European governments have allocated about 280 billion euros to mitigate the impact of the energy crisis on households and businesses.
It is reported by Bloomberg with reference to the calculation of the Brussels think tank Bruege.
Financing measures new appropriations since September and includes spending from tariff subsidies for small businesses in Greece to direct payments to consumers in Belgium. Part of this amount has not yet been spent.
“Prices will remain high through the winter and governments must act in a worst-case scenario – prices will not fall even after that,” said Giovanni Sgaravati, an analyst at Bruegel. “Governments should focus on reducing energy demand where possible.”
Over the past five years, wholesale energy prices have risen more than ten times their seasonal average as Russia cuts gas supplies to Europe. This negatively affects the economy of the entire region, and heavy industry is under pressure. Consumers are facing a skyrocketing cost of living. For example, UK household bills will triple.
The challenge for governments is the rapid rise in inflation, which reduces the overall standard of living. Inflation in Britain could exceed 18% in January for the first time in half a century due to soaring energy prices, Citigroup Inc said earlier.
“European policymakers have responded to the sharp rise in energy prices mainly with massive price-cutting measures, including subsidies, tax cuts and price controls,” the IMF experts wrote this month.