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Euro hasn't led to exploding prices

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Euro hasn't led to exploding prices
Photo: DPA
13:20 CET+01:00
Though many Germans believe that prices have risen dramatically since the introduction of the euro a decade ago, statistical reality for most goods and service tells a different story.

Consumer prices in Germany have risen by an annual average 1.6 percent in the 10 years since the introduction of euro banknotes and coins, the national statistics office Destatis said on Friday.

That is slower than in the 10 years before the euro, when inflation in Germany stood at an annual average 2.2 percent, the office said in a statement with a view to the 10th anniversary of the physical launch of the single currency on January 1, 2002.

Nevertheless, the statisticians pointed out that the cost of living in Germany increased sharply at the start of the 1990s in the wake of German unification.

But inflation slowed again in subsequent years and averaged 1.4 percent each year in the last six years of the existence of the Deutsche mark, between 1996-2001, the office said.

Over a much longer period, from the creation of the Deutsche mark in 1948 until 2001, inflation in Europe's powerhouse economy stood at an annual average 2.6 percent, Destatis said.

Since the launch of the euro, raw materials prices – and fuel and energy in particular – have constituted the main factors behind rising prices.

By November this year, the prices of heating oil and fuel had risen by 85 percent higher over levels seen immediately before the introduction of euro banknotes and coins. Electricity prices have increased by 66 percent in the same period. By contrast, housing rents have risen by just 12 percent.

In the months following the introduction of the euro notes and coins there were widespread reports that businesses were charging much higher prices for basic goods and services. That led some Germans to refer to the currency as the Teuro, a combination of the word teuer, or expensive, and euro.

AFP/DPA/The Local/mdm

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