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Germany: Economist Sinn expects a loss of prosperity as a result of energy policy

The economist Hans-Werner Sinn accuses the Greens of concealing the true costs of the energy transition.

Munich - "The green side is spreading a narrative that can hardly be more wrong and is essentially dishonest. Namely, that by using green energy we would kill two birds with one stone "We are helping the climate, and it will also be cheaper than before," said the former head of the Munich Ifo Institute to the Welt (Tuesday edition). The truth is different: "By forcing more expensive energies by banning the cheaper alternatives, we will decimate the industry and have to accept massive losses in prosperity."

Measures such as the end of nuclear energy, the ban on combustion engines and the end of oil and gas heating prove that the energy transition, as Germany is pursuing it, is becoming expensive. But Germany needs cheaper energy. Sinn does not anticipate a lasting decline in inflation.

"Unfortunately, the experiences from the 1970s tell us that we have to reckon with further waves. In the future, there are forces that will build up inflation again. The gas shortage for next winter is already programmed," says the eeconomist

The price-wage-price spiral is already taking effect, as can be seen from the trade unions' conclusions and demands. "And governments will inject new inflationary debt steam into the system as inflation causes debt to fall relative to inflationary GDP." Sinn praises the European Central Bank for finally turning the corner in the fight against inflation.

But "it should have acted last year, because even then the inflation of commercial producer prices overshadowed everything we have seen in the history of the Federal Republic." The ECB will continue to raise interest rates, but it will not push long-term interest rates so far that governments stop their inflationary debt sprees. In order to get the energy crisis under control, Germany would have to "continue to operate the nuclear power plants that are still running and restart those that have already been shut down." Germany is the country where the foundations for nuclear physics were laid. Saying goodbye to this technology here is "absurd". If nuclear energy becomes dangerous, it is because others operate it with less know-how than Germany has.

Photo: dpa
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