An the face of rising energy costs, many economists advocate taking the pressure off households. However, a majority of German economics professors reject a price cap for electricity and gas and instead rely on energy funds as transfer payments.
This is the result of the new economist panel of the Munich Ifo Institute and the FAZ. This time, 178 economics professors from German universities took part in the regular survey, although not all participants answered every question.
The economists surveyed attach importance to the fact that aid should primarily be given to poor households and not to everyone. 83 percent are in favor of further relief for households from the high energy costs. 68 percent of these supporters are in favor of payments in the form of energy money and only 14 percent for an electricity and gas price cap. A cap is to be understood as state intervention through which prices may not exceed a certain value.
For the Kieler Till Requate, it can only be a flat-rate relief, which is less expensive. “An electricity and gas price cap would be the worst thing you could do now,” he wrote in the free comment field of the survey. Martin Biewen from Tübingen demanded that prices as indicators of scarcity should not be interfered with. Instead, households and businesses in need should receive lump sum transfers.
Nuclear power plants should run longer
A week ago, the federal government announced a “defense shield” to support consumers and companies because of rising energy prices. A commission for gas and heat with economists and representatives of companies and trade unions is to quickly present recommendations for the design of the gas price brake. The SPD co-chairman Lars Klingbeil announces their proposals after the state elections in Lower Saxony on Sunday. “Everyone now wants something to happen immediately, I want that too, but I trust the experts who will then present a clever model next Monday,” said Klingbeil on Thursday on ZDF. The measure will “really push the prices down massively”.
In addition to relief for households, the participants in the panel of economists propose a continuation of nuclear power. In order to expand the electricity and gas supply in Germany, 81 percent of those surveyed support the continued operation of the three remaining nuclear power plants beyond 2022.
steering effect of high prices
More than two-thirds are in favor of removing regulations that make it more difficult to expand renewable energies, building more liquid gas ports and expanding the transmission grid for electricity. “The supply of electricity must be expanded and demand reduced,” said Ifo researcher Niklas Potrafke, who was involved in the survey. “Demand will not fall due to price caps on energy. Rather, the steering effect of high prices should be retained and needy households and companies should be helped with targeted payments.”
Around two-thirds are in favor of creating savings incentives for households and businesses. Silke Übelmesser from Jena wrote: “Whatever the concrete form of the measures, they should address the distribution policy consequences as specifically as possible and not distort the relative prices, which are important scarcity signals.”
Harald Fadinger from Mannheim advises on the one hand to relieve households with low incomes and energy-intensive companies through transfers, but on the other hand not to cap prices in order to provide savings incentives. He is also in favor of siphoning off energy companies’ profits to finance the transfers. “Instead, price caps and debt financing are coming,” he wrote.
At 54 percent, a narrow majority is in favor of further relief for companies. Approval here is lower than for household aid. The professors are divided on whether there should be an excess profits tax or a random profits tax for producers of renewable energy, nuclear and coal power: 46 percent support the project and 43 percent oppose it.
Those surveyed clearly name the economic difficulties: 94 percent expect that Germany will slide into a recession as a result of the energy price crisis. 33 percent even expect power cuts and rationing of electricity and gas in winter. On the other hand, 47 percent do not expect any shortfalls or rationing.