Europe is struggling to overcome the spiraling energy crisis that could set the stage for blackouts, factory closures and a deep recession. Russia has stopped its supply of cheap natural gas on which the European continent has depended for years. This pushed the European government into a situation of scarcity and desperation. They struggle to find new supplies and ways to reduce the severe impact or as the Europeans call it “energy blackmail”. They pressure and divide the European Union as it backs Ukraine against invading Russia.
The Russian government has halted supplies from the Nord Stream One gas pipeline, saying Russian gas shipments are down 89% from a year earlier. Russia supplied 40% of European natural gas to Germany.
Currently, Europe is looking for alternative options. It has lined up alternative gas supplies and sought shipments of liquefied natural gas or LNG that are supplied by ships from the United States. Second, Germany is keeping its coal plants open to deal with the energy crisis. One, that the country was going to shut down to reduce greenhouse gases.
European nations are firmly determined to stick together in times of crisis, but dividing Europe is the main objective of the Putin government. Other nations like Turkey believe that Europe reaps what it sows, which indicates Europe’s attitude towards the Putin government.
For now, the blocs are holding EU energy ministers, and heads of state are due to meet in Brussels on September 9. The idea is to further strengthen bloc solidarity by coordinating energy policies and action plans.
But, in the countryside, protests have already taken to the streets against high energy bills. Many protesters burned gas and electricity bills in the city center. In the Czech Republic, citizens protested against the pro-Western government. They condemned the government for supporting Russian sanctions, accusing the government of not being able to tackle soaring energy prices.
The same situation has been seen in other parts of the continent. In Germany, around 3,000 people gathered in the city to protest the high cost of living, soaring energy prices and insufficient government support measures.
To overcome the challenge, the European Central Bank, which oversees economic policy for the 19 countries that use the euro as their currency, has taken an aggressive step to tackle inflation, matching its biggest ever rate hike of three quarters. by more than one percentage point.
European Union ministers have already met and discussed how to overcome the crisis to intervene in energy markets to try to control soaring prices.
Europe is in a disastrous situation. The sanctions against Russia have caused the European economy to collapse. The risk of drowning incomes, growing inequalities and growing social tensions could not only lead to a fractured society, but also to a fractured world.
The meeting held on Friday indicates that the situation is complex and cannot be overcome easily. Europe has not experienced a drastic crisis since the 1970s and it is not about to end. European Union energy ministers were divided on Friday on whether to cap Russian gas prices, as they met to discuss protecting citizens and businesses from rising energy bills.
How are European countries overcoming the energy crisis?
Britain, one of the largest market-oriented countries in Europe, has taken one of the most important decisions to stem the energy crisis in this direction. Prime Minister Liz Truss announced a plan to freeze energy plans for two years for consumers and six months for businesses. The move was taken because it would prevent household energy bills from rising by 80% next month, which would slow the country’s inflation rate.
Additionally, Britain has implemented a regulated energy price cap for households, but consumers are skeptical that these decisions will weather rising natural gas and electricity prices.
In the port of Eemshaven on the north coast of the Netherlands, two floating tankers have dropped anchor, ready to tap into natural gas reserves to help Europe weather the harsh winter. The tankers called Golar Igloo and Eemshaven LNG together can hold 200,000 cubic meters of LNG.
Normally, in situations where supply shortages lead to an increase in the price of commodities, suppliers step in to overcome the shortage. This is happening to some extent in Europe as shipments from the United States, Egypt and other exporting countries increase. But the main problem is that Europe does not have the LNG import capacity to cope with the lost deliveries from Russian gas pipelines. This implies that despite skyrocketing gas prices, supply chains and alternative energy sources cannot be built fast enough to completely solve the problems for a few years.
One of the important consequences of the energy crisis in Europe is that the Chinese chemical sector is recovering. The data shows that the sector jumped more than 3.5%. Several other companies accelerated their share prices.
If European or more specifically German chemical plants were to slow down or stop production due to unaffordable and uncertain energy supplies, it would be good for China. This means that the sun rises from the east where the west suffers from the rains.