economy testifies to own helplessness
The statement of our Minister of Economics: “We will become poorer”. With this, Habeck presents the rising prices as a fact that cannot be influenced and thus testifies to both his powerlessness and his helplessness. By “we”, however, he does not really mean everyone, because at almost the same time, the members of the Bundestag and many state parliaments, such as those in Baden-Württemberg and Hamburg, have already increased their own salaries as a precaution.
ECB acts hesitantly and thus weakens the euro
The federal government has already lowered its growth forecast for the current year and also expects higher inflation of 6.1 per cent. The Federal Statistical Office has calculated an inflation rate for industrial products of 30 per cent. This inflation will also reach the end consumer with a certain delay. The ECB still describes inflation as a “temporary phenomenon” and is rather hesitant to curb it with the necessary measures. In this way, the ECB is increasingly weakening the euro against the dollar, which inevitably leads to a further increase in import costs. And this of course hits energy sources again, so that the cost of fuel, gas and electricity will rise even further.
Boycott measures hit us even harder than Russia
However, the main cost driver is the boycott measures against Russia due to the Ukraine war. These boycott measures are not only driving up energy prices, but also the prices for many raw materials and also for food. This raises the question of whether Germany is not harming itself more than Russia with the boycott measures. If there is even a boycott of Russian natural gas, a massive slump in economic output is unavoidable. Then not only Germany but probably all of Europe will be heading for a recession. Then, at the latest, we will all become even poorer.
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