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Many companies in Italy near Bankruptcy as result of energy crisis

Tuesday, 30 August 2022 9:44 AM [ Last Update: Wednesday, 31 August 2022 7:06 AM ]

Facilities of the Haidach gas storage station near Strasswalchen, Austria, are pictured on July 1, 2022. Russia's gas group Gazprom is about to loose its usage rights at the facility. - Austria OUT (Photo by BARBARA GINDL / APA / AFP)

The energy crisis in Italy is getting more worrying every day as wholesale gas prices have surged to skyrocketing levels, which in turn may result in the bankruptcy of countless industries reliant on Russian gas produced electricity.

Italy, like most of its European neighbors, has reviewed its energy strategy following the start of the war in Ukraine and the sanctions against Russia, Rome's largest gas supplier, accounting for over 40% of imports.

Tens of thousands of businesses risk going bankrupt due to soaring energy prices in Italy

Italy

In an attempt to diversify its gas supplies Rome has sealed new deals with Algeria and has planned the construction of new gas infrastructures, a move that includes buying more LNG and setting up new gasification plants.

Italy relies on fossil gas [sic] for 40% of its electricity production, with the consequence that electricity costs have gone crazy.

Our industrial system relies very much on gas produced electricity; the risk is that the products of our steel makers and of our manufacturers would soon be out of the market.

Gabriele Masini, Staffetta Quotidiana Magazine

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Italy's industrial lobby, Confindustria, has warned of the risk of widespread company failures if energy prices keep surging this way. Confidustria is calling on the government to create a plan for rationing gas and to provide new subsidies to shield manufacturers.

Gas prices have recently climbed to over € 320 per megawatt hour, three times the price recorded at the beginning of July, and about one thousand percent more compared to the same period a year ago.

Eurozone inflation hits new record as energy, food prices surge

Inflation in European countries using the euro currency has once again hit a new record.

Businesses have slammed the rate as unsustainable while consumer groups have described it as an emergency.

The impact on the average Italian will be dramatic. I expect a profound reshape of our lives and energy future.

Resident, Rome

Europe energy crisis bites as continent braces for bitter winter

Europe is currently faced with an energy crisis as gas and electricity prices have reach unprecedented levels amid the Russian military operation in Ukraine.

In less than a month Italy will return to the polls with a large number of electors expected to skip the vote.

According to the latest polls 16 million Italians, which accounts for 35% of Italy's 51 million eligible voters, will not cast the ballot as "Their trust in politicians is wearing thin".