Germany’s finance minister, Lars Klingbeil, joined several EU counterparts in urging a tax on windfall profits being earned by energy companies amid the war involving Iran.
News agencies reported that the finance ministers of Germany, Austria, Italy, Portugal and Spain sent a letter to EU Climate Commissioner Wopke Hoekstra calling for swift action.
The appeal comes as fuel prices surged after Iran closed the Strait of Hormuz in retaliation for US and Israeli strikes. Diesel prices in Germany hit a new record as the Easter weekend began: the daily average for a liter of diesel reached €2.391 ($2.75 per liter — $10.45 per gallon) on Friday, according to ADAC. On Thursday, diesel had already topped the previous record at €2.346.
What did the EU finance ministers say in their letter?
The ministers said an EU-wide windfall tax would “send a clear message that those who profit from the consequences of the war must do their part to ease the burden on the general public.” They added it would show unity and willingness to act, allowing financing of temporary relief—especially for consumers—and help curb rising inflation without increasing public deficits.
They pointed to emergency measures introduced during the 2022 energy crisis after Russia’s invasion of Ukraine, including a windfall tax then. “Given the current market distortions and fiscal constraints, the European Commission should swiftly develop a similar EU-wide contribution instrument grounded on a solid legal basis,” they wrote.
What might EU measures against the fuel crisis look like?
Measures in 2022 combined a windfall profit tax, a gas price cap and demand-reduction targets. EU Energy Commissioner Dan Jorgensen has said the bloc is considering similar steps again.
Despite large expansions in renewable capacity, the EU still relies heavily on imported fossil fuels. Increased imports from the Gulf partly offset reduced Russian supplies, but prices are rising even in countries less dependent on fuels transiting the Strait of Hormuz. Since late February, European gas prices have jumped—by over 70% in some measures—making affordable energy a top priority for policymakers.
Edited by: Sean Sinico