German Finance Minister Lars Klingbeil, together with counterparts from Austria, Italy, Portugal and Spain, has called on the EU Commission to swiftly develop an EU-wide tax on excessive profits by energy companies. In a joint letter, they reference the 2022 solidarity contribution introduced during the energy crisis following Russia's invasion of Ukraine, proposing a similar instrument amid current market distortions from the Iran war.
In a letter to the EU Commission, obtained by Reuters, the finance and economy ministers from Germany, Austria, Italy, Portugal and Spain are pushing for an EU-wide levy on excess crisis-driven profits by energy companies, including oil firms.
"Given the current market distortions and fiscal constraints, the European Commission should swiftly develop a similar EU-wide levy instrument based on a solid legal foundation," the letter states, explicitly referencing the solidarity contribution from the 2022 energy crisis triggered by Russia's war in Ukraine. That temporary 33 percent levy on fossil fuel trading profits yielded Germany about two billion euros.
The demand responds to soaring oil prices due to the Iran war and the blockade of the Strait of Hormuz, through which one fifth of global oil passes. Oil companies are accused of quickly passing on price hikes to consumers while delaying reductions as markets ease. In Germany, fuel prices have risen more sharply than in neighboring countries.
An EU-wide solution would demonstrate European unity to citizens and businesses, fairly distribute the burden, and help finance consumer relief, the ministers argue.
The letter heightens debate in Germany's federal government. While SPD's Klingbeil supports such taxes, Chancellor Friedrich Merz and Economy Minister Katherina Reiche highlight legal concerns. France's Finance Minister Roland Lescure has also called for a probe into the refinery sector. Greenpeace claims companies made over 80 million euros in daily profits in the war's first three weeks, a figure disputed by firms.
