Germany in crisis
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German chancellor heckled amid promises on the cost of living
Germany’s Olaf Scholz had a rough reception as he visited the eastern German town of Neuruppin. The chancellor promised new measures to help with the cost-of-living crisis but was shouted down by protesters.
German Chancellor Olaf Scholz struggled to be heard as he was met with loud protests while addressing a civic meeting in the eastern German town of Neuruppin.
Both the far-right Alternative for Germany (AfD) party and the socialist Left Party had urged demonstrations over the rising cost of living amid spiraling inflation.
What happened at the event?
Scholz was speaking inside a fenced-off area in a town square along with a member of parliament from his own Social Democrats. Guests, some of whom were invited to ask the chancellor questions, were security vetted before entry. They included representatives of the local utilities, the Red Cross, a housing association, and a museum.
Some 300 people had gathered outside the fencing after the appeals from the AfD and Left Party opposition parties — both of whom enjoy their highest levels of support in eastern Germany — to demonstrate.
Some brandished signs urging the chancellor to resign amid boos and chants of “traitor to the people,” “liar” and “get lost.”
According to the local Märkische Oderzeitung newspaper, audience applause for the chancellor was drowned out by booing.
What did Scholz say?
The chancellor reiterated that he would present another package in the next few days to help people deal with high energy costs and soaring inflation.
Scholz spoke over a loudspeaker system as he battled to make his voice heard against the backdrop of noise from outside the barriers.
“More needs to happen,” Scholz said, while defending a new gas levy that will hit consumers from October.
The coalition had so far decided on some €30 billion ($30.5 billion) financial help for citizens, he said, while acknowledging not all of it had arrived yet.
Scholz also fielded a question from a child who asked if the shortage of gas caused by tensions with Russia after the invasion of Ukraine could affect school operations in the winter.
“I’m pretty confident we can make it work,” Scholz said.
Inflation: Germany seeks to defuse social ‘time bomb’
German Chancellor Olaf Scholz is under pressure to ease spiralling inflation. His plan is to come up with measures at a meeting of business leaders, trade unions and politicians. But they have very different ideas.
Leaders of trade unions and industry associations met at the German chancellery on Monday to begin what was called a “concerted action” to get the country’s cost-of-living crisis under control.
Exacerbated by Russia’s strategic strangling of Europe’s gas supplies, inflation has risen to 7.6% in June in Germany, with politicians and senior officials already warning that energy needed to be conserved ahead of the cold season this autumn.
“Citizens need to get by in their everyday lives,” Chancellor Olaf Scholz said in an interview with public broadcaster ARD on Sunday. “And if the heating bill suddenly rises by a few hundred euros, then that can be a sum that many people can’t really cope with.” The crisis, he added, was a “social tinderbox.”
One-off payments or wage hikes?
The chancellor went on to deny a story that had been through the German media over the weekend: That he was planning to resolve the issue with tax-free one-off payments.
Such one-off government payments, especially for heating bills, have been floated in the past week by members of his centre-left Social Democrat Party (SPD), but the government has been keen to underline that this was just one of many measures being considered.
Marcel Fratzscher, president of the German Institute for Economic Research (DIW), was among several economists to say that any solution needed to be long-term, not a one-off deposit for employees. “Only higher wages and social benefits will compensate the damage for people on middle or low incomes,” he told the DPA news agency.
For their part, the major trade unions have already promised to negotiate hard. The heads of Germany’s two largest unions, IG Metall, which represents 2.26 million industrial workers, and ver.di, the service workers’ union, both stressed that wages needed to keep pace with inflation, to protect the most vulnerable in society.
Around 13 million Germans are already affected by poverty
The government parties themselves have different ideas about what to do about the cost of living crisis. The Greens have already claimed that their most recent idea — a €9 ($9,40) ticket for monthly travel on regional and city transport across the country — has been a success, and many are already calling for the scheme to be extended beyond the summer, though Chancellor Scholz has since ruled that out.
But arguably the more powerful coalition partner is the neoliberal Free Democratic Party (FDP), whose leader Christian Lindner also happens to be the German Finance Minister. Ahead of Monday’s meeting, Lindner warned that he was against any more state expenditure.
“What we need is targeted relief, in order to reduce the loss of buying power,” he told broadcaster ARD. “And then incentives so that more is produced without state money to increase productivity.” He called instead for more free trade agreements or more highly-skilled immigration.
