EU industrial pain

European Industry Faces Shrink or Shut Decisions on Energy Pain
https://finance.yahoo.com/news/european-industry-faces-shrin…
Europe’s biggest industrial firms have been banking on spring to bring down soaring energy costs. Those hopes faded this week as Russian tanks rolled into Ukraine. Smelters and chemical factories across Europe were already struggling before the invasion sparked another jump in gas and electricity prices. Now, a growing list of companies including Europe’s biggest chemicals maker BASF SE are warning the energy crisis will keep hacking away at their bottom lines for the foreseeable future…

BASF isn’t alone. The energy-intensive metals industry is also struggling. Aluminium Dunkerque Industries France, Europe’s largest aluminum smelter, had planned to ramp up curtailed production after the French government helped shoulder as much as 80% of the cost burden. But the renewed surge in prices following Russia’s invasion of Ukraine has put the plan on ice, a labor union official said…

Companies are asking governments for help. France has already moved to relieve gas costs for consumers and Prime Minister Jean Castex froze gas tariffs in November…Italy has also slashed taxes on gas consumption. Germany, which imports more than half of its natural gas from Russia and has the highest industrial electricity prices in the EU, has yet to step in.

DB2

2 Likes

European Industry Faces Shrink or Shut Decisions on Energy Pain

It doesn’t matter if they do not stop Putin’s aggression.

Algeria has offered to help Europe with gas supplies. Germany said they are building 2 new LNG ports. Sure it won’t happen overnight, but until Putin is gone, Europe will be turning to sources other than Russia.

And in European fashion, I imagine the governments will mostly step in and just keep the factories open.

2 Likes

European Industry Faces Shrink or Shut Decisions on Energy Pain

It doesn’t matter if they do not stop Putin’s aggression.

Sure, and if there is a nuclear exchange then it all become moot.

However, this is a problem that predates the current crises, and one they have been wrestling with for some time. High input costs, be it labor or energy, have a tendency to make one uncompetitive.

DB2

1 Like

High input costs, be it labor or energy, have a tendency to make one uncompetitive.

I’m not sure Europe is uncompetitive.

Germany: 2nd largest trade surplus in the world, 4th largest economy
Ireland: 4th largest trade surplus in the world
U.K.: 5th largest economy in the world
France: 6th largest economy in the world
Netherlands: 6th largest trade surplus in the world
Italy: 7th largest trade surplus in the world, 9th largest economy
Spain: 14th largest economy in the world

They have had higher labor and energy costs for many decades.

2 Likes