Roughly 42% of Germans expect their revenues to decline amidst soaring inflation and the looming menace of recession next year. According to a new survey carried out by Deutschland Trends, low income people and the residents of the former East Germany are most pessimistic.
One in two German citizens with a monthly income less than 1,500 euros fears that his income will decline even more. This fear is shared by 49% of Eastern Germans.
Germany is not alone – all Europe is facing crisis, triggered by the Covid pandemic and exacerbated by anti-Russian sanctions. European Central Banks estimate that this year annual inflation in the Eurozone will reach 8.1% and at least 5.5% in 2023. Millions of Europeans live on the brink of fuel poverty due to skyrocketing energy prices.
This situation isn't limited to mainland Europe. Some residents of Wales, one of the poorest regions of the UK, have reportedly had to eat pet food in the wake of the cost-living crisis. Last month, the cost of food in Wales rose 12% compared to November 2021. Inhabitants of richer British regions are also cutting costs – they plan to spend less on Christmas presents, social events and even food. The FTSE 350 Retailers Index dropped 32% this year – the biggest fall since 2008. Right now the British economy is facing inflation that is nearing its four-decade-high.
Economists have stressed the obvious many times: European economies are highly dependent on Russian hydrocarbon supplies and the prospect of finding a meaningful substitute looks dim.
As if the situation was not difficult enough, strict sanctions are backfiring and ordinary people are suffering most.