Lindner “distributed upwards”
Economists don’t believe in tank rebates
03/17/2022, 06:37 am
With a subsidy for every liter filled up, Finance Minister Lindner wants to relieve the burden on the journey to the gas station. However, such discounts primarily help high earners, “because they own more cars,” notes Grimm. IFO boss Fuest also speaks of an upward redistribution.
Leading economists have criticized Federal Finance Minister Christian Lindner’s planned fuel subsidy to relieve motorists of high fuel prices. “Relief shouldn’t come with a watering can, but in a targeted manner. That’s why I don’t think that the tank discount is the right instrument,” says Clemens Fuest, President of the Munich IFO Institute, in the “Rheinische Post”.
Even the “economy” Veronika Grimm has nothing left for the suggestion. “The discussion about fuel discounts is completely out of date,” says the member of the German government’s Economic Advisory Council. “We have to relieve the lower and middle incomes. But fuel discounts relieve high earners more because they own more cars and drive longer distances.”
IFO boss Fuest makes the same argument. “High-income households have a particularly high proportion of spending on gasoline, so the decrease in gasoline prices tends to be a bottom-up redistribution,” he says. Accordingly, targeted aid for long-distance commuters or heating cost subsidies for people on low incomes, as already decided by the federal government, are better suited to cushion the high energy costs.
“Contradicts climate protection”
Farming Grimm is against tank discounts for another reason. They discounted fossil fuels, she says. “This thwarts climate protection and massively intensifies the challenges in the event of a possible supply stop of Russian gas. We need the dampening effect of high prices on demand so that we don’t face even greater challenges than we already do in the event of a shortage of fossil fuels.”
Relief must be targeted, Grimm demands. “It would be conceivable to have energy money that the recipient would have to declare as income. Then it would be repaid to a larger extent by those receiving high incomes. Energy efficiency programs could also help.”
Lindner had brought the temporary state tank subsidy into play. He wants to reduce the fuel price to under two euros per liter of diesel or petrol. The concrete design is open. On the other hand, he considers the energy money demanded by the Greens to be unsuitable.