Italian homes, companies to bleed $83.8bln over surging energy prices
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The Italian economy is struggling to stand up in the face of the hardship Europe is facing in light of the widespread energy crisis.
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Vapour rises from a cooling tower at a power station in Sasso Pisano, Italy (Bloomberg)
Households and companies in Italy are losing an extra 82.6 billion euros ($83.8 billion) over the surging electricity and gas prices, a study conducted by the General Confederation of Italian Artisans (CGIA), an Italian trade union, revealed on Saturday.
The CGIA also said that the government is likely to pass an $83.8 billion relief package to tackle the soaring costs of energy, the union revealed.
"This scary figure will decrease with the release of a new decree next week, which, however, will only allocate 12 to 13 billion [euros]. Given the seriousness of the moment, the CGIA believes that a new budget expansion of 15 to 20 billion [euros] should be adopted," the study read.
The Italian Cabinet announced Thursday that a new package of economic aid to help Italian households and companies was underway, and it will include some $6.2 billion for measures to curb energy prices and solve the crisis.
Europe is currently facing a never-seen-before hike in energy prices and inflation caused by the Ukraine war and the European Union's sanctions on Moscow, which are restricting the flow of Russian energy resources into Europe.
The European Statistical Office said annual inflation in Italy is estimated at 8.4% in July, exceeding a 36-year record that peaked at 8.2%.
Gas supplies via Nord Stream have completely stopped since August 31 and the operation of the pipeline has been suspended due to scheduled maintenance work at the Portovaya compressor station, data from gas transportation system operators showed.
Thirteen EU nations have either ceased getting Russian gas entirely or are only receiving a portion of it due to the temporary blockage of the Nord Stream pipeline 1, the Russian TASS news agency reported last week.
The Nord Stream 1 pipeline is highly significant for Europe. Running through the Baltic Sea to Germany, the gas pipeline supplied around a third of the Russian gas exports to Europe. Before its shutdown for maintenance last week, the pipeline was running at 20% of its capacity.
Surging costs of power linked to gas prices have already stunted the production of various industries, such as fertilizers and aluminum manufacturers, and prompted EU governments, such as Germany, to increase their spending by billions in order to help their citizens.
Italy and Germany are now the two largest European countries most exposed to a gas supply shock due to their extensive use of natural gas and significant reliance on Russia, according to S&P Global Ratings.
About 60% of Germany's natural gas supply was piped in from Russia in 2020, primarily under long-term contracts.
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