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Finance Minister Christian Lindner: "Full compensation is neither affordable nor makes sense from an economic point of view," says a document from the ministry
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Tobias Schwarz / AFP
The Federal Ministry of Finance (BMF) raises doubts about the usefulness and effectiveness of the three rescue packages that the federal government has launched to combat high energy prices.
"Full compensation for reduced real income by the state is neither affordable nor makes sense from an economic point of view," says a BMF document in preparation for the meeting of finance ministers from the euro zone and the EU, which is taking place this weekend.
From the German point of view, the support measures should be “as targeted as possible and geared to the needs of consumers and the economy”.
So far, however, the federal government has only partially lived up to the claims it has set itself with its three rescue packages totaling almost 100 billion euros.
It grants many measures regardless of income and need, such as the one-off energy allowance of 300 euros or a child benefit surcharge of 100 euros.
All households will also benefit from the planned reduction in VAT on gas consumption, and those with high incomes will benefit even more than average because they usually consume more gas.
The BMF paper also expressly warns that aid measures could drive up prices further.
"Particular care must be taken not to further increase the inflationary pressure through fiscal policy action," write the experts of Federal Finance Minister Christian Lindner (FDP).
Such a development occurs when, for example, gas suppliers pass on the lower VAT to their customers, who then consume more, which in turn causes prices to rise.
Lindner's experts also fear that the debt-financed rescue packages could permanently burden the budgets of the EU member states.
"Moreover, viable public finances remain essential, especially in view of the rising interest rate environment," they write.
The economic situation in the euro zone is "characterized by a high degree of uncertainty".
A risk is above all an even higher inflation. But a further weakening of the economy is also to be feared.
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