Facing sharply rising energy prices, former economist Peter Bofinger calls for state intervention. “I support a fuel‑price subsidy” he told T‑Online.
Bofinger argues that this measure has been unfairly criticized. RWI data show that prices fell during the last fuel‑price subsidy in 2022 and kept dropping as long as the policy was in force. He urges politicians to reassess it “without ideological bias”.
He warns that a blockade of the Strait of Hormuz could bring serious economic consequences for Germany. “It would mean nothing good” he says. A prolonged blockade would hurt gas, gasoline, fertilizers and many other goods.
Bofinger predicts a new wave of inflation is likely. “It could happen relatively quickly” he explained. A sharp rise in energy prices would drive up the inflation rate rapidly.
Overall, he rejects the current federal government’s economic policy and calls for a more proactive industrial strategy. “Why not a five‑year plan that identifies innovative sectors where we can compete globally over the next five to ten years?” he proposes.
He doubts that Finance Minister Katrin Reiche would support such a trajectory. “She represents the exact opposite” Bofinger said. He accuses Reiche of relying too heavily on market forces rather than actively driving the economic transformation.
