- As nations try to protect their citizens from harsh winters, Europe’s energy crisis could cost them 500 billion euros.
- According to the think-tank Bruegel 314 billion euros are being spent by EU governments, while the UK has earmarked 178 million euros.
- Germany has allocated 100.2 million euros, France 53.6billion euros and Italy 59.2billion euros.
According to Bruegel’s think tank, Europe is in danger of running out of energy, which amounts to $496 billion. This shows the stress governments face to keep citizens safe from harsh winters.
According to Bruegel’s estimate, the UK has earmarked 178 billion euros for the energy crisis. The European Union nations have meanwhile set aside around 314 trillion euros. DataPublished Wednesday.
Germany is the leader of the bloc with 100.2 billion euro allocated to the energy crisis. France and Italy are next with 53.6 billion and 59.2 respectively.
These costs are mostly due to government efforts to protect households and businesses against sky-high energy prices. Prices have soared ever since Europe was cut off from Russian gas supplies.
Futures on Dutch TTF gasAt their peak in 2022, prices for the European benchmark rose by more than 400%. Prices have since pared gains and are now up 220%, with the front-month contract around €204 euros MWh on Wednesday.
The UK has so far implemented the following: Heating prices capGermany, the United States and other countries like Germany are also initiating large-scale bailoutsAnd Aiming to earmark billions for aidIn the hope of being able secure enough supply for households this Winter, energy companies will be contacted.
While some have criticised these measures as putting pressure on fiscal spending, experts warn that it could be necessary to maintain control of eurozone inflation. Experts point to August’s 9.1% inflation rate.
Top economist Paul KrugmanHe stated that letting households carry the high price burden was not an option and could lead to Europe falling into a spiral of wage-price inflation, which would make it even more costly for Europe to fix.
Even with the billions of dollars in government assistance, the economic outlook remains dire. BlackRock analysts had warned that Europe was headed for a crisis. severe recessionIn early 2023, expect to see a negative scenario where the economy contracts by 0.9% by the end of the year.
