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General threat hangs over the traditional political parties in Germany on the eve of general elections this year. This threat does not come from immigration or populism, but from inflation and low interest rates, oppressed by the monetary policy of the European Central Bank (ECB). The Germans long criticize of the ECB’s monetary policy. The stated objective for the growth of inflation to 2% benefit only a profligate southern European countries. They can borrow more at lower interest rates and inflation reduces the real value of their debts.

In the second quarter of 2016, Greece, Portugal, France, Belgium and Italy have increased their debt to GDP. This has led to growth and total debt of Eurozone countries by 204 billion EUR on year-on-year basis. Meanwhile, the Northern European countries, like Germany, the Netherlands, Ireland and Finland were among the countries that reduce their debts.

The higher inflation would melt part of the funds of savers, which is the core of the middle class in Germany. Overall the German households save nearly 17% of their current income, one of the highest rates among developed countries. They hold about 40% of their savings in bank deposits, and the rest in life insurance accounts that are then used at retirement.

The interest rates on savings accounts are currently about 1% in Germany and insurance rates are slightly higher, but the trend is to continue to fall.

In December, the inflation in Germany jumped to 1.7% over the same period last year, compared to 1.1% for the whole Eurozone. The expectations are this year inflation in European largest economy to reach 1.6% against 0.4% for the whole 2016. This practically means a negative interest rate for savers and they will lose money. This further worsens the prospects of the main political parties against the rise of populist Alternative for Germany. The party emerged third in the country, according to data from recent polls, and certainly will use monetary policy to their advantage.

The situation pushed German savers to alternative investments, such as real estate. This leads to strong growth in house prices. Although, according to the Organization for Economic Cooperation and Development (OECD), the properties in Germany are still undervalued compared to income in the country and the share of owners is the lowest in Europe (around 53%).

For the moment, nobody talks about housing bubble in Germany, but prices in major cities recorded growth rates of over 10% annually. While the conservative banks accept difficult current market prices and finance increasingly smaller share of the value of transactions at purchase. This makes it difficult for buyers to take advantage of lower interest rates.

The rents are also rising fast, especially in larger cities and most desirable areas, which restricts the population with medium and low incomes. This puts further pressure on the parties and Chancellor Angela Merkel recently said that people have never lived so well. Those who have money to buy housing in Berlin, Frankfurt or Munich are a minority. The politicians find it difficult to explain the situation to people.

The Germans tolerated ECB monetary policy until inflation was low. At the moment they began to lose money, they started the guilty games in Germany and a large part of the population turned against the European project. The ECB can not afford to lose the confidence of Germany.

So far the demands of Germany are ECB to consider increasing interest rates, but their were not heard. The Chairman of the bank Mario Draghi argues that Germany has gained over monetary policy than it has lost. However, this argument no longer passes in front of the middle class voters in the country. The Germans actually reduce indebtedness and do not abandon their old habits in favor of more adventurous investments, such as financial instruments.