BERLIN – Higher inflation is compounding the plight of savers and the European Central Bank should respond by raising its interest rates from 0%, Bavaria’s finance minister, Albert Fueracker, told daily Bild in comments published on Wednesday.
Germany’s annual consumer price inflation accelerated in May, advancing further above the ECB’s target of close to but below 2%, the Federal Statistics Office said on Monday.
Consumer prices, harmonised to make them comparable with inflation data from other European Union countries, rose by 2.4% in May, up from 2.1% in April.
“Germany is a country of savers. The ECB’s longstanding zero interest rate policy is poison for typical savings plans,” Fueracker, a member of Bavaria’s conservative Christian Social Union (CSU), told the mass-selling daily newspaper.
“In combination with the now rising inflation, the expropriation for savers is becoming more and more noticeable. Bavaria has been warning for years that the zero interest rate policy must be ended – now it is high time,” he added.
Conservative Germans have long complained that the ECB’s 0% interest rates hurt savers as they are left with little if any gain – a problem compounded by rising inflation eroding the value of their nest eggs.
Monday’s price figures for May showed a national measure of inflation rose to 2.5%, the highest level since 2011.
Under the headline “Inflation is eating up our savings”, Bild ran a separate story warning: “Germany’s workers, pensioners and savers in fear because of high inflation!”
On Tuesday, the German federal government’s economy minister, Peter Altmaier, said he was “watching this development with inflation very closely” but could not pass judgment on it yet.
Germans vote in a federal election on Sept. 26. So far, inflation has not gained traction as a campaign issue, but it is likely to exceed 3% later this year as a tax hike and statistical effects add to price pressures.
Already the biggest critics of ECB policy, some conservative Germans fear that the central bank is excessively complacent about inflation and its easy money policy could herald a new period of higher prices.