Gabriel Felbermayr, Austria’s new economics secretary, says that he is not ruling out upper limits for gasoline prices at pumps. He explained to the “Frankfurter Allgemeine Zeitung” that the government could intervene at a certain price point, ideally in an internationally coordinated fashion by releasing strategic reserves. “These limits shouldn’t be set too low” he added.
The economist warned that a full‑blown energy‑price crisis could emerge if the Middle‑East conflict drags on or the Strait of Hormuz is permanently closed for shipping. While this is not yet the case, he cautioned that a month’s continuation would threaten both growth and inflation. “A doubling of oil prices could cost Germany roughly 0.4 percentage points in output” he noted, saying that higher energy costs are especially damaging given Germany’s fragile recovery.
Felbermayr also highlighted the geopolitical implications of the Iran war. He said it reveals China’s vulnerability: both Iran and Venezuela were part of a larger Chinese geopolitical strategy, yet neither China nor Russia appears able to assist Iran, exposing China’s weakness in this scenario. He added that the high energy price burden hurts China more than it does the United States.
In light of the clash between the United States and China, Felbermayr advised Germany and Europe to avoid taking an economic side. “We cannot abandon trade with either the United States or China. Choosing one side would be devastating for us” he asserted.
The federal cabinet approved Felbermayr’s appointment to the Expert Council for assessing the overall economic development on Wednesday. The council’s members are colloquially called “Wirtschaftsweise”; Felbermayr will replace Ulrike Malmendier, whose contract was not renewed at the European Union’s request.