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German coalition weighs steps such as windfall tax to tackle surging energy costs

High-voltage power lines and electricity pylons are pictured close to the motorway A24 near Luettow-Valluhn, Germany January 31, 2025.
High-voltage power lines and electricity pylons are pictured close to the motorway A24 near Luettow-Valluhn, Germany January 31, 2025. Photo : REUTERS/Annegret Hilse/Files

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A working group in Germany's ruling coalition has asked the government to consider additional measures such as a windfall tax and price caps in order to cushion Germans from a price surge due ⁠to the Iran war, lawmakers said on Friday.

The group of conservative and centre-left lawmakers also suggested lowering electricity costs for households, cuts to energy tax and bringing coal power stations back online.

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"There is no supply problem, but a price problem," said ⁠Armand Zorn from the centre-left Social Democrats.

The additional measures are based on a scenario of the war dragging out and the ⁠Strait of Hormuz remaining shut to most shipping for an extended period.

Iran has effectively blocked ⁠the Strait of Hormuz, which carries about 20 per cent of global oil and liquefied ⁠natural gas, driving up energy prices and roiling financial markets.

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