Prices: Heil: Further relief in the event of prolonged high inflation

Prices
Heil: Further relief in the event of prolonged high inflation

Federal Labor Minister Hubertus Heil (SPD) has promised additional relief for citizens if inflation continues to be high. “It is clear that if we keep a very high price level in the long term, we will find new answers,” Heil told the Rheinische Post.

The traffic light coalition quickly decided on a relief package worth 30 billion euros to provide targeted help to citizens and cushion social hardship. “If, for example, the price increases last in the long term, we have to organize permanent relief,” said the minister.

Specifically, Heil pleaded for “socially graded climate money” to compensate for rising CO2 prices. He was rather reluctant to lower VAT on food. “In everything we do, we also have to ensure that the relief actually reaches those who need it.”

Salvation: the state can only cushion particular hardships

Heil underlined that the state could not compensate for all losses caused by increased inflation. Although the state can now cushion particular hardships, it cannot completely compensate for the price increases for everyone through subsidies. “It’s about supporting people with normal and low incomes in a targeted manner,” said Heil.

With a view to a possible gas supply stop, Heil said that a unilateral gas embargo by Germany against Russia “would plunge us into a double crisis, then we would be in stagflation, i.e. in an economic crisis and prices rising even more”. The German economy is still growing, said the SPD minister.

“At the moment we are not assuming that the sky will fall on our heads this year. We have economic growth and an extraordinarily stable job market,” he said. “If the situation escalates economically, we will not hesitate for a second and act decisively, for example by further extending short-time work.”

dpa