Difficult years are ahead of people in Germany – that is the common message of the chancellor and the social partners. But at the start of the concerted action, they also give hope.

Chancellor Olaf Scholz (SPD) and the social partners have prepared people in Germany for a long crisis with high prices.

The government, trade unions and employers want to avert an imminent recession, as they made clear after the start of the concerted action in the Chancellery.

“The current crisis will not be over in a few months,” said Scholz. Russia’s war in Ukraine and supply chains disrupted by the pandemic created general uncertainty. “We have to be prepared that this situation will not change in the foreseeable future,” said Scholz. “We are facing a historic challenge.”

Longer dialogue process with several meetings

The aim of the talks are joint instruments to counter the price increases in Germany. A longer dialogue process with several meetings is planned. Results should be available in the fall. “As a country, we will only get through this crisis well if we join hands, if we agree on solutions together,” said Scholz. Society is much stronger than is sometimes assumed. “The message is important to me: We stand together,” said the Chancellor.

Employer President Rainer Dulger said: “This country is facing the toughest economic and socio-political crisis since reunification.” The crisis can only be overcome together. “We have difficult years ahead of us,” said Dulger. “Constant economic growth, as experienced before Corona and the Ukraine war, is no longer a matter of course.”

DGB boss Yasmin Fahimi said: “It’s about the perspective of 2023, and it’s all about doing everything now to prevent a recession, to stabilize locations, to maintain value chains and to secure jobs.”

“People are feeling the inflation”

It was agreed that there was no wage-price spiral, so inflation was not driven by high wages, said the head of the German trade union federation. Dulger said: “Wages are currently not a driver of inflation, but people are feeling the inflation.” The collective bargaining partners could absorb part of the inflation for the employees. “That doesn’t happen in the Chancellery,” emphasized Dulger.

“We are currently seeing the inflation drivers on the supply side: energy costs, scarcity of raw materials, missing intermediate products due to interrupted supply chains,” said Dulger. Energy taxes and network charges could be good levers to get rising energy prices under control. By reducing taxes and social security contributions, politicians can ensure that citizens get “more net from the gross”. The employers had also proposed eliminating the so-called cold progression in taxes.

Scholz: “Good start”

It is the job of employers to keep the economy and job market stable. That in itself is a Herculean task,” said Dulger. “In the company, we currently don’t know which fire we should go out first.”

Scholz spoke of a “good start” and confirmed that such meetings should now take place at regular intervals. Russia’s war of aggression changed everything. He referred to the previous relief packages and said many things would take effect in the next few days. The first thing to do was to develop a common understanding. Well-trodden paths had to be left, a spirit of togetherness had to be developed.

Fahimi praised the relief effects. An average employee household will be relieved by 1000 euros. “Nevertheless, the burden on private households goes well beyond that.” In advance, Fahimi had called for an energy price cap.

At Scholz, Dulger and Fahimi, among others, met with other representatives of the federal government and economists to discuss how the price increases could be mitigated.