Industry in Europe is winding down due to high gas prices, - Bloomberg
Europe’s industrial giants are starting to cut production on the continent, even as gas shortages ease, because its price is too high.
Bloomberg writes about it, Censor.NET reports with reference to European Pravda.
Europe currently pays seven times more for gas than the US, underscoring the continent's competitiveness crisis. The day before, the Russian president announced mobilization for the war in Ukraine, which was evidence of the absence of signs of a decrease in gas prices for Europe in the near future.
Accordingly, Germany's positive trade balance narrowed as a sharp increase in the cost of imported energy resources offset its expensive exports of cars and machinery, and chemical companies began to move production outside the country.
The agency also reported that Volkswagen, Europe's largest carmaker, warned on Thursday that it may move production from Germany and Eastern Europe if energy prices do not fall.
In France, glassmaker Duralex said it is putting its furnace on standby for five months, even though the company's order book is full and sales are growing.
The most difficult situation is observed in Germany, where industrial production makes up approximately 30% of the economy and employs about 1.15 million people. Energy-intensive factories across the country supply everything from components for car transmissions to chemicals for medicines and everyday plastics.
Governments across Europe, where industrial production makes up about a quarter of the economy, are taking emergency measures to support utilities and cushion the impact of the crisis.
Chancellor Olaf Scholz will travel with a group of business leaders to the Middle East this weekend to try to strike liquefied natural gas deals with Saudi Arabia and Qatar to offset Russian gas supplies.
The United Kingdom this week announced a plan worth about 40 billion pounds ($44.8 billion) to cap wholesale energy prices included in gas and electricity contracts for businesses for six months.
French President Emmanuel Macron on Thursday urged small and medium-sized businesses to refrain from signing new energy contracts at low prices, saying governments were in the process of reviewing the cost of gas and electricity.
