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MONEY

How the cost of living crisis is affecting people in Germany

Energy and some supermarket items in Germany are rising in price much faster than the overall inflation rate - and that has more than half of German households worried about their budgets, a new survey shows.

A supermarket trolley full of groceries. The prices of everyday items have gone up considerable in Germany in recent months.
A supermarket trolley full of groceries. Photo: picture alliance/dpa | Fabian Sommer

What’s happening?

With the cost of everyday items spiralling upwards, many people in Germany are feeling the strain. And a new survey has laid bare the impact on people.

Around 57 percent of people in Germany say rising prices are a “big problem” for them personally, according to a recent poll.

That’s a marked increase from July, when public broadcaster ZDF asked the same question and found that only 40 percent of respondents were concerned about rising costs at that time.

In some cases, energy prices have more than doubled.

The price of natural gas – which around half of German households use for heat – has quintupled in some cases.

READ ALSO: German households see record hikes in heating costs

What else is going up in price?

It’s not just the price of energy that’s rising steeply. Anyone who has gone to buy groceries in the past months will have noticed a major increase.

One analysis from Focus news magazine found that the price of several common supermarket items had rocketed upwards once more, with many grocery stores and discount retailers having increased their prices on October 1st to adjust to higher costs on their end.

At a 65 percent increase, sugar saw one of the biggest price hikes. The price for a kilogram of powdered sugar specifically, doubled.

Butter biscuit prices – a common snack in Germany – are up 20 percent, while coffee cream and honey both increased by 30 percent.

The price of ketchup climbed by 50 percent.

Goose leg and goose breast – typical German delicacy for holidays like Christmas – doubled in price to over €20 in some Munich shops, due to higher feed and transport costs recently.

57 percent of Germans reported that price increases were becoming a “big problem” for them in September 2022. Poll by ZDF.

What does this mean for people?

Those increases are far above the German inflation rate. Currently sitting at around 7.9 percent, the country’s inflation rate has broken post-war records several times already this year.

But one study finds many Germans feel – and act – as if the rate is much higher.

According to an Internationale Hochscule study done exclusively for the Welt newspaper, the Inflationsgefühl – or what respondents feel the inflation rate is actually like – sits at 34 percent.

Just over half those surveyed in that study reported they were “very concerned” about rising prices. Meanwhile, 37 percent said they are “somewhat concerned”.

Over 80 percent expect the problem to get worse.

Study authors say people in Germany may be overestimating the rate of inflation because the biggest increases are in areas they’ll tend to notice every day.

“We always perceive inflation where we have consumer spending,” International Hochschule Business Administration Professor Johannes Trey told Welt. “People are interested in what they have to pay every day to meet their basic needs.”

Most respondents say they’re planning on cutting spending in certain areas, with cuts in purchases for furniture, appliances, and travel the most popular cost saving measure. Around 80 percent say they’re making an effort to curb their electricity use.

READ ALSO: EXPLAINED: When should I turn on my heating in Germany this year?

Respondents are less likely to cut down on luxuries such as alcohol and tobacco—or media consumption like buying newspapers or streaming subscriptions.

Support for Ukraine still high despite price pressure

Although the financial stress people in Germany are experiencing has gone up, the general level of support for Ukraine among everyday Germans is still high – despite the war being one of the main causes of the record high inflation levels.

ZDF’s poll asked “should we keep supporting Ukraine even though it means higher prices for us?”

And 74 percent said “Yes” in September.

Although the upcoming winter is expected to come with even more financial strain, that number has trended slightly upward over the last three months.

Despite more than half of German households saying they’re under financial stress, most say support for Ukraine should continue. Poll by ZDF.

Meanwhile, the federal government is currently preparing a new €200 billion package of support, on top of the €100 billion already passed by the Bundestag over the last few months.

The package is expected to provide inflation relief by introducing everything from a temporary cap on the price of gas to a successor to summer’s €9 nationwide public transport ticket.

READ ALSO: Germany to thrash out details of €200 billion energy support package

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For members

GERMAN CITIZENSHIP

How much do you need to earn to qualify for citizenship in Germany?

Applicants for German citizenship need to be able to support themselves financially, but it's often unclear what that means in practice. Here's how to work out if your income is high enough for citizenship.

How much do you need to earn to qualify for citizenship in Germany?

Out of the requirements for qualifying for a German passport, supporting yourself financially is one of the most important – and one of the most confusing.

