“300 euros is not enough”
Economists call for an energy allowance for pensioners
04/22/2022, 11:17 am
The calls for payment of the energy flat rate to pensioners are getting louder. Top economists are now demanding this as well. In view of the rising energy prices, the relief must benefit everyone – and be increased, says DIW boss Fratzscher.
In view of the high energy prices, several economists have called for the planned relief flat rate to be extended, including to pensioners. The lump sum is “a very good instrument,” said the head of the German Institute for Economic Research (DIW), Marcel Fratzscher, of the “Rheinische Post”. “However, it should not only benefit employees, but all people.” The grant should also be “significantly increased”, Fratzscher demanded, because over the next two years “the additional energy costs for most people will exceed 300 euros many times over”.
In order to cushion the energy prices, which have risen drastically as a result of the Ukraine war, the traffic light coalition decided in March, among other things, to make a one-time payment of an energy bonus of 300 euros to all employees who are subject to income tax. According to the report, the cabinet wants to discuss this next week.
Fratzscher received support from the head of the German Economic Institute (IW), Michael Hüther. “The energy price flat rate tries to compensate for the income effect of higher energy prices without interfering with pricing,” he also told the “Rheinische Post”. The taxation leads to “reasonable distribution effects” and there is no reason to exclude pensioner households from it. Similar demands had already been made by the German Trade Union Confederation (DGB).
North Rhine-Westphalia’s Social Affairs Minister Karl-Josef Laumann also called for relief for pensioners – but not via the planned energy flat rate. This is “bureaucratic and costs a lot of money,” said the CDU politician to the “Rheinische Post”. He thinks lowering energy taxes “is the better way,” said Laumann. “This would lead to a reduction in energy prices, which are far too high in comparison to our neighboring countries.”