OilPrice.com
- Europe’s energy crisis has already cost governments tens of billions of dollars and a looming confrontation with Russia would only make that worse.
- European households are already set to see a 54% increase in the cost of gas and electricity despite the best efforts by governments to keep prices down
- Russia provides about 40% of Europe’s natural gas, and if Russia does invade Ukraine and European governments respond with sanctions, there is a chance that supply could be cut off
Europe’s energy crunch is intensifying even as governments across the continent struggle to stop the crisis through stop-gap policy measures and subsidies. The past year has seen a stunning 330% surge in gas prices across European markets, hitting consumers extremely hard at the same time that the global economy is attempting to recover from and adapt to the ongoing novel coronavirus pandemic. To date, European governments have been largely helpless to stop skyrocketing inflation. The forces they are up against – economic, health, and political – far outgun the abilities of the European Union.
So far European leaders “have spent tens of billions of euros trying to shield consumers from record-high energy prices, and themselves from voters’ wrath” according to reporting and analysis by Reuters, but the efforts are going to fall far, far short of the economic fallout continuing to batter European consumers. “BofA analysts estimate the average western European households spent around 1,200 euros ($1,370) a year on gas and electricity in 2020,” Reuters writes. “Based on current wholesale prices, they estimate this will rise by 54% to 1,850 euros.”
