GERMANY experienced an economic collapse in the 1920s, only to then cause and barely survive the catastrophe of the Second World War. But after that it soon became an “economic miracle,” and Germans, unlike any other nation in Europe, have for decades lived in a certain kind of security that many today also consider prosperity.

Although it had its economic and financial challenges, such as reunification with East Germany and high unemployment in the late 1990s, Germany was and remained a global economic giant. “Exportweltmeister,” as the Germans boast. World export champion.

The war in Ukraine changed that. Germany had for years been dependent on cheap Russian gas and energy sources, which after Putin’s invasion of Ukraine became unsustainable. At the same time, global supply chains broke down, so for the first time in several decades Germans are facing the fact that certain products are unavailable in supermarkets, that they wait months for certain laptop brands, that various parts for repairing many machines are missing, etc.

Fear of economic collapse reigns in Germany

On top of shortages – and the two years of the pandemic that tested everyone’s nerves – came inflation, probably Germans’ greatest fear. Stories are legendary about how the German mark lost value at the peak of the crisis in the 1920s and 1930s, and that was the prelude to Adolf Hitler’s rise to power. It is a dangerous combination of historical fears and an unwillingness to face the more uncomfortable challenges of existence. Germans had it very good, and the question is whether they are ready for things to go badly.

Fear of economic and social instability is visible in all media and in the way these topics are discussed in the German public sphere. A certain panic is being created by announcing terrible consequences of the coming crisis.

“Does winter start on July 11 this year? Will German apartments be cold from this Monday?” public broadcaster ARD asked dramatically.

“No one currently knows for certain whether the maintenance of the Nord Stream 1 pipeline that began this morning will really end after the planned eleven days, or whether routine maintenance will then become political and Russia will no longer deliver gas through that pipe to Western Europe,” ARD reports.

Consumers in Germany must be prepared for further food price increases, all media warn.

Food price increases

According to data from the Ifo institute, consumers in Germany will have to dig even deeper into their pockets in the coming months to secure basic groceries. According to a recent survey by that Munich institute, “almost every surveyed retailer” is planning higher prices.

Higher price expectations also apply to other retail sectors, the institute said.

“As a result, inflation rates will probably remain high for the time being,” said Ifo’s head of economics Timo Wollmershäuser. Last week the Federal Statistical Office estimated inflation for June at 7.6 percent year-on-year. Although inflation has slowed somewhat, it is still at a very high level. Food rose above average, by 12.7 percent.

However, if you compare German food prices with prices in some popular holiday countries, you will notice that the price of food and alcoholic beverages there is sometimes significantly higher. Shopping on vacation can be expensive, many German media warn. In the meantime, Croatia is cited as one of the more expensive destinations.

“Of all selected European holiday countries, the corresponding price level was highest in Switzerland and was 54 percent higher than in Germany,” writes the Federal Statistical Office. Prices in April served statisticians for the analysis.

Preparations for winter: Energy saving a priority

At the municipal level, in cities and municipalities, they are already preparing for the coming crisis.

“In the current situation, saving energy is a task for society as a whole,” said the deputy general director of the German Association of Cities, Verena Göppert, to the news agency dpa.

Cities are therefore currently considering many short-term savings measures. “They are leaving out lights, giving up hot water in public buildings, turning off fountains, regulating the temperature of air conditioners and bathing water differently,” Göppert said.

More and more poor people in Germany

The weekly Der Spiegel asks in its new issue, “Is Germany’s prosperity in danger?” and states: “Germany is facing a deep crisis, with inflation reaching record levels and recession on the horizon. Even the middle class has begun to feel the pain.

In Berlin these days, the 2022 Poverty Report titled “Between Pandemic and Inflation,” prepared by an alliance of non-governmental associations, was presented.

Since reunification, there have never been so many poor people in Germany, activist Ulrich Schneider said, and the number of impoverished people in the country reached 13.8 million in 2021.

