Eric Monnet: “We must not make the tax increase a taboo”

Posted Sep 25, 2022, 10:00 AMUpdated Sep 25, 2022, 11:00 a.m.

The government has decided to put 45 billion euros back on the table in its tariff shield. Is this the right strategy in the face of the inflationary situation we are experiencing?

We talk about price shields, but let’s call things by their name, it’s about price controls. But price control can be of real use when it comes to dealing with inflation that comes from outside, as is the case in Europe – unlike the United States where the generous budgetary policy has also could play a role. It is very effective in the short term and we can see that it has limited inflation. But the perverse effects of a price control policy – which we had somewhat forgotten – are beginning to appear more clearly, namely that it eliminates the price signal on the energy we need for the climate transition and especially its cost very strong and growing budget.

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