Germany is in big trouble. No end in sight for German consumers, as German factory prices rise by 13.3% so far this year
For years Germany has had a reputation in the EU for being the model of economic prudence and careful management of the economy. Is this reputation now under threat?
Latest figures released by the EU show that Germany’s inflation rate has almost trebled this year so far, from 1.6% in January to 4.6% last month, and the rate of increase shows no signs of slowing down.
German inflation, 12 months from Nov 2020 — Oct 2021
- -0.7% — Nov 2020 (UK: 0.6%)
- 4.6% — Oct 2021 (UK: 2.9% in Sept, latest data)
- Germany’s inflation rate is now higher than all nine EU ‘Club Med’ countries except Spain
- Its rate is now higher than the Eurozone average
Germany’s days as the EU’s economic policeman now under threat?
Over the years Germany has repeatedly lectured the more free-spending EU countries in the south — the so-called ‘Club Med countries’ — and was the main mover in imposing stringent austerity measures on countries such as Greece and Italy. The Club Med group (more formally known as ‘EU Med’) comprises Croatia, Cyprus, France, Greece, Italy, Malta, Portugal, Slovenia and Spain.
Today Germany’s inflation rate is higher than that of all the Club Med countries with the exception of Spain. It is even higher than the Eurozone average of 4.1%.
Additional higher prices are racing down the Autobahn
One way of seeing what might be ahead is to look at what is known as the Industrial Producer Prices Index. This shows the changes in the ex-works sale prices of all products sold on the domestic market, excluding imports. It helps to see what is coming down the road — or in this case the Autobahn — for consumers.
The latest information on industrial producer prices was released by the EU’s statistics office on Thursday last week (04 Nov 2021).
German industrial producer prices, latest 12 months data, Oct 2020 — Sept 2021
- Oct 2020: -0.7% (the UK: -1.4%)
- Sep 2021: 13.3% (theUK: 6.7%)
A historical perspective
Talk to the average Briton of a certain age and they will tell you about the 1970s when inflation in the UK went as high as 24%.
Talk to the average German, and the institutionalised memory goes back much further, to its hyperinflation in the Weimar Republic following the First World War. Back then it became impossible to estimate the inflation rate as prices doubled by the hour.
By 1923, the Reichsbank could not print money fast enough as the Mark became increasingly worthless. The final banknote it issued in 1923 was for 50 trillion marks and people were taking wheelbarrows of cash to go and buy a loaf of bread.
And finally, a word from our German friends
Germany’s largest-selling newspaper BILD published an article about German inflation and the French head of the European Central Bank (ECB). The Senior Business Editor at Welt, a very serious newspaper, even tweeted it out yesterday. He commented:-
“Good Morning from Germany where soaring prices fuel anti-ECB sentiment. Bild, biggest-selling newspaper, recently branded ECB chief Lagarde as “Madame Inflation”, saying she “wears Chanel clothes” but “mocks the fate of pensioners, employees, and savers.”
- Holger Zschäpitz, Senior Business Editor, Welt, 07 Nov 2021
Over the last few weeks, I have been following both Bild and France 23 along with the French RFI
You may have to have a translation on your phone or computer.
News aktuell: Nachrichten aus Deutschland und der Welt
Aktuelle News aus Deutschland, Europa und der Welt. Alle Informationen, Bilder und Videos zu Skandalen, Krisen und…
France 24 - International breaking news, top stories and headlines
Breaking news and world news from France 24 on Business, Sports, Culture. Video news. News from the US, Europe, Asia…
Soaring prices fuel anti-ECB sentiment in Germany
Frankfurt (AFP) - As inflation soars to its highest level in three decades in Germany, Simon and Lena Wendland, parents…
The bitter pill for all economies
Firstly it is important to state that inflationary pressures are affecting all countries, including the United Kingdom, as a result of the disastrous measures introduced as a result of the Covid crisis. It is hardly surprising that if governments pay people to sit at home all day, economies are going to suffer significantly.
