Germany on the Brink as middle class shrinking, inequality growing: Spiegel

Germany is expecting its worst economic crisis in 50 years, with diminishing prosperity, a shrinking middle class and growing inequality, according to top news magazine Der Spiegel’s recent report.

In the report published on Thursday, high inflation, skyrocketing energy prices and a slowing economy are counted as Germany’s recent crises that have worsened after Russia began a military operation in Ukraine in February.

“The losses in prosperity will be permanent. Germany, according to the forecasts, is in decline,” said economist Michael Fratzscher, adding that the German economy will slide into recession this winter with a tenfold increase in the exchange electricity price, numerous corporate bankruptcies and a permanently damaged economy.

A tough decade is looming for the German middle class or better to say, everyone, but the top 10 percent of the country, after nearly two golden decades of rising incomes, steady economic growth and little unemployment.

“I'm afraid that soon we won't be able to afford the nice life we live. We’re nervous,” said Nicole Geithner, working as a paramedic and living a family of four in Dewsden with the gross household income of 90,000 Euros. 

Families with two children and a net income of 3,000 Euros per month, for example, are worried about social justice in the country as citizens must pay 1,000 Euros more a month for gas and electricity and purchase prices of 1 million Euros for a two-bedroom apartment.

The report revealed that during the second quarter of this year, real wages fell by 4.4 percent. The Sparkassenverband savings banks association estimates that 60 percent of households in Germany soon will no longer be able to put money aside.

In recent weeks, thousands have taken to the streets in protest in the cities of Leipzig, Magdeburg and Pforzheim, and it’s possible this is only the beginning.

Politicians are warning of the possibility of a “hot autumn,” some of a winter of rage, referring to possible protests and unrest.

MG