Submitted by Thomas Kolbe,
The Hormuz crisis offers us a profound insight into the real power structures in Germany. Nothing seems able to convince the Berlin monolith to partially shield its citizens from the consequences at gas stations through tax cuts.
It is now unavoidable that the Iran shock will translate into an inflation driver, working its way through economic value chains into consumer prices. These developments almost force a reduction of the tax burden on households and the middle class. It may sound strange to climate socialists, but wealth is created exclusively in the private sector, and certainly not in the state bureaucracy, which is currently profiting from the price surge at gas stations at the expense of citizens and enjoying a small special economic boost.
In March alone, the Finance Minister collected roughly half a billion euros more at gas stations. That makes him the winner of the crisis.
To dispel the impression of a secret profiteer, Klingbeil points to the generally precarious budget situation. In fact, his hands are essentially tied: the Merz-Klingbeil duo is driving the country’s public debt through the roof. Klingbeil is the skywalker among European debt makers. He has begun a catch-up race to place Germany in the top tier of debt states alongside neighboring France, Italy, and Spain. The German public debt ratio currently stands at 63 percent, but the debt spiral is accelerating. This figure will rise dramatically in the coming years.
Anybody should now be clear: The debt party of a state that burns its citizens’ capital in reckless fashion, whether in Ukraine or through the redistribution mechanism of the green transformation, must end. The state is an overfed glutton, extracting ever-higher tax revenues while sinking deeper into the debt spiral.
Yet the burden does not rest solely on debt. The state’s hyperactivity drains scarce resources from the private capital market, raises credit costs, and drives genuinely productive investments abroad. The damage has accumulated for years and is being made worse by the energy cost crisis.
One can only imagine the relief that the private sector needs to restart the prosperity engine and compensate for the ever-growing damage caused by the state bureaucracy. Germany’s plight urgently calls for reforms and an end to the failed eco-socialist transformation project.
In Germany, however, things are a little different. Economic rationality does not dominate. In the land of climate doomsayers and would-be world improvers, as former Economics Minister Robert Habeck once said, „all in“ — and all levers were set towards eco-socialism.
In fact: over 50 billion euros are pumped annually by the German state through the Climate and Transformation Fund (KTF) into the green wonder economy, which during the Hormuz crisis proved not to solve problems but rather to be their obvious cause.
The green wonder economy is leaving deep wounds in public budgets, whose deficits are spiraling out of control – in this year alone, another 180 to 190 billion euros of new debt will likely be recorded. https://www.tichyseinblick.de/daili-es-sentials/staatsverschuldung-rekord/
No one in Berlin is thinking about tax cuts anymore, regardless of how media artists around Chancellor Friedrich Merz try to pacify the public.
Even in the unlikely event of a temporary reduction in the electricity tax or an increase in the commuter allowance, the fundamental extraction mechanism remains unchanged. The CO₂ trading system drained roughly 25 billion euros from the private sector last year. This figure will continue to grow annually. There is no reason for gratitude, even if Berlin returns a few crumbs of citizens’ money here and there — robbed is robbed!
It was the economists at RWI in Essen who calculated the Finance Minister’s crisis dividend for March. They arrived at a sum of 490 million euros.
It is beyond question that the state is acting unethically in this crisis, delaying relief and exploiting citizens’ financial hardship.
The RWI’s call to suspend VAT on fuels is entirely justified, but it was coldly rejected by the Finance Minister. With his characteristic empathy, Klingbeil pointed out that citizens had made savings elsewhere due to high fuel prices. VAT revenue there had decreased, so a reduction at the pump was out of the question.
Klingbeil is instead contemplating a so-called windfall tax, in which, in the spirit of central planners, he could also make gas station operators and oil companies pay in light of their high profits in these weeks.
Budgetary planning games in Germany revolve exclusively around higher levies. Considering a projected new debt of up to 4.5 percent this year — counting the hidden funds of special assets — it is clear that the country no longer represents a healthy state.
The political aim of the Merz-Klingbeil government is the establishment of a massive state apparatus, resting on two pillars: the green artificial economy on one side and the massively expanded military sector on the other. This goes hand in hand with a growing state share, which has long exceeded 50 percent, as well as with rising public debt. The private sector bears the brunt of this, through higher levies or later via rising inflation rates.
Everything follows a clearly defined script. Only the extent of Berlin’s cynicism in the face of these policy consequences sometimes still surprises.
The Environment Minister calls for switching to electric cars amid the fuel price crisis, while the Transport Minister recommends the exhausted citizens switch to the catastrophe train.
In addition, the state-aligned media sector no longer minces words, celebrating high fuel prices as a unique opportunity to enforce the green societal transformation through citizens’ wallets.
To emphasize once again: a reduction in fuel levies is not a political quick fix. It would mark the beginning of a retreat from climate policy and a return to political reason. Energy must be affordable, and the exploitation of domestic energy sources should be central to policy. Achieving this requires a lean state, giving private industry the room for necessary investments. What we are witnessing is the systematic implementation of the opposite of this policy.
In his first year in office, Chancellor Friedrich Merz managed the feat of expanding the public service by a staggering 205,000 new employees. There is no sign of bureaucracy reduction or scaling back the state apparatus.
The economic hemorrhage of the private sector to finance the machinations of the growing hyperstate, including projects like the failed war in Donbass, is unprecedented.
In Berlin, people still believe they can successfully complete the green transformation project. What is shocking is not the ideological blindness or the intellectual modesty that comes with this policy. One should have become accustomed to that since the years of the Merkel era.
Even more striking is the ability of politicians to completely shirk responsibility despite the visible decline of both economy and society. They have succeeded in elegantly severing causality between the green planned economy and the country’s decline, systematically concealing accountability and consequences.
About the author: Thomas Kolbe, a German graduate economist, has worked as a journalist and media producer for clients from various industries and business associations. As a publicist, he focuses on economic processes and observes geopolitical events from the perspective of the capital markets. His publications follow a philosophy that focuses on the individual and their right to self-determination
Tyler Durden
Sun, 04/26/2026 – 08:10
