22:32 13 January 2022
Soaring energy prices threaten the recovery of Europe's economies
The dizzying gas and electricity prices hurt the personal finances of Europeans, and their lulled willingness to buy could harm the European economy, according to a Bloomberg analysis.
"It is gas and electricity that became prohibitively expensive in Europe. Consumers and industry across the region will likely have to make some tough choices about their energy consumption," Citi analysts quoted by Bloomberg reported.
The energy crisis may reduce gross domestic product by as much as 1 percentage point. The impact will vary from country to country, and government support could mean less extreme effects, estimate Bloomberg economists.
"In the short term, we do not think that rising energy prices will threaten Eurozone growth as governments have taken swift countermeasures, but their sustained growth may jeopardize economic growth, especially if governments pullback support," Nadia Gharbi, Pictet economist in Geneva, said.
The crisis is particularly felt in Eastern Europe. Bloomberg describes the situation from Poland, where miners last week blocked access to coal to the power plant for two days due to unpaid overtime.
