Published by Global Banking & Finance Review®
Posted on March 25, 2026
2 min readLast updated: March 25, 2026
Add as preferred source on GoogleChancellor Friedrich Merz warns that Germany’s public finances alone cannot shield the population from energy price surges triggered by the Iran war, and that ending the conflict remains the most effective remedy.
BERLIN, March 25 (Reuters) - German Chancellor Friedrich Merz said on Wednesday public finances could not make up for the shock to energy prices caused by the war in Iran, and that the best way to control prices would be to end the fighting.
Answering questions in parliament, he said there were "measures we can consider" to ease the strain but that "we cannot offset every price trend through tax measures or measures funded from the federal budget".
"The best way to bring prices back under control is to end the war in Iran," he said.
Like other countries, Germany has seen fuel prices soar since the start of the war, with critics accusing oil companies of using the crisis for price gouging.
Merz said he was sceptical about calls for a tax on "excess earnings" of oil companies from his coalition partners in the centre-left Social Democrats, saying the term was practically impossible to define legally.
He said Germany was working with European partners to persuade the U.S. and Israel to find a diplomatic solution to the war, which has largely closed the vital Strait of Hormuz to shipping, sending energy prices soaring worldwide.
"However, this requires a willingness on all sides, including Iran's, which is clearly not evident at the moment," he said.
Germany would be willing to join international efforts to stabilise the region once the hostilities end, but this would require a mandate from the United Nations, he added.
(Reporting by Miranda Murray and James Mackenzie, Editing by Madeline Chambers and Jan Harvey)
Chancellor Merz explained that public finances and tax measures cannot make up for every price trend caused by the war.
The surge is due to the war in Iran, which has disrupted oil shipping through the Strait of Hormuz.
Merz expressed skepticism, citing legal difficulties in defining 'excess earnings' for taxation.
He believes that ending the war in Iran is the best way to bring prices under control.
Germany is working with European partners to persuade the US and Israel to find a diplomatic solution, and would join international efforts to stabilize the region after hostilities end.
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