According to economist Isabella Weber, Germany faces profound economic difficulties due to the crisis involving Iran. Speaking to Spiegel, the academic who teaches at the University of Massachusetts Amherst warned, “We could quickly reach inflation rates of four to five percent, so it could get much more painful”. She noted that prices for certain goods, such as plastics and their raw materials, have already risen significantly, adding that the entire economy will feel the impact swiftly. “The price shock will move through the whole economy. And prices are rising now much faster than they will fall later”.
Weber indicated that the severity of the situation will depend not only on the duration of the conflict and corporate markups but also on how strongly and quickly policymakers intervene. She urged the government to act now, suggesting measures like implementing a smart price cap on gasoline. “The longer we wait, the more the price shock seeps through the system” said Weber, who gained recognition for co-developing the gas price cap during the 2022/23 energy crisis. She observed, “Since the seventies, we have stopped thinking about the physical scarcity of oil. In a situation like this, every measure must be taken”.
While Weber views the Bundestag’s mandate for oil companies to justify price increases-passed alongside a “once-a-day” rule-as a step in the right direction, she cautioned that patent law cases could drag on for years and are “no substitute for price caps, which can immediately remove uncertainty from the market during a crisis”.
Furthermore, Weber demanded that a portion of corporate profits made during this crisis be collected immediately through a “super-profit tax”. She stated, “The worst times for humanity should not be the best for the economy-especially in sectors that belong to critical infrastructure”.