Why is everything more expensive in Germany?

Question

I am moving to America from Germany next year and I am very excited. I visited there for one year as student and love everything about America! Everything is big and there is much more opportunity to get job and make much money. It is unbelievable how much cheaper things are in America. Petrol costs $2.58 USD per gallon but here in Germany it costs roundabout $7.18 USD per gallon! Also milk costs $2.99 USD per gallon in America but $5.60 USD per gallon here! I found one computer of the same model everything the same here in Germany it cost $2 200 USD but in America only $1 050 USD and a full DVD sound system from BOSE cost $3 480 USD in Germany and only $1 199 USD! That is no mistake. Hello? And people are more happy in America and friendly! Everyone in stores say sorry when we have accident but not in Germany. Naja. So why is this so? Why does everything cost so much more here in Europa. France it is even worser. Before I came to America I only heard how good it is but now I know!

Answer 1

Yes you are right. In Germany is everything expensive. Also the Taxes, everything you are buying  7% and 19% taxes. Renting place, utilities and food are unbelivable. Right now all the milk products and meat prices higher again.

About the high prices of energy that's crazy. Having car in Germany is nightmare, you are paying taxes and insurance this killing people also. But they are earning more than in US.

Answer 2

There is a saying here in the USA:  "The grass is always greener on the other side" meaning it all looks pretty good when you visit, but reality shows you that not everything is cheaper in the US or is friendlier in the US.

To rent a good place is more expensive (at least in my area where i live), groceries are more expensive that is true, taxes can be insane in some states....

Just stay realistic! But anyway..you will love to live here. I do.

But I also love to go back to Germany and shop & buy like a maniac when I go there....

Answer 3

1) Because of the exchange rate. In the USA you get roughly the same for 1 USD as you get here for 1 EUR. Currently the exchange rate is 1,40 USD to 1 EUR so shopping in the US is cheap.

2) Cost of gas: the difference is made by taxation. Gas is heavily taxed in Europe, unlike in the US. Over 60 % of what you pay at the gas station in Europe is taxes. (Oekosteuer!) People in the US are only now waking up to the fact that energy does indeed cost money, something which Europe realised during the Oil crisis in the 70's.

3) The cost of gas affects consumer products prices'. Everything has to be transported somehow and lots of it is done by road. The higher the cost of gas, the higher the cost of transportation which finally results in higher prices.

4) Cost of milk: ever heard of "Milchquote"?

5) That BOSE sound system: BOSE is a German brand, they are well-known here and thus can ask higher prices. In the US they need to sell under the real value in order to have any business at all.

Answer 4

As a native German, I feel obliged to post this confirmation vote for t_maia. I have nothing to add to that; the arguements are very profound and true.

Answer 5

Supply and demand, trade agreements, and Government interference. It is also the volume of trade involved in the USA. Kind of the reason why Walmart can afford to sell at lower prices. Economy of scales.

Answer 6

The short form answer:

1-- America has economies of scale. Germany is not even close to what America needs and produces.

2-- America is the only true free economy in the world. Germany has enormous amounts of government interference.

3-- Taxes. Everything in Germany is taxed to death. A pair of Puma sneakers costs $110 Euros. The same pair can be attained for $65 USD. Even if the exchange rate was at parity (which it should given economics) and 1 EUR = 1 USD, the tax amounts to more than 50%.

4-- Taxes. Gas and oil are taxed to astronomical figures and everything requires gas- from tansport to plastic.

5-- Tarrifs. The German govenment is affraid other countries will take away business so imports are taxed to death as well. And unlike what others have said- there is NO LONGER FREE EDUCATION IN GERMANY, NO LONGER FREE HEALTHCARE, THERE ARE NO LONGER ANY GOOD SOCIAL SERVICES and some roads and bridges are being tolled to raise money as the infrastructure is old-- the east is even worse- need I say more?

6-- Money needed to rebuild the East. Over 1 Trillions dollars have been poured into the east to rebuild yet it remains decades behind and unemployment is over 14%.

7-- Poverty combatation.

8--Taxes. Taxes and more Taxes. Have they ever heard of the Boston Tea Party?

Well you are not the only one trying to enter the US. Over 10,000,000 people per year apply for a green card, 45,000,000 apply for visas yearly and untold millions (estimated 20 mil ) yearly risk their lives to come in illegally.

May you become rich and live a great life as most hard working Americans do. Remember--The sky is the limit. This is the land of unlimited opportunity. Welcome to America and God Bless.

Answer 7

Da du ja Deutscher bist, kann ich ja genauso gut auf Deutsch antworten.

Die meisten Punkte wurden ja schon beantwortet (Steuern, Höhere Transportkosten, Wechselkurse, etc.)

Aber der Punkt das Bose eine Deutsche Firma ist, ist schlicht falsch !! Bose ist ein amerikanisches Unternehmen. Das beantwortet leider nicht den Preisunterschied. Ich kann es mir nur so erklären das Bose hier in Deutschland vielleicht einen anderen Ruf hat, besonders hochwertige Produkte herzustellen, und das wird mit dem Preis untermauert.

Answer 8

There  is a lot of tax in German prices --- you don't see or do you really beliefe Hartz IV and general health insurance do cost nothing?

Greetings from Hamburg, Germany

Heinz

Answer 9

i agree to 1. answerer

Answer 10

Well, some things are cheaper in America. You are right. BUT you are also very young and I don't think you really have lived -I mean really lived- in the states yet to see that not everything is as "rosy" as you see it.

Groceries for example are way more expensive in the states than in Germany. I am talking especially about fruits and produce. Wine is way more expensive than in Germany too.

Once you will live & work in the USA for a few years you also will recognize that Germany has a lot of good sides too (and cheap sides too)

I think you won't be able to tell it now. I couldn't when I just arrived in the US a long time ago..., but now I appreciate all the good things when I go and visit in Germany!

Answer 11

For one thing the present Euro/USD exchange rate favors American made goods. Another is the high Import duties European charge and the High taxes. As mentioned in the other responses the the highly regulated European Market is not condusive to the natural checks and balances of a free trade market.

Bose by the way is an American Company, not a german one.

http://www.bose.com/controller?event=VIE...

Answer 12

As for gas and transportation costs - the US has a large, domestic oil production - which keeps costs down.

Europe and Germany have higher taxes built into the cost of everything Mehrwertsteur, Umsatzsteuer and such.

The relative strengths of the economies have an impact too - when the US economy and dollar were relatively stronger - back in 01, Europe seemed pretty cheap to me (except for gas) - that has reversed since then due, in part, to the strength of the Euro.  Back in the '80s, Japan was super expensive - but now seems much more reasonable.  When the economy is good - there is more money floating around - and the prices seem higher to people from the countries that are in a relative downturn.