PRESS STATEMENT Necessary measures to prevent lasting losses of prosperity

Jörg Hofmann, President of IG Metall, said regarding the federal government’s announcement of a gas price cap: “The decision to cap electricity and gas prices is welcome and has long been called for by IG Metall. It is the most sensible measure to ease the burden on households and businesses regarding energy prices while simultaneously curbing inflation. It is good that the federal government now intends to implement this.”

The Joint Economic Forecast presented today by the economic research institutes confirms IG Metall’s analysis and forecast regarding current economic developments. The Joint Economic Forecast predicts a mild recession in the second half of 2022 and the first half of 2023.  Jörg Hofmann: “This is a clear rebuttal of the scaremongering by certain employer representatives, as well as by politicians. What is needed now is responsible action, not self-serving fake news.”

The reason for the decline in economic output lies in the massive drop in household purchasing power in the face of sky-high inflation.Jörg Hofmann: “This forecast confirms our position that one-time payments are not sufficient to permanently raise household incomes to match the increased cost of living. We urgently need a raise in the pay scales if we do not want to accept a permanent loss of prosperity and, with it, a decline in overall economic performance.”

The institutes also confirm IG Metall’s view that the majority of companies are able to pass on cost increases to customers. Energy-intensive companies, which do not have this option—or cannot use it to its full extent—are affected much more severely. In addition to the electricity and gas price caps, further government support is needed here to avert bankruptcies.

Jörg Hofmann: “The Joint Economic Forecast confirms that IG Metall is right to stick to its course. In the coming months, we need a ‘magic square’: Substantial, lasting wage increases must strengthen purchasing power. An effective cap on gas and electricity prices must limit the burden on businesses and households. Energy-intensive companies facing existential crises need support to secure jobs there. And last but not least, we need to tax crisis profits to maintain social balance in our country.”