Chancellor Olaf Scholz (SPD) wants to work with employees and employers to discuss solutions for dealing with the current price increase. Scholz said on Wednesday in the general debate on the 2022 budget that he wanted to call both sides together for a “concerted action”.
“Together with the social partners, we want to discuss how we deal with the current price development,” said Scholz. This is an “unusual step”, but one that is urgently required in view of the current situation. It is about a “specific effort in an extraordinary situation,” explained the Chancellor.
The term “concerted action” is known from the times of the first grand coalition. In view of the first economic crisis in the Federal Republic, Economics Minister Karl Schiller (SPD) called together representatives from the government, the Bundesbank, business associations and trade unions in 1967. “Concerted” means “arranged” – i.e. the attempt to voluntarily coordinate and reconcile interests.
Scholz made it clear that this coordination process should not be “permanent” and that there would be no wage negotiations. In Germany, however, the social partners and the state have a “long tradition of working closely together for the common good in such situations”. The problem of rising prices has not been solved, said the Chancellor. He cited the war in Ukraine “initiated by Russia” as the main cause, which is fueling energy and commodity prices. The price increases are still due to “one-off shocks”. Scholz warned of a “permanent development with inflation rates that are too high”.
He also made it clear that state aid could not be paid out indefinitely. “In everything we do today and in the future, one thing is clear: long-term subsidies financed by credit are not a solution – especially since we want to comply with the constitutionally prescribed debt brake again next year,” emphasized Scholz. The aim must be to “sustainably reduce inflationary pressure”.
According to a survey, most people in Germany are dissatisfied with the federal government’s measures to combat inflation and expect prices to continue to rise. 38 percent of Germans currently expect that consumer prices will remain high. 56 percent assume that they will continue to rise, according to the survey by the opinion research institute Forsa for the RTL/ntv “Trendbarometer”. Only 6 percent of those surveyed expect prices to fall again soon.
At 66 percent, people in eastern Germany are slightly more concerned about rising prices than in western Germany (55 percent). It is also somewhat more pronounced among citizens with lower incomes than among those on higher incomes.