Germany expects tough years ahead with diminishing prosperity, a shrinking middle class, and growing inequality. This is uncharted territory for the government and society, and both are facing some difficult choices, German magazine Spiegel wrote.
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"One doesn't have to look far for the roots of the problem: high inflation, skyrocketing energy prices, and a slowing economy. Not to mention the challenges associated with tackling climate change," it added. "And the situation wouldn't even improve particularly quickly if the war in Ukraine were to come to a sudden, unexpected end. On the contrary. Several different crises are coming together at the moment to form a perfect storm."
"That the German economy will slide into recession this winter is no longer really a question. And there is growing evidence that it could become particularly severe – with a tenfold increase in the exchange electricity price, numerous corporate bankruptcies, and a permanently damaged economy. The losses in prosperity, says economist Michael Fratzscher, will be permanent. Germany, according to the forecasts, is in decline," Spiegel noted.
"After nearly two golden decades of rising incomes, steady economic growth, and little unemployment, a tough decade is looming. At least for those who aren't happy about paying up to 1,000 euros more a month for gas and electricity, three euros for butter, and purchase prices of 1 million euros for a two-bedroom apartment. In other words, everyone but the top 10 percent of the country," German magazine highlighted.