“Disaster is coming.” In Europe, the largest factories are stopping en masse

In Europe there is a critical lack of energy, while their prices hit record. Industrial businesses are closed one after the other — too high costs. Had to fork out and population: inflation is in double digits. How expensive anti-Russian sanctions — in the material RIA Novosti.

Sanctions on his head

September in Slovakia production collapses Slovalco is a leading provider of aluminium in Europe. On the street would be about three hundred full-time employees and more than a thousand employees of the companies-suppliers.

From the beginning, the company has reduced the production of primary light metal 40 percent. Now power mainly involved in processing.

Earlier, the suspension was announced by the Dutch Budel zinc plant.

Expensive energy hit hard, and the chemical industry. Stood Romanian giant Chimcomplex, producing polyols, octanol and ISO-butanol required to manufacture glue, sealer and lacquer.

The energy crisis has not spared fertilizer manufacturers. Due to excessively high gas prices idle Polish ANWIL, and the Norwegian Yara reduces power by up to 35 percent.

In Germany closes branches across the country Sticksoffwerke SKW Piesteritz. The company must pay the gas fee of 30 million euros a month, said her representative Christopher Profitly. The new levies are killing the business enterprise. The plant’s management are ready to stop the release. October 1 without work there can be 860 employees.

Plant SKW Piesteritz in Germany

Local officials are sounding the alarm. Throw letters Chancellor Olaf Scholz, Minister of Finance, Christian Lindner and the Minister of economy Robert Hubarg.

Full stop SKW Piesteritz Sticksoffwerke spells disaster for the whole country. In addition to fertilizers, the company produces Adblue — reagent for purification of exhaust gases of diesel engines, which in Germany are equipped with almost all trucks.

Analysts warn there is a risk that the energy crisis will lead to a reduction of the total capacity for the production of nitrogen fertilizers in Europe more than a quarter.

To save the situation could run ready for operation “Northern stream — 2”. But the West is adamant. “The opportunity to better survive the winter turn dramatic political failure,” said Robert Hubarg.

Thus, defending ambitions, the EU authorities are killing the industry in the region.

Meanwhile, in Lithuania and Latvia businesses are already experiencing problems with sales — cost of goods soared at times, according to the relevant confederations of the Baltic republics.

“While there are no decent alternatives to uninterrupted supply of oil and gas from Russia. Import from Norway, the Middle East, Africa, and by sea from North America does not cover all European requirements. Therefore, the expected reduction in output and GDP in the region,” warns George Svirin, a specialist in international financial markets in the marketplace “Finmir”.

The Eurozone are already in recession, experts of the international financial holding company of the UBS Group.

According to their estimates, in 19 countries economy will shrink 0.1 percent in the third quarter and 0.2 in the fourth.

Will continue to go up energy, for which the annual inflation rate in Europe reached a 25-year high in consumer confidence, she accelerated to 8.9 percent in the EU — to 9.8.

Most prices have soared in Estonia (23.2%), Latvia (21,3) and Lithuania (20,9).

As for the so-called alternative gas, but Norway refused to reduce the cost of natural gas to European importers.

Statoil gas processing plant in Norway

“The country’s locomotives, such as Germany, yet have the support of key companies. But in poorer countries the prospects of the companies are fairly sad,” says Oleg Cherednichenko, associate Professor of the economic theory of REU named after G. V. Plekhanov.

To hit the European wallets

The electricity in the Old world becomes more expensive since last spring. Rates went up after a spike in gas prices, which runs most of the TPP. Effect of a limited offer on the market, low occupancy rate of the underground vaults in the EU. The flames poured high demand for liquefied natural gas (LNG) in Asia.

Autumn quotes blue fuel kept in the thousands of dollars per thousand cubic meters.

At the beginning of March 2022, the price soared to four thousand for fear of ban on imports of Russian energy resources. In addition, decreased pumping through Ukraine and the Nord stream. And the route of the “Yamal — Europe” and has at all stopped.

Work on the gas pipeline “Yamal — Europe”

Then the cost of energy dispersed anti-Russian sanctions. In addition, heat waves forcing more people to enjoy the air conditioning.

Plus, increased competition for LNG between Europe and Asia and those and others are rushing to stock up on fuel in anticipation of winter.

As a result, in the EU began to outbid gas, thus plunging the world into an energy crisis.

Price volatility in the European market is still preserved. Last week, the September futures has surpassed 3,400 dollars. Quotes went up after the message of “Gazprom” and that “Nord stream” due to a planned maintenance stop from August 31 to three days.

Czech presidency of the EU Council, convene an urgent meeting of energy Ministers of the EU countries to discuss measures to resolve the energy crisis, announced the Prime Minister Petr Fiala.

Expensive fuel hits the pocket, not only manufacturers, but also of ordinary Europeans. For example, for consumers in Lithuania, Latvia and Estonia electricity rates reached a record level — four thousand euros per megawatt-hour (four euros per kilowatt-hour).

Moreover, last week in some EU countries, the price of electricity on the market “day ahead” rose above 700 euros per megawatt-hour — a historical high.

Transmission lines in Switzerland

In these circumstances, the West has not invented anything better than to save on heating. For example, the German government offered to reduce the temperature in offices and public areas to 19 degrees Celsius. The building, where people “are not a long-term”, it is not necessary to heat, according to officials.

“Icicles in houses, of course not. Five EU countries have filled the gas storage by 90 percent. The old world will survive the winter — weather forecasts, cold. Even in case of suspension of imports from Russia, the Europeans will be able to use the reserves. But next winter challenges will arise, if delivery does not increase,” — said Giorgi Svirin.

The European industry prospects sadder. “The cost of production depends on the quotes of the gas and electricity tariffs. Most likely, many companies will be forced to close or suspend work and this will lead to mass layoffs,” the expert believes.

The lack of regular income and high prices in stores threaten the socio-economic blast in Europe.

In addition, the rise in prices of fertilizers due to the closure of almost a quarter of the plants in the EU is fraught with poor harvest. Therefore, in 2023-2024 can acutely be a question of food shortage in the region.