The ever-higher interest rates are now forcing a rethink

The inflation rate fell from 10 to 8.6 percent in December. This is good for consumers in the short term, as the burden is gradually easing. However, core inflation – i.e. inflation excluding energy and food – continued to rise in December, from 5 to 5.1 percent. This is bad for consumers in the long term, but above all for the national budget.

This is because core inflation mainly captures services that are not directly dependent on energy and food prices, and it therefore shows how much inflation has eaten into the economy as a whole.

The renewed increase means that the trend is still pointing upwards and that it will take a long time for inflation rates to get back to the 2% target. However, even that will only be achieved if the European Central Bank consistently increases interest rates and leaves them at the higher level for a longer period of time.

For the finance ministers of the eurozone, however, this is an alarm signal. Because the higher interest rate level makes it more expensive to take on debt, which has become fashionable everywhere in recent years, including here.

Germany actually benefited the most from the long-standing zero interest rate policy, because the German state was even able to earn money with negative interest rates on debt. It was easy to stay in the black.

With higher interest rates, that's the end of it. It is true that they are only gradually having an impact on federal interest payments. But with the prospect that the higher interest rates are here to stay, that is exactly what will happen in the coming years. Solid financial policy will therefore be required again in the future.

But whether Finance Minister Christian Lindner (FDP) understood that is questionable. Since the beginning of the year alone, he has been calling for the solidarity surcharge to be abolished and higher tax benefits for start-ups.

You can think that's appropriate - but in the new financial world this can no longer be financed through higher debts, but savings have to be made elsewhere. However, Lindner does not make any concrete savings suggestions.

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