High gas prices have become a major burden for many companies. Quick help is needed.
(Photo: dpa)
If subsidies and aid are granted on a large scale, deadweight effects can hardly be avoided. The gas price brake, which is intended to relieve private individuals and companies from January, will also benefit companies that are still earning well despite the drastic price increase.
Politicians and economists are therefore already demanding that companies, in return, have to refrain from paying bonuses to their employees and paying dividends to the owners. The Gas Commission also discussed the subject controversially, but refrained from making a corresponding recommendation in its final report.
That is sensible. For four reasons.
- First, a quick decision on the matter is most important. The question of bonuses and dividends should not delay the recommendation of the commission, which included representatives of associations, trade unions, science and the Bundestag – and the governing coalition should not fight the issue either. The increase in gas prices has been so dramatic that many companies are actually struggling to survive. There is great urgency.
- Second, of the 25,000 companies that can take advantage of the aid, only a very small proportion are likely to make good profits despite the high costs.
- Thirdly, with bonus payments, employees not only participate in profit development, but are also rewarded for achieving personal goals.
- Fourth, the effort involved in checking the appropriateness of bonus payments and dividends would simply be too great.
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Site security is an appropriate requirement
Instead, the Gas Commission has agreed on a condition that is appropriate. Anyone who takes advantage of the help must ensure that they will receive the location. That’s exactly what the debate is about, ensuring the competitiveness of German industry despite the dramatic rise in energy prices.
Difficult times require quick and pragmatic solutions. This was achieved with the gas price brake. It should not be overloaded with ideological debates about profits, bonuses or dividends.
On the other hand, the moral appeal to the managers to deal responsibly with the large-scale aid granted is permitted. Every manager, every entrepreneur has to decide for himself whether and to what extent bonuses and dividends are appropriate – and whether a company really has to take advantage of the aid that has been granted. Deadweight effects cannot be ruled out – but they can also be rejected by those affected themselves.
More: Relief from the gas price brake must be taxed