It's all quiche to me
Dear Reader,
On my way back from an appointment in the west of Berlin this afternoon, I dropped into a fairly anonymous looking cafe to grab a bite to eat. My order: a slice of vegetarian quiche and a cappuccino.
While the food and coffee were perfectly agreeable, I’m not writing to recommend it to you. The bill for this fairly meagre lunch (including tip) was €15.
Now, perhaps I shouldn’t have been surprised by such a bill on a street just a stone’s throw from the Kurfürstendamm. But, even in Berlin’s luxury west end, the prices never used to be quite so exorbitant.
The reason is inflation, with figures published this week for February making for depressing reading.
They show an overall increase in the price of goods at 8.7 percent in comparison with February of last year. And in the realm of food, prices have surged by an incredible 22 percent.
That is all the more sobering for the fact that it was in February of last year that the price surge really started to take flight.
A comparison with February 2021 - before inflation really started to kick in - is perhaps more enlightening. And that gives a price rise for foods of close to 30 percent.
Those are numbers that Olaf Scholz should probably have chewed upon before he addressed the Bundestag this morning to claim that his Zeitenwende had been an unbridled success.
In his typical self-congratulatory style, Scholz commented that all the gloomy prognoses of the autumn - that there would be energy shortages, mass bankruptcies, blackouts and a ‘hot autumn’ of protests - never came true.
That all shows that his government “gets things done,” he claimed.
That is true. It is to Scholz and his government’s credit that they marshalled Germany through the winter in a surprisingly smooth manner. For all the talk of a government riven by personal rivalries, at the end of the day it is the results that matter. And broadly they have delivered.
But the fact that inflation is still raging despite billions of euros thrown at energy price caps (energy inflation was still at 19 percent last month) rips a glaring hole in the chancellor’s narrative of success.
Persistent inflation is eating through savings and dragging down the spending power of millions of people in a way that hasn’t been seen in the modern era.
In real terms, Germans are becoming poorer in a way that we haven’t seen since the end of the Second World War.
Only those lucky enough to be represented by powerful trade unions are escaping the worst of it through big negotiated pay rises.
But the number of Germans who are members of trade unions has been dwindling over recent decades. While these people are core Social Democrat voters, there aren't enough of them anymore to secure Scholz’ party a comfortable majority at the next election.
That could be why, despite the government’s altogether competent handling of the crisis, Scholz’ Social Democrats are still wallowing on 20 percent in the polls. The way things stand now, his ‘traffic light’ coalition will struggle to hold its majority at the next election.
Building floating LNG terminals in a matter of months is very impressive. But if it doesn’t put more cents into people’s pockets at the end of the month, it’s probably not going to win you many votes.
I haven't adjusted my internal value for money assessment to the new prices yet. I find myself silently screaming "How much?" whenever i see the prices for anything these days, particularly food. I guess we will all have to reconcile ourselves to them eventually though, as even if inflation goes back down next year, the prices will not, this is the new benchmark.
Just a couple of quick questions, you mentioned that the cost of your lunch included a tip. I lived in Frankfurt for a year from 2021 to 2022. Just as it is in my own country, Australia, tips are, I thought, rare. My questions are: (1) were you raised in North America? and (2) is tipping in Germany an accepted custom of which I am not aware and thus should have been aware when I lived there?