“Never before have more children and elderly people had to live in poverty in the country, and the poverty rate has never risen as quickly as in 2020 and 2021. Even among the employed, there is a growing number of those who do not have enough money to live, along with social and cultural participation. Especially among the self-employed, such a pronounced increase has never been recorded,” writes Der Spiegel.

The figures cited by the report are from 2021. Last year inflation and rising energy prices played a much smaller role than they do now. “What will the situation be this autumn when back payments for electricity and gas begin arriving in mailboxes across the country?” the German weekly asks.

“Despair will take hold in the lower strata of society”

Activist Schneider believes that “pure despair” will then take hold in the lower strata of society, but also that the usual additional bills for energy costs not covered by advance payments will also hit parts of the middle class.

On public television ARD, talk shows discuss topics such as “Fear of poverty: where is the price spiral leading us?”. Germany is gripped by its own possible downfall.

“Germany’s inflation rate is at a record level: plus 7.9 percent in May 2022 compared with the same month last year. Almost everything is becoming more expensive, especially food and energy,” ARD reminds viewers in the program announcement. Inflation has become a topic that permeates the whole society.

A government response is being sought

Given high energy prices, the German Social Association (SoVD) immediately called for a new social concept from the federal government. “People’s worries and fears are growing ever greater,” said the vice president of this union federation, Ursula Engelen-Kefer.

“Many are already asking themselves whether in winter they will have to sit in a cold apartment or even end up on the street because they can no longer pay the bills. People with such existential fears should not be left alone,” she warns.

That is why it is no surprise that the ruling coalition appears in public combining two modes: it reassures the people that it has plans for all challenges, but also prepares them for the fact that changes in quality of life are inevitable. After decades of stability and progress, another major crisis is coming, the biggest since the collapse of the 1920s.

The chancellor warns that difficult years lie ahead for Germans

Vice Chancellor Robert Habeck thus reminded citizens in an interview for the public broadcaster that he had always emphasized that there are a number of ways to combat a possible bottleneck. This includes, for example, reducing overall gas consumption, building LNG terminals, or starting coal-fired power plants in order to reduce electricity generation from gas.

“We will also set up an action platform on how industrial consumption can be reduced for money,” Habeck emphasized. “There are many politically agreed steps that are now being taken.” Representatives of the ruling coalition – made up of Social Democrats, Greens, and liberals – also promised further support for citizens.

“I am sure that we will get further relief. It is also necessary,” said Green Party leader Ricarda Lang. SPD spokesperson for energy policy Nina Scheer called for an energy-saving bonus. “We want to reward saving even more: an energy-saving bonus would be an additional incentive to increase savings,” she said.

At the same time, Chancellor Olaf Scholz warned that high prices will not disappear anytime soon. “Difficult years lie ahead of us,” the chancellor warned Germans.

“It is no secret that Germans are generally considered to need more security and that they are also more pessimistic than other nations,” states the portal Horizont and presents research that quantifies German emotional reactions in relation to the problem of inflation.

Inflation has hit Germans emotionally

A project by the market research agency DVJ Insights in five European countries showed that rising prices affect Germans emotionally three times more than other people in Europe.

About 45 percent of respondents in Germany say that inflation causes them some emotional problems, while for 33 percent this is very much the case. In Great Britain and Denmark, the value of the mildly concerned is the same as in Germany, and somewhat lower in Norway at 41 percent. The number of people troubled by concern over the decline in the value of money ranges between 18 and 23 percent in these three other nations, which is significantly lower than in Germany.

In any case, Germany is facing a difficult winter by their standards. In the Balkans, roughly every second winter is like that.

But it is important to note that Germans are currently living in existential fear, which will certainly have a long-term impact on the policy of the current government and toward Ukraine. Wars and economic collapse have always been good conditions for revolutions. Chancellor Olaf Scholz is facing historic challenges.

Source: index.hr