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MONEY

EXPLAINED: The everyday products getting more expensive in Germany

Inflation is rising faster in Germany than at any point since 1993. We explain what that means for the price of certain items.

A woman takes butter off a shelf in a German supermarket.
A woman takes butter off a shelf in a German supermarket. Photo: picture alliance / dpa | Oliver Berg

Germany’s Federal Statistics Office announced last week that average inflation went up 3.1 percent in 2021 – the highest increase since 1993. And if we look at December 2021 compared to December 2020, there’s been an even sharper spike of 5.3 percent.

That’s a lot higher than the European Central Bank’s inflation target of around 2 percent, although experts say consumer prices should level out again. But what does it all mean for what you might pay at the grocery store, for your energy bills, or for new furniture and electronics?

READ ALSO: Inflation in Germany hits highest rate since 1992

A new analysis by Germany’s Federal Statistical Office (Destatis) sheds some light on how prices have changed in recent years. 

To begin with, the Destatis agency uses a hypothetical “basket” of goods based on what the average German household purchases, and compares how the prices of all those items put together change over time to come up with its figure.

That means if you don’t drive your own car, for example, you won’t experience the same inflation yourself that another household in Germany might, since Destatis includes petrol prices in its inflation calculation.

You can use the Destatis Personal Inflation Calculator yourself to see exactly how much more you can expect to pay. Below are a few general highlights from the price index.

Supermarket bills see big increases

Using 2015 as a base, certain grocery products saw particularly clear increases when individual measurements were last taken at the end of November 2021.

Butter tops the bunch with a 57.1 percent spike in price in the last six years. Whole milk, sliced cheese, and fresh bread rolls also saw increases – at 26.5 percent, 12.1 percent, and 15.2 percent respectively.

READ ALSO: Why everything is suddenly getting so expensive in Germany

A shopper holds a trolley at a Berlin supermarket.
A shopper holds a trolley at a Berlin supermarket. Photo: picture alliance/dpa | Fabian Sommer

Getting around costs more

Those who primarily or exclusively use public transport in Germany are getting hit considerably less with price increases than those who have to fill up their own vehicles regularly.

But fuel costs have hit public transport riders as well, who are paying just over 13 percent more now than they were in 2015.

Supergrade petrol has seen a 26 percent increase though, and diesel has spiked by 35 percent.

Heating and powering your home

The most volatile price fluctuations recently are in the price of heating oil. After decreasing by over 30 percent in 2020 relative to 2015 prices, it is now 47 percent more costly to heat your home in Germany now than it was six years ago. Electricity is also up about 12 percent.

READ ALSO: Households in Germany to get some relief on electricity bills

A radiator in a German home.
The cost of energy bills have skyrocketed in recent months. Photo: picture alliance/dpa/dpa-Zentralbild | Fernando Gutierrez-Juarez

Recreation and eating out

Unsurprisingly, going out for either a drink or a bite to eat has also gone up in price, but fairly uniformly across the board.

Whether getting a drink at a bar, a kebab, a Fischbrötchen or Currywurst after a late night out, or enjoying sit-down meal at a restaurant – prices for all these forms of going out have gone up by roughly the same amount – 17-19 percent – compared to 2015 rates.

Heading out to see a movie costs about 11 percent more than it did six years ago.

A person holds Fischbrötchen in Schleswig-Holstein.
A person holds Fischbrötchen in Schleswig-Holstein. Eating out costs more in Germany. Photo: picture alliance/dpa/dpa-tmn | Annette Frühauf

Electronics – where the savings are

The one notable exception to the upward trend in German consumer prices is in electronics, which are considerably more affordable now than they were in 2015.

A new mobile phone without a contract is 28 percent less expensive, while a new television set has dropped in price by a third.

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POLITICS

Why a push for tougher benefit sanctions in Germany is sparking a coalition row

The FDP's proposal to boost the German economy by coming down hard on unemployment benefit recipients and getting rid of early retirement is sparking trouble in the coalition government.

Why a push for tougher benefit sanctions in Germany is sparking a coalition row

The Free Democrats (FDP), who are a junior partner in the government with the Social Democrats (SPD) and Greens, are calling for stricter sanctions on those receiving Bürgergeld (long-term unemployment benefit).

According to a draft resolution ahead of the FDP’s upcoming party conference, those in Germany who refuse to work should have their benefits cut by 30 percent immediately.

“Anyone who does not fulfil their obligations to cooperate with citizen’s allowance (Bürgergeld) and, for example, refuses reasonable work without good reason, should face an immediate 30 percent reduction in benefits,” the paper states. The scope for stricter sanctions must be utilised, “up to and including the complete cancellation of benefits”, the paper adds. 

Unemployment Benefit 2 or Bürgergeld, which was formally known as ‘Harz IV’ before a recent reform, is a benefit for individuals and families facing financial hardship because of long-term unemployment or low income. 

Meanwhile, in January the German government already agreed to tighten these benefits. Under the plans, which were part of budget cuts, job centres can cancel Bürgergeld for unemployed people for a maximum of two months if those job seekers consistently refuse to take up work.

READ ALSO: How generous is Germany’s unemployment benefit system?

The two-page paper by the FDP outlines 12 points “to accelerate the economic turnaround” in Germany. 

As well as cutting unemployment benefits, the FDP wants to abolish being able to retire with a pension at 63 and instead want to make working later more attractive. They suggest getting rid of the employer’s contribution to unemployment insurance once the standard working limit has been reached.

Christian Lindner

German Finance Minister Christian Lindner (FDP) speaks in the Bundestag. Photo: picture alliance/dpa | Michael Kappeler

They also want to see tax benefits for working overtime and a reduction in bureaucracy at several levels, including in the construction sector.

The FDP executive committee plans to approve the paper on Monday, with the party conference in Berlin set to take a final decision at the weekend.

READ ALSO: Bürgergeld – Germany’s monthly long-term unemployment benefit to rise by 12 percent

However, it’s already sparking a dispute in the so-called traffic light coalition. Leading partner, the SPD, have rejected the proposals. SPD General Secretary Kevin Kühnert launched a public attack on the FDP, which is known for their business-friendly stance.

“The SPD will not allow our country to be run with the tact of investment bankers,” he told the Tagesspiegel on Monday, adding that “the basis of the traffic light coalition is and remains the coalition agreement”.

Bavaria’s state premier Markus Söder, of the opposition CSU, described the proposals as a “divorce certificate” for the coalition partnership.

Nearly 16,000 people had unemployment benefits cut last year

It comes after new figures revealed that job centres reduced the Bürgergeld rate from February to December last year for 15,777 people who either rejected job offers or did not want to accept or continue work or training.

In total, authorities recorded more than 226,000 cases of benefit sanctions last year. Most of these (84.5 percent) were because those affected did not turn up for appointments, according to the Federal Employment Agency (Bundesagentur für Arbeit) figures. 

Around 5.5 million residents in Germany receive the Bürgergeld benefit and 3.9 million of this group are considered employable, according to authorities.

READ ALSO: Unemployment benefits cut for almost 16,000 in Germany who refused to work

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