Germany’s three-month experiment with ultra-cheap public transport leaves many consumers wanting more.
The 9 euro ($9.20) monthly ticket allows travel anywhere on regional trains, trams and buses, an effort to help tackle a cost of living crisis and reduce the car use as energy prices soar. It has proven hugely popular, with train journeys over 30 kilometers up 42% from 2019. Train journeys to rural tourist hotspots in Germany have nearly doubled.
The deeply discounted tickets expire at the end of August and some politicians want them to be extended in some form. In a Kantar poll last month, nearly 80% of respondents backed the idea.
But the man in charge of the country’s finances is reluctant. Christian Lindner sparked an uproar on Twitter last week when he criticized citizens’ “free mentality” and argued that such a subsidy cannot be funded in a long-term sustainable way. The 3-month supply cost the government around 2.5 billion euros.
However, this helped to limit inflation. The German Economic Institute in Cologne estimates that overall price growth would have been about 2 percentage points higher in June if government-administered costs had more closely reflected overall price increases. The provision of public transport has considerably reduced these costs.
“It clearly had disinflationary effects. However, it is worth considering whether this money cannot be spent more efficiently if it is to alleviate the burden of inflation for low-income households, which could benefit more from direct transfers,” said Melinda Fremerey, the institute’s study author. “Politicians will have to consider whether the tool is to pursue climate policy or to fight inflation.”
Some holiday destinations in Germany seem to have benefited from an increase in the number of foreign visitors since the introduction of the 9 euro note. The Baltic Sea port of Stralsund saw a 43% increase in card transactions month-on-month in July, compared to a 36% increase the previous year, according to data from payment provider Sumup.
Recently, there has also been intense debate about its effect on travel habits. Lindner, who is of the pro-business FDP party, pointed out that this was mainly leading to additional leisure travel, with very little reduction in regular car trips, such as commuting. This suggests that transport systems have come under more pressure due to the discount.
A study in Munich found that only 3% of city residents used their cars less after the introduction of the ticket, while more than a third said they increased their use of public transport. However, the researchers noted that 22% were taking the train and bus for the first time, which may encourage them to use these options more in the future.
Proponents of the measure argued that the increase in leisure travel was an obvious result because of the summer schedule.
Lindner’s Green and Social Democrat coalition partners are pushing to introduce a successor to the ticket after the end of August.
One of the main reasons for the expansion of supply in one form or another is that Germany, like many countries, has not yet weathered the worst of the inflationary spurt. As winter approaches, people will spend more on heating their homes, and further cuts in Russian gas supplies could drive up home energy costs even further.
German Transport Minister Volker Wissing, a member of Lindner’s FDP, also wants the measure extended.
“With this ticket, we managed to have 20% more passengers without changing anything in the service,” he told Goslar on Thursday. “People change their consciousness and change their behavior, and that’s why we need to change not only in terms of regulation but also in terms of thinking in practice and in terms of having the courage to initiate disruptive change processes. .”
The government has two main options: Extend the ticket as it is or wait for a modified version for a while, because it would be too late for transport companies to issue an alternative pass for September.
But Lindner favors policies that directly increase disposable income, such as adjusting tax brackets to account for inflation. This could provide wider relief in a country where only a third of the population is regularly served by bus and train options.
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