Many foreigners assume that the authorities have a magic number in mind and will often worry about whether their income is above or below this threshold.

In reality, though, the law is much more flexible. In section 10 of the nationality law, it states that applicants must show that they “can support themselves and their dependent family members without claiming benefits under the Second or Twelfth Book of the Social Code.”

In other words, that your income is healthy enough to not rely on the state for things like long-term unemployment benefits.

According to Fabian Graske, an immigration lawyer at Migrando, around €1,500 gross per month for a single person is usually considered enough to live on. 

That said, there isn’t really a one-size-fits-all approach to this quesiton. 

When it comes to working out if your income is high enough, you’ll need to take into account a number of factors that your case worker at the naturalisation office will also weigh up. 

That’s why it’s important to ask yourself a number of questions that go beyond just how much you earn: 

How high are your living costs? 

In Germany, there are huge regional differences in the cost of living, so what someone can afford to live on varies hugely from place to place.

For example, someone living in pricey Munich is likely to need much more money for rent or their mortgage than a resident of much more affordable places like Halle or Leipzig, so you should consider whether what you earn is enough to offer a basic standard of living in the city or town you live in. 

READ ALSO: Requirements, costs and permits – 6 essential articles for German citizenship

It is worth mentioning, though, that what you actually pay for rent and bills matters more than the averages. If you’re lucky enough to find an apartment with unusually low rent in Berlin, for instance, you can probably get away with earning less money as well. 

Are you single or do you have a family?

If you’re single and have no children, you’ll likely get a lot more lenience from the authorities when it comes to having a lower-than-average income.

A family sit at a lake.

A family sit at a lake in Bavaria. Image by Eva Mospanova from Pixabay

Of course, if you have dependents such as kids or a spouse who doesn’t work (or both), you’ll need to ensure not only that your own living costs are taken care of, but also that your family can survive on your income alone.

That naturally means you’ll be expected to earn a certain amount more for each dependent child or adult.

On the plus side, any income your spouse does earn will be counted alongside your own, so if you’re the one who is supported by their partner, the authorities will also take this into account. 

Is your job stable or unstable?

One key thing to think about when applying for citizenship is the security of your work contract. Someone who has a long-term contract with an employer and has passed their probationary period will be in a much better position than someone who is still on a three-month trial, for example.

This doesn’t mean you shouldn’t submit a citizenship application after just starting a new job, but be aware that the authorities may well wait to process your application until you’ve passed the initial probation and have been put onto a longer-term contract. 

A similar rule of thumb applies to people who are currently claiming Arbeitslosengeld I (ALG I), or unemployment insurance. Though this doesn’t disqualify you from citizenship, it may delay your application until you can find a stable job. 

READ ALSO: Can I still get German citizenship after claiming benefits?

Do you need to rely on welfare payments to get by?

A key aspect of German naturalisation law is working out whether you’re likely to be a financial burden on the state by relying too much on the welfare system.

The entrance to the Jobcenter in Düsseldorf,

The entrance to the Jobcenter in Düsseldorf, North Rhine-Westphalia. Photo: picture alliance/dpa | Oliver Berg

While everyone needs a helping hand from time to time, claiming benefits like long-term unemployment benefit (Bürgergeld) or housing benefit (Wohngeld) to top up your income sadly shuts you out of the naturalisation process and could also make it hard for you to qualify in the future. 

Luckily, this doesn’t apply to all types of state support – Kindergeld, ALG I and Bafög don’t count, for example – so seek advice from a lawyer or your local citizenship office if you’re unsure.

How old are you?

Though this is hard to fully quantify, age can sometimes play a role in assessments of your financial fitness in Germany.

A young person fresh out of university or vocational college may be seen as someone with high earning potential over the years, so in some cases the authorities may take a more relaxed approach to their current income.

In contrast, an older person coming to the end of their working life could be held to slightly stricter standards. 

This is also why it can be important to show that you have sufficient pension contributions or another form of security for the future, such as owning your own home or having lots of savings. 

READ ALSO: How can over 60s get German citizenship under the new nationality law?

What counts as ‘income’ under German law?

It’s important to note that income doesn’t just have to mean the salary you get at your job: income from rental properties, side hustles and freelance gigs can also be included, as well as things like alimony payments after divorce.

Once again, if you’re unsure, just ask. The citizenship offices are there to advise you and should give you clear instructions about what kind of documents count as proof of income in your application. 

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