Lars Feld: Fuel discount and price cap are nothing other than populist measures
The fuel discount is back - and with it the great illusion of the Germans. But the state cannot regulate away rising prices without creating new problems. A guest post.
Lars Feld, a prominent German economist, criticized the recent actions of the federal government in response to rising fuel prices as nothing more than populist measures. He argued that the government's frequent interventions in the market serve to reassure interest groups and public opinion leaders, rather than addressing the root causes of the issue.
By weakening its own credibility through repeated interference, the state becomes a pawn of those with vested interests, further fueling the narrative that governing parties "cannot handle it." Simple solutions proposed by extremists on both the right and left wings gain traction among voters due to these perceived easy answers.
The recent surge in fuel prices is attributed to the ongoing conflicts in the Middle East and Eastern Europe, exacerbated by Western sanctions against Russia, driving up the cost and scarcity of oil and gas. These higher prices are reflected in the increased cost of gasoline and diesel, prompting consumers to reduce their consumption.
Written by urgent.news from Handelsblatt's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
