A lot has been said in very general terms about the looming energy crisis in Europe. Those of us who live in North America whether it’s the US or Canada simply have a hard time comprehending the scope of what is happening in Europe.
I have family who live in Europe and on today’s show I’m going to put a personal connection to an energy bill.
Most large apartment buildings in Italy have centralized heating that turns on at the end of November for the season. The fuel for heating is usually natural gas. When we are talking about electricity usage, we are talking about lights, refrigeration, the hot water heater, and any small appliances like toaster and microwave. Cooking in Europe is overwhelmingly done with gas.
The largest draw in the warmer summer months is air conditioning. During the rest of the year, the biggest consumers of electricity would be refrigeration and the hot water heater.
Europeans don’t usually use a dryer to dry their clothes. They typically hang them to dry on racks.
We are not talking about excessive electricity usage. The bill comes every two months. My cousin who lives in Rome recently received a bill for 1,400 Euros for a two month period. Rates had not even peaked yet in September although they did increase again in October.
Well, Italy’s regulator approved a 59% increase in electricity rates for the 4th quarter.
Some residents in Italy are making the decision to reduce their living space in their apartments and to only heat a single room for the winter.
We have a hard time comprehending the lifestyle choices that virtually every citizen in Europe is going to face this year. Personal consumption and spending is going to be dramatically impacted. Discretionary spending is going to be way down this winter. That means less travel, fewer meals out in restaurants, less new clothing, and so on. The prediction of recession in Europe this winter is an easy one to make. Many businesses will experience a drop in revenue, which will mean job losses, and further economic hardship. The impact will not be isolated to Europe. In our global world it never is.
Host: Victor Menasce