The European power crisis is getting worse with industries in Europe starting to feel the pinch. Bloomberg. German electricity prices has gone up 500% compared to last year, mostly due to sanctions on Russian energy. High energy industries, such as glass and metal producers, have had to cut production. For example, the Budel Zinc Smelter, the biggest in Europe, will halt production in the Netherlands next month. France, with its well developed nuclear power system, is usually the backbone of European power. But even they have had to import energy due to the crisis. To add onto the crisis many of Europe's rivers are at lower levels due to a massive drought, affecting hydropower in many countries and affecting coal deliveries.
My Comment:
Europe is on the verge of collapse here. With energy prices skyrocketing eventually something is going to break and when it does it's going to break hard. Europe has a small window to reverse course as they could still lift Russian sanctions and get the gas pipelines flowing again, but I can't see that happening. Joe Biden is not only willing to defend Ukraine to the last Ukrainian he's willing to do so to every European as well. And I don't see any of these countries having enough of a backbone to tell Biden off.
What is even worse for Europe is the low levels in their rivers complicates everything. The major drought there will hurt not only power generation and transportation, it will probably affect their crops and could cause food prices to spike as well. It's a perfect storm that could bring Europe to their knees.
Keep in mind that we are still in summer, when electricity prices are low and most people aren't heating their homes. Europe only has a couple more months of that and pretty soon people will be turning on furnaces to heat their homes. And they will be using natural gas to do that. That will increase demands further and cause everything to spike.
Already industry is starting to suffer in Europe. They will not be able to keep operating if fuel and energy prices continue to explode. Eventually the people in charge will realize that to continue operating will cost them more money than shutting down. The huge zinc smelter in the Netherlands is the first but far from the last major factor to shut down.
This will have a ripple effect on the rest of the economy as it will put people out of work and those people will no longer be able to afford good and services. Obviously then companies that provide those goods and services will go out of business as well and pretty soon you are looking at a great European depression.
America is insulated from much of this. We have vast supplies of energy and though we have to import some we aren't reliant on foreign imports for most of it. We might have to tighten our belt a bit because if the European economic collapse but we will still have a functioning country. Well as functioning as it can be with our current leadership.
But Europe? People are going to die because of this. I especially fear for the elderly who might not be able to heat their homes this winter and may not be able to take advantage of other options. But there is a real chance of civil war or general unrest breaking out and that could cause massive problems for everyone.
What is most frustrating is how pointless all of this is. Russia is going to win in Ukraine and even if they weren't these energy sanctions are doing more harm than good from the perspective of the sanctioners. Russia is not having any of the economic problems Europe is having right now because they are making money hand over fist due to high energy prices. It's totally pointless and it's like Europe is committing suicide for no reason.
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