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FOCUS on the government' recent financial "presents":
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Nine reasons why the savings package of the traffic light coalition is not received by citizens

All in all, the savings package of Chancellor Olaf Scholz's (SPD) traffic light coalition looks very powerful. Nine reasons explain why citizens will not get anything out of it in the end.

If you want to understand the different division of tasks between politicians and journalists, you basically only have to remember two words: Truth and effect.

The good journalist looks for the truth, including the one behind it. In doing so, he does not use, to pick up a nasty word from the NDR editorial board, the "political filter."

The politician, on the other hand, always aims for effect first. If the truth helps him do that, so much the better. But it is not a necessary condition for his advancement. As a rule, he puts a party-political filter over the truth - until it begins to glow red, green or yellow.

Which brings us to the word relief package. Linguistically, an orgy of relief has been celebrated for weeks. Relief packages I and II - together 30 billion euros - were followed yesterday by relief package III (65 billion euros). The finance minister called it "massive", the chancellor "precise and tailor-made".

And indeed, in the relative world of politics, this is a relatively high sum. At least it can be used to achieve a media impact.

Austerity package? No citizen will be relieved - unless he stops filling up his tank and heating his home.

In the real world, however, i.e. in the world of car drivers, shareholders, savers, life insurance policy holders, workers and employees, househusbands and housewives, gas, electricity and oil customers, this is a relatively small sum that evaporates in the wallet faster than a summer rain in times of drought.

Within the next twelve months - and this is a bold claim - not a single German citizen will see a net reduction in their tax bill unless they stop heating, refueling, shopping, working and, best of all, breathing.

The uncomfortable truth is this: The force of the economic dislocation is more violent than the government's capabilities. The government, which is trying to save the day here, cannot have a lasting effect on people's everyday lives in the face of the elemental economic forces of inflation, stock market crashes, energy shortages and the consequences of a stubborn pandemic.

One-off payments of a few hundred euros will have no effect

1 Real wages and thus also the purchasing power of pensions are falling at high speed. In the second quarter of the year, the Federal Statistical Office calculated a price-adjusted wage decline of 4.4 percent in view of high inflation. For the current year, the Institute of Economic and Social Research predicts a real wage loss of 3.6 percent.

This means that the purchasing power of all blue- and white-collar workers - if the sum of all gross wages in 2021 is taken as a basis - will decrease by 56.2 billion euros. The average wage earner (49,200 euros in 2021) will lose around 1,800 euros.

This can only be remedied by wage increases that at least compensate for purchasing power. One-off payments in the order of 200 or 300 euros - as now announced - will not have any effect here.

The state itself continues to drive up the burden

2 The state itself - which pretends to relieve its citizens - is driving their burdens to ever new heights. On Sundays, it relieves the burden, and on weekdays it collects the money. The gas levy alone, which is supposed to bring in 34 billion euros, halves the effect of yesterday's relief package.

Energy will become noticeably more expensive even without the gas surcharge

Even without the gas levy, a noticeable increase in the price of all types of energy is to be expected. Many gas suppliers have already raised prices. According to Check24 the average gas price for new customers is 185 per cent higher than in the previous year. Electricity costs have increased nevertheless by 31 per cent. At the gas stations one hardly believes its eyes. And: The big rollover of the global energy price explosion to the end consumer is still to come.

We are learning that no state in the world can reimburse its customers for what an energy market that has come apart at the seams is demanding.

The state is relieving itself, but not us.

4. 19 percent value-added tax on all inflated goods is another factor. This also reduces prosperity. 19 percent of 100,000 euros is 19,000 euros. But 19 percent of 120,000 euros is about 23,000 euros. In this way, the state earns a share. It relieves itself, but not us. In the first half of 2022, the state collected 17.6 percent more taxes than in the same period last year.

Stock market losses reduce German prosperity

5 The stock market is buckling under the pressure of events. In 2022 alone, investors in the Dax, including many ordinary citizens and their insurance companies, have so far had to absorb a loss in value of around 270 billion euros. This money is gone not statistically, but in very real terms. It reduces the capital income and thus the prosperity of the Germans.

Riester pension serves deliberate impoverishment, not capital formation

6 Without exception, all pension products designed by politicians are not convincing in the current situation. The guarantee given by the legislator of a repayment of the contributions made - for example in the case of the Riester pension - leads to the obligation of fund managers to invest in conservative financial assets. But with conservative investments, progressive inflation cannot be beaten by definition. This means that in the current situation, the Riester pension serves to deliberately impoverish people, not to build up capital.

Even life insurance policies no longer bear fruit in a crisis situation

7 Life insurance policies also bear no fruit in this situation. They are also obliged by law to buy government bonds and the government bonds of reputable states cannot compensate for the high inflation rates. Allianz SE's performance reflects the current unattractiveness of its products and the market's expectation that many people will cancel or let their life insurance policies lapse. Europe's largest insurance company therefore lost around 18 percent of its value, or a good 12.6 billion euros, in 2022 alone.

8 At the bottom of the food chain lives the German saver, who is being punished first with negative interest rates and now with minus interest rates for his savings activity. As long as the interest lies below the inflation rate, it comes with it to the loss of value. The experts of the specialist portal Tagesgeldvergleich.net calculated that from January to June 2022, German savers had to cope with a loss of purchasing power of 93.3 billion euros due to rising inflation and low interest rates. By the end of the year, they will have lost a total of 186.6 billion euros, which means a loss of purchasing power per capita of 2,140 euros.

Real estate sector also affected by crisis

9 The real estate market - even if many had hoped otherwise - cannot decouple itself from this development in the long term. It is running out of solvent customers, which is why almost all experts assume that purchase prices will soon fall throughout Europe, thus also reducing the value of existing properties.

Conclusion: The 65 billion package will at best change the perception of reality, but not reality itself. The government has yet to have a serious discussion with its citizens about the depth and duration of this economic and social turnaround. For this dialogue, the government does not need money, but courage. Or as the great British storyteller William Somerset Maugham used to say, "Sincerity is the boldest form of bravery."

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