Economist Veronika Grimm has urged against any governmental measures aimed at lowering fuel prices. Speaking to the “Redaktionsnetzwerk Deutschland” she warned, “a tank discount should definitely be avoided”.
Grimm argues that a price cut sends the wrong signal. With a looming supply shortage, global supplies are set to fall markedly. Roughly 20 percent of worldwide oil and liquefied gas transport moves through the Strait of Hormuz, she noted. “Therefore, we must keep incentives high to curb demand; otherwise we will only deepen the crisis”.
More broadly, she opposes state intervention during crises, insisting that people need to understand that the government cannot insure against every risk.
She also cautioned that solving crises through state action at the expense of the younger generation does a disservice. The youth already carry enormous debt and are burdened by misallocated funds. The margin for further borrowing has largely been exhausted.
