Because of high inflation
DGB boss wants extreme corporate profits to be skimmed off
07/28/2023 10:28 am
Germany’s trade unions see the economy out of balance: some companies are increasing their profits – other companies are suffering from high energy costs. Politicians must intervene here, demands DGB boss Yasmin Fahimi.
In view of the high inflation, Germany’s trade unions are demanding a skimming off of extreme profits and a significant dampening of energy prices. “We also have profit-driven inflation,” said DGB boss Yasmin Fahimi. “Politicians have to start here by skimming off excess profits and at the same time capping energy prices that make products unnecessarily expensive.” Because the high inflation rate is also due to the extremely high energy prices.
Fahimi pointed to a very different situation in the sectors. “Many energy-intensive companies are getting into trouble because of the much too high energy prices in Germany, which cannot stand up to international competition.” This also applies to many medium-sized companies.
“Inflation will continue to be fueled”
“At the same time, there are extremely rising corporate profits in some sectors, which are further driving inflation,” said Fahimi. “Prices will be significantly increased there beyond the cost increase.” Such conspicuous price and profit developments are particularly evident in agriculture, construction, retail, hospitality and transport. They accounted for up to 45 percent of the local inflation rate.
At the end of June, the levy on so-called random profits introduced by certain electricity producers during the energy crisis in December expired. Such random profits are significantly higher than the expected profits of the company. When it comes to energy prices, Federal Economics Minister Robert Habeck from the Greens recently campaigned for an extension of the electricity and gas price brakes until Easter 2024. According to the current status, the energy price brakes would expire at the end of the year.
Fahimi continued to warn of a slump in industrial production. “It will not be possible to produce batteries, chips, photovoltaics and wind turbines in Germany in the long term and successfully without having the corresponding preliminary products such as plastics, steel, copper, glass and aluminum in stock,” said the DGB boss.
“These are energy-intensive industries that are suffering extremely from today’s non-competitive energy prices in this country.” Fahimi therefore called for Habeck’s proposal for an industrial electricity price to be implemented. “In order for these industries to have a chance and a future in our country, the excessively high energy prices must be curbed, at least for a transitional period,” she said. It will take at least another five to seven years before the expansion of renewable energy is implemented and more moderate energy prices are ensured again.
“That’s how long we need a bridge solution in the form of an industrial electricity price for energy-intensive industries,” said Fahimi. “In return, companies should be obliged to remain loyal to their location, to work under collective agreements and to invest in climate-neutral transformation.” The entire coalition must commit to this path. The FDP rejects a state-subsidized industrial electricity price.