Germany cuts tax revenue outlook after Iran war energy shock
Germany has sharply lowered its expected tax revenues for the next five years after its finance minister blamed the war in Iran for a global energy shock.
Lars Klingbeil said officials had cut the projected tax take for 2026 to 2030 by around €70bn, saying the downgrade showed how much the conflict was harming the German economy.
The announcement comes as Germany's coalition government is already struggling to revive growth after years of stagnation, with high energy costs and weak export demand weighing on activity.
It also adds to tensions between Berlin and Washington.
Chancellor Friedrich Merz has recently clashed with Donald Trump over comments about the conflict, and the US president has threatened to withdraw thousands of US troops from bases in Germany.
Germany has been among the European countries criticising the war launched by the US and Israel against Iran on 28 February, which has raised fears of a wider economic downturn.
Merz has tried to ease strains in trans-Atlantic ties, visiting the White House twice in a year, but he has also said there is a deep divide between Europe and the United States.
What remains unclear is how far the tax downgrade will affect Germany's budget planning in the coming years, and whether the energy shock linked to the war will deepen the country's economic slowdown.
