Who is right Europe countries She should worry deeply, because the violent economic and financial crises she is going through will make her suffer for many years, and this pain may be accompanied by social tensions, popular revolutions, political unrest, the fall of governments and regimes, and perhaps the bankruptcy of some countries, as happened years ago when European countries, including Cyprus and Greece, declared bankruptcy. and its inability to pay the burdens of external debt.
The continent has been suffering for many months economic crisesForemost of which is record inflation accompanied by high prices of basic commodities, including food, an energy crisis, scarcity of natural gas resources, and jumps in the prices of oil and petroleum products, in addition to other crises, including disruption of supply chains, climatic conditions, desertification, and the serious repercussions of Corona on the financial position of the countries of the continent..
The Ukraine war played the biggest role in aggravating the economic situation in Europe and increasing the financial burden, especially with the decline in Russia’s gas supplies to the countries of the continent and the escalation of economic war between Moscow and the West.
This development was preceded by a decline in the severity of the Corona risks, which led to a jump in oil prices and the cost of purchasing energy products, which negatively affected the financial and industrial sector within the continent..
A few days ago, The Economist warned European countries of bankruptcy if they did not address the energy crisis, because this year they would have to allocate about 1.4 trillion euros to cover gas and electricity bills, 7 times what they were in recent years..
According to the Economic Journal, the measures that European countries can take to contain the energy crisis will require exorbitant costs, and will cost their treasury 450 billion euros, warning governments against increasing the burden of public debt through new loans, and stressing that “if countries take wrong measures, this will lead to their bankruptcy.” , and the European electricity industry will become a thing of the past“.
And last Wednesday John Trichet, the former European Central Bank governor, came out to us with alarming statements about the persistently high inflation in the eurozone, and said: “I am worried, it is necessary to control inflation again. We know the cost of losing control of inflation. We need to avoid that.” Trichet, for those who do not know him, is the governor of the Central Bank from 2003 to 2011
The measures that European countries can take to contain the energy crisis will require huge costs, and will cost their treasury 450 billion euros..
Moody’s, the credit rating agency, also joined the institutions worried about the situation in the eurozone, as it confirmed that the complete interruption of Russian gas flows through the strategic “Nord Stream” pipeline is likely to lead to a severe recession in the eurozone and a further increase in the already high inflation..
Supporting those concerns is a warning issued by Russian energy giant Gazprom on Wednesday that natural gas prices in Europe could exceed $3,000 per thousand cubic metres, a level that exceeds the proposed safety ceiling for European gas futures contracts..
These and other warnings are increasing with the jump in fuel prices in Europe by about 30% after Russia suspended the pumping of gas coming through the “Nord Stream 1” pipelines, and the European Union’s spending on gas and electricity reached unprecedented levels. Here, warnings are renewed of the bankruptcy of European countries already suffering from crisis financial conditions, record public debt, and a decline in public revenues since the outbreak of the Corona epidemic. The discussion here may relate to countries that have weight in the eurozone, such as Italy and the countries of the southern Mediterranean.
The European Central Bank will try with all its tools, policies and economic power to prevent Europe from slipping into recession and bankruptcy and limit the repercussions of continued high inflation on the economy, markets and citizens, and will continue the policy of raising the interest rate on the euro at record rates, as happened with the dollar, but are these policies sufficient to save the situation ?
I doubt that the treatment of Europe’s crises begins with stopping the war on Ukraine, stopping provoking Russia, and stopping threatening to dispense with Russian oil and gas, which provides it with about 40% of its energy needs, and here the wave of inflation in the world recedes, especially the inflation of energy and food prices, which are the two most prominent crises facing the countries of the continent.