Inflation in Germany: Scholz wants to take countermeasures with “concerted action”.

Created: 07/04/2022 11:04 am

By: Katja Thorwarth

In Germany, inflation includes gas, groceries and other goods.

Chancellor Scholz wants to take countermeasures with a "concerted action".

Berlin – Chancellor Olaf Scholz (SPD) is planning a so-called “concerted action” in view of the rising inflation and the growing price level.

At the start of this Monday (July 4th) a dialogue with trade unions, employers, the Bundesbank and scientists has been initiated.

Now that the call for further relief has become louder, something must be done to counteract the price pressure on people in Germany.

The SPD chancellor already expressed his concern about the price pressure in the ARD summer interview.

"If the heating bill suddenly increases by a few hundred euros, then that's a sum that many people can't really cope with.

This is social explosives.” Scholz speaks of a long-term process, with observers expecting that decisive rounds of “concerted action” will only follow after the summer break.

"Concentrated action" against inflation: Olaf Scholz's goals

The gas price is currently the most pressing problem.

Green Economics Minister Robert Habeck warned of a price explosion at public utilities if Russia turns off the gas tap and large suppliers continue to get into trouble.

The biggest challenges in terms of prices overall - as Olaf Scholz suspects - did not follow until next year.

"For this year, almost everyone who did the math says we've absorbed about 90 percent of the price increases among lower- and middle-income people through the many measures we've taken."

Chancellor Scholz wants to counter the price increases with a "concerted campaign".

© Christoph Soeder/dpa

Olaf Scholz plans measures on inflation: union demands for price guarantees

DGB boss Yasmin Fahimi campaigned on Sunday for a price guarantee for basic electricity and gas needs.

She told Springer-Blatt

that the basic needs of every adult and child should be determined in advance.

The parliamentary group leader of the left, Dietmar Bartsch, called for something similar at the

.

In principle, the trade unions resist the idea that price increases or inflation are fueled by higher wages.

Accordingly, Verdi boss Frank Werneke said: "Permanently rising prices must be fully offset by permanent collective wage increases." This also applies to pension adjustments and the minimum wage.

The relief must be delivered later.

Historical background

1967 saw the first downturn in the economic boom of Germany.

The SPD Economics Minister Karl Schiller therefore wanted to coordinate the anti-crisis policy in a "concerted action" with employers and trade unions.

The state wanted to use its own measures to influence price developments and the economy.

Consensus with the social partners should help in the matter - and strengthen democracy and community spirit.

Scholz wants that too - his motto: "We have to hook up and stick together."

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Federal President Frank-Walter Steinmeier commented on inflation in the ZDF summer interview

Federal President Frank-Walter Steinmeier also made a statement and called for further relief.

"We haven't experienced that before, four times higher prices, not only at the gas stations, but above all for the gas," said Steinmeier at the weekend in the ZDF summer interview.

There should be instruments that make life easier for low earners in particular.

Chancellor Scholz was not very receptive to this.

He referred to the previous relief measures amounting to 30 billion euros: "Right now all these measures are being rolled out," he said.

"That won't work now by agreeing on a 30 billion euro package [...] and then we'll discuss the next ones again."

In times of crisis, the Greens want redistribution because of inflation - the FDP is against it

Basic security and generally small and medium incomes should be relieved - that's what the Greens are demanding.

Your deputy parliamentary group leader, Andreas Audretsch, has brought into play a contribution from the particularly wealthy.

"Everyone must now ask themselves how they can make a contribution," said Audretsch.

"This is especially true for those who have a lot, for the richest."

The counter-speech comes from the FDP.

Federal Finance Minister Christian Lindner rejects more debt and higher taxes.

This "would be toxic and an impoverishment program," said Lindner of the

.

Even massive increases in government spending are out of the question for him.

"A central contribution of the state is to avoid additional price pressure through solid finances." Instead of just dampening the consequences of inflation, the state must fight the causes.

Further proposals for inflation come from Hubertus Heil (SPD)

The social climate money proposed by Minister of Labor Hubertus Heil (SPD) is likely to come back on the table in the "Concerted Action".

According to the proposal, climate money should be paid once a year - for single people who earn less than 4,000 euros gross per month, and for married people with a total of less than 8,000 euros.

The CDU social wing called for a reduction in VAT on staple foods.

, the new Left Party chairmen Janine Wissler and Martin Schirdewan demanded

a price cap for staple foods.

(ktho/dpa)