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.
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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 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.
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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.
Germany: Tourism sector reviews the 9-euro ticket
After three months, the special offer of the 9-euro ($9.38) ticket for nationwide use on local and regional public transport is about to end. It made tourist highlights accessible at low cost, but not without criticism.
Image: Chris Emil Janßen/IMAGO
Sylt — a dream island destination at a bargain price
The white dream beaches of the North Sea island of Sylt attract hundreds of thousands of vacationers every year. Most of them are well-heeled, because Sylt is one of the most expensive vacation destinations in Germany. With the 9-euro ticket, at least the journey was possible at a bargain price.
Image: Chris Emil Janßen/IMAGO
Sylt — swamped by crowds of travellers
However, with the advent of the 9-euro ticket, the island of the rich and beautiful was virtually swamped by people with smaller wallets. The invasion of a rather atypical public made headlines: Punks and other groups critical of consumerism besieged downtown Westerland — much to the chagrin of the clientele who normally stroll here.
Image: Katarzyna Eiting/Eibner-Pressefoto/picture alliance
The benefits for Hamburg
In the greater Hamburg area, the 9-euro ticket has proved a sales hit: More than 1.8 million tickets were sold in the first two months. Many people from the surrounding area took advantage of the opportunity to travel cheaply to check out the sights of the Hanseatic city, such as the Elbphilharmonie concert hall. According to a survey, this saved more than four million car journeys.
Image: Marcus Brandt/picture alliance/dpa
More day tourists in Rhineland-Palatinate
As in many other regions of Germany, according to the Rhineland-Palatinate Tourist Board, many day tourists used the 9-euro ticket for excursions to the state's sights. No doubt a large number of them admired Trier Cathedral, which is a UNESCO World Heritage Site.
Image: Peter Schickert/picture alliance
A boost for Castle Neuschwanstein
The fairytale castle of Neuschwanstein in Bavaria has always been a magnet for visitors. But as a result of the coronavirus pandemic, the flow of visitors dried up here, too. The 9-euro ticket came at just the right time and boosted visitor numbers. Tegernsee and Chiemsee or Hohenschwangau Castle were also among the 9-euro winners in Bavaria.
In Saxon Switzerland, too, tourist attractions recorded an increase in visitor numbers thanks to the 9-euro ticket. Pictured here is the Bastei Bridge, where thousands of tourists explore the spectacular natural landscape, many of them on a day trip.
Image: Robert Michael/picture alliance/dpa
Public transport problems in rural areas
In rural areas it's better to be independently mobile because, like here in Mecklenburg-Western Pomerania, trains rarely run. Environmental associations are therefore calling for greater support for local public transport in rural regions and the expansion of the route network. According to a study, 55 million Germans outside the metropolitan regions are without adequate public transportation.
Image: Jens Büttner/picture alliance/dpa
Historic trains pick up speed
Historic trains like the seaside train "Molli" in Mecklenburg-Western Pomerania experienced an influx of visitors thanks to the 9-euro ticket. Operators say passenger numbers increased significantly during the three-month period. The same applies to the Harz narrow-gauge trains, which are already popular with tourists, and the "Rasender Roland" (Rushing Roland) steam train on the island of Rügen.
Image: Jens Büttner/picture alliance/dpa
Ideal for weekend getaways
The 9-euro ticket was particularly popular with weekend travellers. According to the Federal Statistical Office, in June, the first month of the special offer, the use of regional and local trains was 83% higher on Sundays and 61% higher on Saturdays than before the COVID-19 pandemic. As here in Stralsund, this led to high capacity use of trains and crowding at the station.
Image: Stefan Sauer/picture alliance/dpa
What will follow the 9-euro ticket?
Maintaining the 9-euro fare seems unrealistic at the moment. A majority of Germans would like to see a service that applies to all tariff areas nationwide — and would pay more for it. Metropolitan areas such as Erfurt would then certainly continue to attract many tourists, while rural regions would probably lose out without an expansion of local public transportation.
Image: Martin Schutt/picture alliance/dpa
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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.
