- Europe’s energy crisis has cost almost 500 billion euros, as nations struggle to protect citizens from the harsh winter.
- EU governments allocate 314 billion euros, while Great Britain allocated 178 billion euros, according to the Bruegel research center.
- Germany allocated 100.2 billion euros, France 53.6 billion euros, and Italy 59.2 billion euros.
The energy crisis is close to costing Europe 500 billion euros, or $496 billion, according to the Bruegel think tank, a sign of the strain governments face to protect citizens from the harsh winter.
Bruegel estimated that Great Britain has so far allocated the equivalent of 178 billion euros for the energy crisis, and the countries of the European Union have allocated around 314 billion euros, he says. data published on Wednesday.
Within the bloc of 27 countries, Germany leads with 100.2 billion euros set aside for the energy crisis, followed by France and Italy, with 53.6 billion euros and 59.2 billion euros, respectively.
Those costs are largely in the government’s efforts to protect households and businesses from sky-high energy prices, which have soared since Europe was suffocated by Russian gas supplies.
Dutch TTF Gas Futuresthe European benchmark, rose more than 400% at its peak during 2022. Prices have since moderated and are now up 220%, with the first-month contract around €204 MWh on Wednesday.
So far, the UK has introduced a cap on heating prices, and other countries such as Germany are launching massive aid packages and spending billions to help energy companies in the hope that they can ensure enough supplies for households this winter.
Some have criticized the measures for putting pressure on fiscal spending, but they may be necessary to keep inflation in the eurozone under control, experts warn, pointing to the 9.1% inflation rate recorded in August.
Top economist Paul Krugman said letting households bear the brunt of high prices was “not really an option” and could send the continent into a wage and price inflation spiral that would be even more expensive for Europe to correct.
But the economic outlook remains bleak, even with billions in government aid. BlackRock analysts have previously warned that Europe is poised to slide into a serious recession by early 2023, seeing a negative scenario of the economy shrinking by 0.9% by the end of the year.