Europe's energy bill just hit $1 trillion, just beginning of crisis: Bloomberg

2022-12-24 22:25:13
Europe's energy bill just hit $1 trillion, just beginning of crisis: Bloomberg

Europe got hit by roughly $1 trillion from surging energy costs in the fallout of Russia's war in Ukraine, and the deepest crisis in decades is only getting started, according to a report.

Citing its calculations based on market data, a report published in Bloomberg said $1 trillion is a broad tally of more expensive energy for consumers and companies in European countries.

That marks just the beginning, according to the report, as high prices are expected to last years and no relief on global gas markets is expected until 2026 when additional production capacity from the US to Qatar becomes available.

Most member states of the European Union decided to stop importing gas from Russia over the war in Ukraine, turning to more expensive alternatives.

The report also referred to more than $700 billion pledged by the European Union governments to protect consumers and companies from soaring prices, noting that aid is becoming increasingly unaffordable as interest rates are rising and economies are already in recession amid the war in Ukraine.

“Once you add everything up — bailouts, subsidies — it is a ridiculously large amount of money,” Martin Devenish, a director at consultancy S-RM, said. “It’s going to be a lot harder for governments to manage this crisis next year.”

Russia launched the war on Ukraine in late February, following Kiev’s failure to implement the terms of the 2014 Minsk agreements and Moscow’s recognition of the breakaway regions of Donetsk and Luhansk.

Since then, the US and its European allies have imposed unprecedented waves of economic sanctions against Moscow while supplying large consignments of heavy weaponry to Kiev.

Moscow has been critical of the weapons supplies to Kiev, warning that it will only prolong the war.


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