Germany should implement a Ukraine “solidarity tax” to fund Kyiv’s war against Russia, a senior economist has said.
Monika Schnitzer, the chair of the state-backed German Council of Economic Experts, advocated for the policy despite the current Government having already hiked taxes as part of austerity measures.
“Special events require special measures,” she told the Rheinische Post newspaper.
“A Ukraine solidarity [tax] as a surcharge on income tax for military aid would be a possible answer to this challenge.”
She added that Russia’s actions posed a specific threat to freedom in Germany and the wider world, necessitating swift action from the country despite the current economically difficult circumstances.
“It’s not popular. But ultimately this war is also about our freedom,” Schnitzer said.
“It seems necessary to me,” the economist concluded, stating it would be better to take action against Russia now than have to resort to more extreme measures in the future.
— Brussels Signal (@brusselssignal) December 18, 2023
While support for Ukraine in parts of the West appears to have faltered in recent weeks, Germany has remained adamant that it will support the country until the end of hostilities from Russia.
Such a pledge has proven difficult amid Germany’s economic situation, with Berlin being forced to fill a €60 billion hole in its budget last month after a funding method the Government wanted to use was ruled illegal by the Federal Constitutional Court.
The centre-left coalition has since tried to help fund Ukraine’s war machine by using seized Russian assets.
Over the past few days officials have been considering €720m in frozen cash held in Germany that belongs to a single Russian firm in the hope of bolstering the federal coffers.
Speaking to the media, German Justice Minister Marco Buschmann on December 20 insisted the move would be aimed at strangling Russian war efforts rather than to bail out his own country.
“We will not allow Russian money used to finance the illegal war of aggression to lie untouched in German accounts,” he said.
— Brussels Signal (@brusselssignal) December 22, 2023