SHARE
COPY LINK

ECONOMY

Germans like globalisation, but worry about income gap

A new survey shows most Germans support the process of globalisation, although they’re worried about that the gap between rich and poor people could grow.

Germans like globalisation, but worry about income gap
Photo: DPA

The survey, conducted by the infas research firm, commissioned by the Bertelsmann Foundation, and set to be released on Tuesday at an economics conference in Kiel, showed 64 percent of Germans associated the word “globalisation” with positive things.

Just over half believed Germany would have lower economic growth if it wasn’t for globalisation.

But many Germans were worried that growing internationalisation also had negative effects.

A full 92 percent felt a growing gap between rich and poor and feared that increasing energy and raw materials shortages were likely or very likely.

Other things they worried about included the state going bankrupt (81 percent) outbreak of a disease pandemic (60 percent) and wars over economic issues, such as trade (40 percent).

Germans felt international organisations were best placed to deal with the problems created by globalisation. Just over half of those surveyed thought the European Union could get things under control, while 57 percent had faith in the G-20, the grouping of the world’s largest economies.

The survey seems to largely mirror results of other research showing Germans widely support internationalisation, but with reservations.

The annual Transatlantic Trends survey by the German Marshall Fund showed most Germans supported efforts by the European Union to work on international matters as well as German involvement in countries like Afghanistan.

“Citizens feel that with our economic model, we’ve done well getting through the crisis situations of the last few years,” said Gunter Thielen, the head of the Bertelsmann Foundation in a statement. “However, they also see the economic risks of global connectivity and expect resolute action from politicians.”

The Local/mdm

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

ECONOMY

German consumer prices set to rise steeply amid war in Ukraine

Russia's war in Ukraine is slowing down the economy and accelerating inflation in Germany, the Ifo Institute has claimed.

German consumer prices set to rise steeply amid war in Ukraine

According to the Munich-based economics institute, inflation is expected to rise from 5.1 to 6.1 percent in March. This would be the steepest rise in consumer prices since 1982.

Over the past few months, consumers in Germany have already had to battle with huge hikes in energy costs, fuel prices and increases in the price of other everyday commodities.

READ ALSO:

With Russia and Ukraine representing major suppliers of wheat and grain, further price rises in the food market are also expected, putting an additional strain on tight incomes. 

At the same time, the ongoing conflict is set to put a dampener on the country’s annual growth forecasts. 

“We only expect growth of between 2.2 and 3.1 percent this year,” Ifo’s head of economic research Timo Wollmershäuser said on Wednesday. 

Due to the increase in the cost of living, consumers in Germany could lose around €6 billion in purchasing power by the end of March alone.

With public life in Germany returning to normal and manufacturers’ order books filling up, a significant rebound in the economy was expected this year. 

But the war “is dampening the economy through significantly higher commodity prices, sanctions, increasing supply bottlenecks for raw materials and intermediate products as well as increased economic uncertainty”, Wollmershäuser said.

Because of the current uncertainly, the Ifo Institute calculated two separate forecasts for the upcoming year.

In the optimistic scenario, the price of oil falls gradually from the current €101 per barrel to €82 by the end of the year, and the price of natural gas falls in parallel.

In the pessimistic scenario, the oil price rises to €140 per barrel by May and only then falls to €122 by the end of the year.

Energy costs have a particularly strong impact on private consumer spending.

They could rise between 3.7 and 5 percent, depending on the developments in Ukraine, sanctions on Russia and the German government’s ability to source its energy. 

On Wednesday, German media reported that the government was in the process of thrashing out an additional set of measures designed to support consumers with their rising energy costs.

The hotly debated measures are expected to be finalised on Wednesday evening and could include increased subsidies, a mobility allowance, a fuel rebate and a child bonus for families. 

READ ALSO: KEY POINTS: Germany’s proposals for future energy price relief

In one piece of positive news, the number of unemployed people in Germany should fall to below 2.3 million, according to the Ifo Institute.

However, short-time work, known as Kurzarbeit in German, is likely to increase significantly in the pessimistic scenario.

SHOW COMMENTS