Is the energy crisis affecting Europe? Loss of the EU economy from the energy crisis by September 21 is close to 500 billion euros ($496 billion). It’s reported by Bloomberg, citing statistics from the analytical center Bruegel.
“The bill for the energy crisis in Europe is approaching 500 billion euros ($496 billion), despite attempts by European governments to soften the blow from skyrocketing prices,” the material says.
Europe and the energy crisis – what is happening?
So far, 27 EU member states have allocated a total of €314 billion to mitigate the energy crisis for consumers and businesses. At the same time, the UK authorities, which formally left the EU on January 1, 2021, provided €178 billion to overcome the negative consequences for the economy of the country.
The budgetary burden of the European countries from the expenses to mitigate the energy crisis has increased in recent months, reaching 1.7% of the total GDP of the European Union. Growth in costs is due primarily to an increase in the average annual inflation rate in the region, as well as the risk of a prolonged recession on the continent, says Bloomberg.
Against this background, the EU authorities are preparing an emergency plan to overcome the energy crisis. It should include the transfer of super-profits of energy companies for the needs of households and businesses that found themselves in the most vulnerable position because of rising prices for natural gas and other raw materials. The document is likely to be adopted by September 30, 2022, according to the article.
Earlier we reported that the oil embargo postponed for February against Russia provokes the growth of diesel fuel prices.
Credit Suisse bank CEO says “critical moment”
One of the largest banks in the world, Credit Suisse bank is experiencing a “critical moment”, said the CEO of the financial institution, Ulrich Kerner, in a memo. It is reported by TheStreet.
He expressed his understanding that there is a lot of uncertainty and speculation both inside and outside the company. According to Kerner, there will be more rumors and speculations in the future.
The outlet emphasizes that Credit Suisse bank is currently struggling for survival. A year ago the market capitalization of Credit Suisse was $22.3 billion; now it is only $10.4 billion. Over the past year, the stock of the financial institution has fallen by 56.2%.
If Credit Suisse goes bankrupt, the market could be in for a shock, experts predict. Kerner argues that Credit Suisse is in restructuring for a longer-term and sustainable future.
Earlier it became known that the second largest banks in Switzerland, Credit Suisse and Deutsche Bank, faced financial difficulties. Against this background, the share price of Credit Suisse on Monday, October 3, declined to a historical low of 3.518 francs, or about $3.55.
Earlier we reported that the European Commission is preparing for possible blackouts due to the crisis.
China makes hundreds of millions of dollars on reselling LNG from the US to European companies
China earns hundreds of millions of dollars on reselling LNG from the US to European companies. Local Asian companies are sending tankers carrying U.S. LNG to help the European Union prepare for the winter heating season, The Wall Street Journal reported, citing sources.
Reselling LNG from the US to European companies is observed due to the reduction in demand for gas to China. As a result, local companies profitably sell surplus feedstock abroad, primarily to Europe.
“In the first eight months of this year, only 19 LNG ships docked at Chinese ports, compared to 133 such ships in the same period last year, meaning a significant portion was diverted to buyers in Europe, as well as Japan and South Korea. US LNG exports to Europe are profitable for China and the United States,” the article says.
On October 3, analysts at the International Energy Agency (IEA) predicted that in February 2023 the storage of gas in the European Union will be up to 5% empty without supplies from Russia. At the same time, the situation will be affected by the reduction of LNG imports to Europe. For comparison, at the end of September 2022, gas storages in EU countries were 90% full.
Earlier we reported that Europeans derailed the EU energy saving plan due to the refusal to save gas.
Europeans derailed plans to save energy and reduce EU energy consumption due to refusal to save gas
Europe has failed its first winter test of EU energy consumption because of Europeans who refused to save gas. This was stated by Bloomberg analyst Javier Blas.
“If Europe had been a schoolboy, it would have passed its first energy conservation test last week. It failed. And that doesn’t bode well for the much tougher tests that lie ahead in January,” Blas said.
According to him, the demand for gas from the population of Europe is seasonal. At the same time, the EU energy commission did not know how residents would react to the call to save money. However, the first frosts have shown that people are not ready to reduce their energy consumption. During the recent autumn cold snap in Germany, for example, residents increased their gas consumption by 14.5 percent, higher than the five-year average.
He added that the high demand for gas should be a wake-up call for the EU energy commission, which should use concrete examples to show people what they need to do to save energy. At the same time, politicians should offer all possible options to save energy and distribute them before the onset of cold weather, which could occur in the coming weeks.
Earlier, we reported that businesses predicted a 500 percent increase in energy costs in the U.K.
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