On top of that, we now have the new obsession: the ‘climate crisis which is taking over from the ‘Covid crisis’ on our television screens.
This is starting to fuel dramatic increases in the cost of energy people need to heat their homes, as well as the upcoming cost increases in all manner of everyday expenditures in order to meet the objectives of what appears more and more like the world government agenda.
Are Germany’s good years coming to an end?
In the good years, Germany prospered as a result of having a captive EU market where it could sell its manufactured goods. While the United Kingdom continued to focus on services, Germany’s industrial powerhouse drove on, producing increasing numbers of Audis, Volkswagens, BMWs, Bosch dishwashers, and other products. Since the turn of the century, this was further fuelled by Germany having what was effectively a discounted currency, the Euro, making its products look cheap.
Almost unmentioned in the media is the cost to Germany of Angela Merkel’s unilateral tearing up of the EU’s migration policies in 2015, which I have documented before. Integrating over a million migrants into Germany in such a short time is proving to be very expensive. Couple that with the scandals coming out of Germany which includes car emissions and energy prices, not to mention Mr Putins holding Germany and the rest of the EU to ransom with the gas pipelines, then I have to say it is coming to an end and Germany and it people are in very big trouble.
I took a look at what Germans are now paying at the tills with both shopping and fuel at the petrol stations, it does not look good at all.
First their shopping bills
The inflation shock list in the supermarket! Things are about to get expensive.
EXPENSIVE INFLATION: Who will be affected the most when shopping? Find out!
No matter whether visiting the hairdresser (plus 3.3 per cent compared to the same month last year) or going out to eat (3.7 per cent more). Germany hits the expensive shock!
The prices for just about EVERYTHING has gone up. New figures from the Federal Statistical Office show where it hurts the most in the wallet.
In the supermarket
Almost nothing that can be found on the supermarket shelves remains stable in price: eggs, cheese, coffee, alcohol. And: The prices for food, in general, rose by 4.9 per cent compared to the same month last year.
Also means: Compared to the average inflation (4.1 per cent), these have become more expensive than average. Germans have to pay a lot at the cash register. A shopping cart that cost 100 euros a year ago is now almost 105 euros.
Particularly tough for vegetarians and vegans: vegetables rose by 9.2 per cent — particularly dramatically for tomatoes (32.8 per cent). But oils and fats (6.4 per cent), as well as eggs (13.3 per cent), also showed blatant increases.
Due to the explosion in the price of grain, toast bread (10.2 percent) and frozen cakes (7.1 percent) are also becoming much more expensive.
The horror list in the supermarket:
PRODUCT and PRICE INCREASE
tomatoes+ 32.8 percent
percentCooking oil+ 15.2 percent
Eggs+ 13.4 percent
Can of peas+ 10.8 percent
toast+ 10.2 percent
cut cheese+ 8.2 percent
Frozen cake+ 7.1 percent
Coffee beans+ 6.4 percent
Quark+ 6.3 percent
band Aid+ 5.4 percent
beef Roulade+ 4.8 percent
cognac+ 4.7 percent
Meat ready meal+ 4.6 percen
butter+ 4.5 percent
Lamb’s lettuce+ 3.6 percent
Canned fruit+ 3.6 percent
Frozen vegetables+ 3.2 percent
Then we see these other items
PRODUCT and PRICE INCREASE
rug+ 4 percent
Melissa spirit+ 4 percent
Health baths+ 4 percent
Over-the-counter medicines+ 4.2 percent
Hair tint+ 4.7 percent
band Aid+ 5.4 percent
softener+ 9.7 percent
Candles+ 7.6 percent
You can read more here
The inflation shock list in the supermarket! Things are about to get expensive - Expaturm
No matter whether visiting the hairdresser (plus 3.3 percent compared to the same month last year) or going out to eat…
Germany is in big big trouble
Rush for Czech fuel
From: M. TABACZYNSKI
Berlin / Petrovice — Inflation continues to hit! Food, electricity, gas, refueling, building, hairdressing — everything costs more and more this expensive autumn.
