Achim Truger, an economist, calls for a macro‑economic response to the looming price shock caused by the Gulf War. In a piece for the magazine “Surplus”, he warns that the current circumstances “pose the danger of a new world economic crisis”. He argues that Germany and the EU must now prepare a coordinated macro‑economic crisis strategy.
Truger urges the suspension of the debt brake and the introduction of price‑brakes. “Price regulation should be deployed to prevent excessive price hikes at the pump and throughout the entire value chain” he writes. He proposes reactivating intelligently designed brakes on gas, oil and electricity that preserve savings incentives and only support a basic level of consumption for households and industry. “In that situation fiscal policy would need to be ready to re‑activate the debt‑breach exception to finance such targeted, time‑limited assistance” he adds.
A coordinated effort by the state and trade‑union parties would be required to avoid a price‑wage spiral amid a strong inflation surge. Truger points to the temporary, tax‑ and social‑insurance‑free inflation‑compensation bonus used after the Ukraine price shock as a possible tool to support one‑off payments. On the EU level, he calls for measures similar to those implemented during the COVID pandemic to aid member states that lack sufficient fiscal resources. If such a bundle of measures were assembled, he argues, the European Central Bank would not need to hike rates unnecessarily, sparing the economy from further harm.
