Germany’s Christmas Markets Under Economic Pressure: What’s Changed?

① A Changed Winter Landscape in Germany

Europe’s Christmas markets are incredibly famous. Germany, in particular, is renowned as the birthplace of Christmas markets. These markets boast a rich history that spans over 600 years, and they are celebrated for their long-lasting traditions and impressive scale. The Dresden Striezel Market, which commenced in 1434, is the world’s oldest and largest Christmas market.

As Christmas draws near, Germany hosts more than 150 festivals nationwide. The end-of-year atmosphere is palpable, from the dazzling lights and large trees to the Christmas carols echoing everywhere.

Many handcrafted goods can be found in the extensive array of shops. Visitors can also enjoy a variety of foods, such as Erfurt Stollen, gingerbread, Bratwurst, and Glühwein, which are symbols of Christmas.

In Germany, the Christmas atmosphere is always in full swing from the end of November. However, this year’s Christmas landscape in Germany has changed compared to previous years. The streets, expected to be adorned with numerous light decorations, are less dazzling than the last year.

Despite the official activation of Christmas lights in Berlin’s shopping districts, their numbers have dwindled due to financial limitations. These lights were funded by approximately $118,000 in government subsidies and $3.9 million contributed by corporations and Berlin citizens. Streets that should have been brilliantly illuminated by these lights now only have strings of lights hanging, struggling to emit their full brilliance.

Light installation experienced delays this year, and the number of installation sites has diminished due to difficulties securing sponsors. Due to budget limitations, cherished Christmas sculptures like nutcracker dolls, typically displayed in the square during the holiday season, have been omitted again.

② Lack of Christmas Budget

Germany is currently facing an unprecedented budget crisis. The German Federal Constitutional Court ruled that this year’s and next year’s German government budgets are unconstitutional and therefore invalid. The issue was the special budget that the government used to evade the national debt brake.

The government submitted this year’s and next year’s budget plans, allocating a €600 billion COVID-19 response budget to the climate crisis response budget. The budget’s failure to comply with debt limit measures has set back the government’s climate change response initiatives, which is expected to have repercussions on the German economy.

Germany’s economy has suffered over the past three years due to the pandemic and the surge in energy prices caused by Russia’s invasion of Ukraine. The government had planned to overcome the economic crisis by actively investing in climate crisis response projects. In this scenario, the impact on regular households is expected to be substantial.

Subsidies for electricity, gas, and transportation are expected to be immediately affected, with the possibility of reductions or cutbacks in social welfare benefits. The burden on citizens is even greater, especially with the sharp price rise.

The upcoming Christmas season is also facing the effects of these changes. In addition to reducing the street lights, there has also been a reduction in the hours for Christmas lighting.

Local German media reported that the Christmas market in Regensburg began without music. The German Music Copyright Association has significantly increased its usage fees after improving its fee calculation method. The price of food sold at the German Christmas market has risen dramatically. Fries, previously priced at €3, have now surged to €6, while wine, which used to cost €3-4, has also risen to €6.

According to a recent German Trade Association (HDE) survey, more than 350 retailers reported a drop in sales during Christmas week. They said the number of visitors decreased compared to the previous year.

③ Energy-Dependent Germany

Europe has seen a dramatic increase in energy weaponization due to Russia’s invasion of Ukraine, with prices soaring to 11 times the pre-war level. Germany is one of the countries with a high dependency on foreign energy, importing 90% of its gas, crude oil, and coal from abroad.

Before Russia invaded Ukraine in 2020, 55.2% of Germany’s total gas imports were from Russia. However, Germany’s electricity prices rose 85% a year after the war. German companies suffered a huge blow, and the German chemical industry even faced a production halt.

Germany has taken measures such as turning off the lights at famous night view spots to save energy.
The energy problem has significantly impacted Germany’s famously vibrant Christmas.

Meanwhile, in the last quarter (July-September), Germany experienced a -0.1% decline in its economic growth rate compared to the previous quarter. Once hailed as a manufacturing powerhouse, Germany is struggling with high unemployment rates and low economic growth.

By. Min Jae Kim