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According to ZEW President Achim Wambach, consumers and companies in Germany will have to prepare for comparatively high energy prices in the future.
© Patrick Pleul/dpa
ZEW President Wambach expects energy prices to continue to be high.
In addition, the traffic light bears joint responsibility for companies' reticent investments.
Frankfurt/Main – According to Achim Wambach, President of the Leibniz Center for European Economic Research (ZEW), consumers and companies in Germany will have to prepare for comparatively high energy prices in the future.
“Energy will never be really cheap again.
We have less wind and less sun than many other countries,” said Wambach in an interview with the news agencies
Deutsche Presse-Agentur (dpa)
and
dpa-AFX
.
The consequences would particularly be felt by the energy-intensive sectors of the German economy.
Economist expects high energy prices – and criticizes traffic lights
“The labor market is starting to react,” said the economist.
The chemical giant BASF, for example, wants to tighten its austerity measures and cut more jobs at its main plant in Ludwigshafen.
“The big political task will be to achieve the necessary transformation towards climate neutrality without significant jobs being relocated abroad and unemployment increasing,” said Wambach.
From the perspective of the President of the Economic Research Institute, Germany is currently burdened by the highest corporate taxes in an international comparison, costs for bureaucracy, inadequate digitalization and the resulting reluctance of companies to invest.
Disputes within the traffic light coalition caused uncertainty among companies and they held back on investments.
“High uncertainty is a problem.
A common will from the government is important and there is currently uncertainty,” said Wambach.
The cuts to the Growth Opportunities Act and its blockage in the Federal Council are also not a good signal.
Germany's way out of the economic crisis?
Inflation is well on its way
The CDU and CSU only want to agree to the package with tax relief and reductions in bureaucracy if the traffic light coalition withdraws the already decided reduction in tax relief for agricultural diesel for farmers.
In the mediation process between the Bundestag and the Bundesrat, the volume of relief had already been reduced from the previously planned seven billion euros annually to 3.2 billion euros because the package led to a loss of income for the states.
“We have to strengthen investments and need consistent structural reforms,” warned Wambach.
“In addition, the European internal market must be further expanded.” The economist, on the other hand, sees inflation on a “good path.” Together with higher wages, this should strengthen private consumption, which is an important pillar of the German economy.
Inflation has been trending downward for some time.
In January, consumer prices were 2.9 percent higher than in the same month last year.
After the Russian attack on Ukraine in February 2022, energy and food prices in particular rose sharply.
The inflation rate in Germany climbed to 8.8 percent in autumn 2022.
(bohy/dpa)