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Euro hasn't led to exploding prices

The Local · 16 Dec 2011, 13:20

Published: 16 Dec 2011 13:20 GMT+01:00

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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.

Story continues below…

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

The Local (news@thelocal.de)

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Your comments about this article

14:30 December 16, 2011 by derExDeutsche
Anybody that has traveled Europe before and after the introduction of the Euro knows that things have changed. However, now shoppers in countries like Switzerland, with their strong currency, go shopping in the Eurozone. It used to be possible to go to the PIIGS for a cheap holiday. So it has come full circle, now the Swiss go to Germany for cheaper prices. Just a little trickle up poverty.
18:03 December 16, 2011 by ufo4u00
I have seen both sides of the coin, I lived a better quality life and had more from my money with the DM. That is a fact for the staticians.
15:51 December 17, 2011 by berfel
I'm not an economist. I don't even play one on TV.

But a relatively-fast slow in the rise (if not an actual decline in some items) of the price of goods and services sounds like the onset of recession.

Which is no surprise because the confidence in the Euro is rock-bottom. Naturally a consequence of German and French governments trying to restart the heart of the currency; after the autopsy.
16:20 December 17, 2011 by ukpunk1
Bloody liars! Look at the prices of automobiles.
21:55 December 17, 2011 by The-ex-pat
16:20 December 17, 2011 by ukpunk1

Bloody liars! Look at the prices of automobiles.

I have to agree. What was being paid in DM we are now paying one to one in €. Also, would we really be paying nearly DM3 for a litre of diesel, something tells me not.
11:04 December 18, 2011 by bugger
This article is a ridiculous propaganda lie.

Most citizens are not that dumb to believe it.

While the wages never went up, prices stayed face value, i.e. what cost you DM 100.- before cost you € 100.- soon after - which is double the price.

The first prices exploding like this were the food prices back then.

Everyone alive who went through the currency change will remember this.
19:52 December 18, 2011 by William Thirteen
the root of the problem is wage stagnation.
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