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Germany's 9-euro ticket isn't over

August 31, 2022

For three months the German government pushed down inflation with a mobility flat rate. While the 9-euro ticket has run its course, its public appeal will remain, says Mathis Richtmann.

People standing on a station platform holding up signs that read " 9-Euro ticket"
The 9-euro ticket has been overwhelmingly popular. Will the government follow up with a similar scheme?Image: Jörg Carstensen/dpa/picture alliance

One scorching summer long, the German government showed its mettle: The 9-euro ticket almost singlehandedly brought down inflation in Germany. The price increase in the country was a full two percentage points lower because of the flat-rate ticket, according to calculations by the German Economic Institute (IW)

People in Germany could buy the ticket from June to August of this year for — you guessed it — €9 ($9) and use all regional public transport throughout the country with it — a 10-hour ride from east to west or 50 times around Berlin with the city's circle line because, well, why not.

The key point is that the federal government in Germany fixes prices for local transport as well as elderly care, medical care, or water supply. If the government lowers these prices, the general price level — i.e., inflation — drops proportionately.

Misjudging the power of the state

The ticket has been one of the most popular policy interventions in Germany; more than 50 million tickets were sold. But it will not be renewed any time soon

DW's Mathis Richtmann
DW's Mathis RichtmannImage: Philipp Böll/DW

Inflation in Germany and throughout Europe is hitting people hard. So, at first glance it makes sense that many want the European Central Bank to fix it. But pointing to the United States as an example doesn't work. Price hikes across the pond are largely due to the excessive cost of energy. And the European Central Bank can't pump gas.

Government intervention in prices is much more likely to work, as the 9-euro ticket shows impressively.

Price caps in the United States brought about an upswing

Germany is funding a war, supplying weapons and it may be about time to learn from war economies of the past on how they fared.

To cope with rampant inflation during World War II, the Franklin D. Roosevelt administration intervened in production prices for commodities. After 1942, the General Maximum Price Regulation allowed for far-reaching caps on prices in the US market.

The project was a success. Prices stabilized and production expanded. Because both the government and private companies could once again plan with future prices, investment surged, and welfare grew. 

The 9-euro ticket was a success

The German government could learn from such creative policy. The 9-euro ticket acted as a price cap for regional trains and public transportation. It not only allowed people in Germany to get from A to B cheaply. For three months it was clear that there was a fixed price for slow travel.

This went down well with the public. The popularity of the ticket is hardly surprising. After two years of the government interfering in mobility, the quick implementation of the ticket was a relief.

And the ticket worked: mobility apps and ticket machines were quickly converted, and the masses flocked across Germany on trains.

These masses also exposed the failures of the recent past: At least €50 billion in investments are needed to improve German railways and staff are terribly overworked. 

However, Germany's government seems mostly concerned with cutting next year‘s budget.

Using the creative power of the state

But the current cost-of-living crisis is so glaring that we should save every single percentage point of inflation. The 9-euro ticket cost the state €2.5 billion in three months. Add to that maintenance costs private companies and the Germany's 16 states, the Bundesländer, need to bear.

The federal government could cough up the required sums. The impact on the budget would be nothing compared to the upheavals this winter is set to bring.

Already, some in Germany's intelligence community fear a "winter of rage." Extremists could exploit the rising prices to call for widespread protests. The state should counteract this with relief, now. 

Of course, the 9-euro ticket can only be a puzzle piece of additional measures to curb the cost-of-living crisis. 

But the success of the ticket will fuel discussions about price caps in other areas. People in Germany now know what the state can do if it wants to. Because when the state uses its creative power, a crisis stabilizes.

The article was originally published in German.

Is Germany's €9-ticket a gimmick or a role model?

DW Volos 2022 | Mathis Richtmann
Mathis Richtmann Reporter and editor with a special interest in money and mining.