Looking back, the efforts of the federal government to counteract the consequences of inflation and the energy crisis resemble an economic mirage: the result is a coherent picture, which, however, dissolves with a simple change of perspective.
And after all, no one should dispute this goal. Who wants a “competition of shabbiness”, against which Finance Minister Christian Lindner recently warned in a different context?
What no one then questions in this pseudological conclusion: whether the recommended top tax increase (which is not illogical from the process, someone has to pay for the rescue policy) is not rather a symptom of a rescue policy that is fundamentally wrong and not the solution to the objectively existing one cost problem of many households and large parts of industry.
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One could dismiss this as a detail error in a coherent political concept of the traffic light coalition, which the Chancellor paraphrased with the words: “We leave nobody alone.” But on closer inspection it becomes clear that it is not a detail, but a systemic error.
The bluff of the socio-ecological market economy
The same can be said about the excess profit tax. Because an electricity price brake is intended to relieve households, the government is looking for financing options for this.
This is how she comes up with a complex excess profit tax that is supposed to take random profits from corporations and of which no politician has been able to explain in a comprehensible way to this day how it could work. In order to make these reasonably manageable, however, the expansion of renewable energies is also being choked off – because investors in wind turbines or solar parks will also have to pay the tax and are already going on investor strikes. But since the traffic light wants to expand renewable energies, the next help or exception step is already foreseeable.
It would probably have made more sense to let the market run its course in the form of higher prices. And always intervene with targeted and direct help where objectively there is really no longer enough to live and do business. Precise help instead of a watering can. Then one would not have to retrospectively and laboriously try to repair the injustices of the watering can principle.
Instead, everything is becoming more and more incomprehensible, more bureaucratic and, above all, more expensive.
>> Read also: Up to 2388 euros more – that’s what the federal government’s relief packages bring to every individual
When the traffic light formed into the “Coalition for the Future”, it wanted to achieve something big. Olaf Scholz, Robert Habeck and Christian Lindner promised at the time that an ecological and social market economy would be created. Well: There is rather little to be seen from ecological, social and market perspectives.
Instead, a monetary-driven economy of bureaucracy and clientele is emerging that intends to settle all problems with money and the state’s creative power. You can call that pragmatism, but it leads to a vicious circle in the state economy (and in some ministries to organizational and personnel burnout).
According to this logic, the state reacts to every problem with market intervention, which then requires further intervention – because the market sometimes reacts differently than you thought before. The gas price brake then requires tax increases as social compensation, the electricity price brake requires an excess profit tax, which in turn provokes support for renewable energies.
Even the ecological is damaged in the previous rescue policy.
(Photo: imago images/Jürgen Held)
Here it takes revenge that the traffic light, when proclaiming its turn to that socio-ecological market economy, divided the concept into three parts, but did not interlock them: the SPD designed the social, the Greens the ecological and the FDP the market. And because it was the liberals (why actually?) who first initiated the non-market logic of the rescue policy with the tank rebate, no one feels responsible for the market anymore.
In this way, however, the partial perspectives of the individual partners neutralize each other instead of complementing each other to form something completely new. This is particularly noticeable in times of crisis, when decisions have to be made quickly. A compass would then be more helpful than a circle of chairs in which you first have to discuss the direction.
Every intervention in the market has unforeseeable consequences
In any case, this coalition has never seriously discussed the question of whether there are instruments that intervene less in markets than the gas price brake, the excess profit tax or the mega state takeover of Uniper.
But the principle will not continue. It is already evident that every planned, bureaucratic intervention in the market provokes a consequence that no one has thought of before. This is how more and more relief packages are created that nobody understands – and nobody appreciates either, if you look at the current surveys of the three traffic light parties.
The government’s bailout policy may make life easier for a few in the short term, but more complicated and expensive for everyone in the long run.
More: Energy transition in danger – electricity industry warns of excess profit tax