According to the Federal Statistical Office, consumer prices rose again — this time by 4.1 per cent compared to the same month last year. The inflation rate rose above the four per cent mark this September for the first time since December 1993.
For example, when you refuel these days, people have to queue up for a price difference of 43.9 cents …
Over 40 cents price difference compared to Germany at the Czech petrol stations
The pump nozzles are running hot in the Czech Republic, and many Germans used the weekend for a trip to the cheap paradise. While in Dresden (Saxony) the liter of super cost 1.779 euros yesterday
German vehicles were parked at every gas station in the border area yesterday, many with license plates from Dresden or Saxon Switzerland. But it didn’t stop with a full tank; canisters were also filled.
“At the moment it is a catastrophe with fuel prices in Germany. 55 liters fit in my tank. I save around 20 euros in the Czech Republic, ”says Michael Bradnick (54).
morning, the situation in the Czech town of Chlumec, about 40 kilometers away, is almost paradisiacal: Here the liter of super costs 1.34 euros. Makes a difference of 43.9 cents per liter. You can save 20 to 30 euros so quickly.
Tino Scholze (25): “I haven’t been to Germany for two months to refuel. It’s just too expensive. We’re going on a little family outing, then go shopping. “
At the Ono petrol station (11 petrol pumps) in Chlumec, despite the large waiting area, a huge tank line formed that even reached the street. The waiting time: 40 minutes for one full tank. But for many that was not the end of the cheap excursion: Because schnitzel with dumplings is available here in the restaurant for around 190 kroner (7.50 euros). The beer for 1.80 euros. The carton of cigarettes costs an average of 40 euros.
“In the past two weeks, more and more Germans have come here. We are recording an increase of around 30 percent, ”says waitress Tereza Palečná (25) from the“ Orion ”restaurant in Petrovice. “The Germans are usually friendlier than the Czech guests.”
Michael Bradnick (54): “There’s more to come with the prices in Germany. That was just the beginning. Especially when you depend on the car for your job and are still in the low-wage sector, you look old. “
Benzinpreise: Ansturm auf Tschechen-Sprit
Berlin/Petrovice - Die Inflation schlägt weiter zu! Essen, Strom, Gas, Tanken, Bauen, Frisör - alles kostet in diesem…
Fraught times in Germany and in the EU
What you will not see on the BBC a pro leftist Remain media institution is this
Why Europe’s energy prices are soaring and could get much worse
Prices of natural gas are skyrocketing: at the Dutch Title Transfer Facility, Europe’s leading benchmark, prices have risen from €16 megawatt per hour in early January to €88 by late October, a hike of more than 450% in less than one year. This, in turn, has sent electricity prices skyrocketing.
Citizens in countries like Spain, Italy, France and Poland are now facing all-time-high energy bills that add to the economic woes caused by the pandemic. The popular discontent has put governments on high alert, with ministers scrambling to come up with emergency measures, even if they’re short-term and only partially effective to cushion the impact.
In Italy, Roberto Cingolani, minister for the ecological transitions, has already warned Italians to expect a 40% increase in their bills over the next months. France said it will send one-off €100 payments to over 5.8 million low-income households. In Spain, the government has promised to bring prices down to 2018 levels. Madrid also sent a letter to Brussels asking for EU-wide action. “We urgently need a European policy menu pre-designed to react immediately to dramatic price surges,” the letter said.
But as the crisis spills over the bloc and citizens express increasing concern, it’s unclear how much power the European Union can exert to rein in the excesses of a liberalised energy market whose primary source comes from outside its own borders.
Yes, Germany is in very big trouble. However, as you can see many other EU countries will be following Germany very soon.
[ Sources: EU Commission official statistics agency Eurostat/ UK Office for National Statistics/ Bild/ France23/ Welt/ euronews/ Expaturm]