Thursday, November 30, 2023

Energy crisis: Italian employers panicked by soaring bills

” Be quick ! The General Confederation of Italian Industry, Confindustria, usually reserves this injunction for the financial and economic crises that threaten the peninsula. She is now panicked by the consequences of the energy crisis, which has already made its first effects felt.

Carlo Bonomi, the president of the transalpine employers, warns against the risk of generalized bankruptcies if the prices of energy do not fall. At least 120,000 businesses and 370,000 jobs are at risk over the next six months, he said. Over one year, the retail sector recorded a fivefold increase in its energy bills. They have tripled in restaurants and hotels.

As for the transport sector, it is bearing the full brunt of soaring fuel prices. According to Carlo Sangalli, president of Confcommercio, which defends the retail sector, “the sector’s energy costs will triple this year to reach 33 billion euros”. “Savings are essential, otherwise we can say goodbye to the increase in GDP,” he adds. The unions fear a catastrophe in the industrial sector. Confindustria is asking the government for gas rationing and a national price cap if it cannot be adopted at European level.

Less Russian gas

Mario Draghi, the outgoing Prime Minister, is pleased that his efforts to find other suppliers have enabled Italy to reduce its supplies of Russian gas: Russia’s share of Italian consumption has fallen from 40% in 2021 at around 18% this summer. Numerous energy agreements have been signed with Algeria, Angola, Azerbaijan and Egypt.

Italy has reached 80% of its gas storage capacity for the winter and is on track to reach 90% by October, assures the Minister for Ecological Transition, Roberto Cingolani. The country could be completely independent of Russian supplies by autumn 2024 if the project for two new liquefied gas regasification plants comes to fruition as soon as possible.

New aid plan

The government is nevertheless aware that its calls for energy sobriety are insufficient. The word “rationing” is still taboo for all political parties one month before the legislative elections. All are calling for the adoption of a new aid plan, less than a month after that of 15 billion euros announced by Mario Draghi to support businesses and households.

A council of ministers will consider the issue next week. It should develop an emergency plan to deal with the situation, with strict measures to save natural gas. The tax reduction of around 30 cents per liter of fuel, adopted at the beginning of April and confirmed until September 20, will be extended, as will the tax credits for energy-intensive companies. The next aid package should mobilize according to estimates at least ten billion euros.


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