Despite the geopolitical framework, the European situation it held up until the summer, recovering the gap with respect to pre-crisis levels. However, some obstacles have stood in the way of this path, above all related to therising prices of energy raw materials and the acceleration ofinflation going to anticipate a difficult phase in the autumn period. The Ref Ricerche analysis center writes it in its last note on the economic situation.
European economy: Italy is not the worst
Il GDP in the second quarter it showed a change of 0.6% for the area as a whole, with a trend dynamic of 3.9. The GDP of the area now exceeds the pre-crisis levels of 1,2%; among the major economies, the lagging behind is la Spain, which paid for the specialization in activities related to tourism, the recovery of which however continued during the summer period. L'Italy for once it is not bringing up the rear thanks above all to construction, which has benefited from the measures of the budgetary policy (the superbonus and the recovery of public works), but also thanks to the low specialization in the automotive sector, which has instead influenced the Germany, following the difficulties related to the lack of microchips. Overall, the study center explains, until the third quarter, European countries extended the recovery phase, mainly thanks to the reopening of businesses subject to distancing measures. However, some obstacles have stood in the way of this path, above all linked to the increase in the prices of energy raw materials and the acceleration of inflation.
In the summer, the extra savings of families were eliminated
Despite soaring inflation, households have increased i consumption of services, supporting the phase of reopening in the sectors subject to restriction. Date the fall in purchasing power of the same period, consumption was financed through the excess savings that had formed during the crisis.
Indeed, in the past two years European households had greatly increased the level of their savings as disposable income had remained relatively stable, thanks above all to transfers from the public budget, against the reduction in consumption linked to distancing measures.
But probably the savings rate of households in the summer fell below pre-crisis levels. Consumption stability above all reduced the flow of new savings held by European households in liquid form and therefore led to a slowdown in the accumulation of bank deposits which had characterized the entire period of the pandemic.
In 2022, inequalities will widen
The stabilizing effect on demand that may derive from the extra savings of the last two years is however limited to a group of more affluent families. If we then add to this that the current price increases weigh more on low-income families, it also follows that in 2022 a significant expansion of the inequalities. It is no coincidence that governments are intervening with measures that seek to give greater support to families in conditions of greater hardship.
In all of this, household confidence has worsened in most European countries. Given the nature of this shock, which for European countries is largely dependent on the costs of imported commodities, especially energy, businesses are also in difficulty, finding themselves squeezed between cost increases and the weakening of final demand.
The gas boom and the slowdown in the prices of other commodities
The cost of the increases in energy raw material prices for the euro area as a whole would be 500 billion euros, almost 4 points of GDP, if prices stabilized on the values of last spring, prior to the new increase in July-August. But since then the gas market prices have more than doubled (well surpassing 330 megawatt hours) and it may not be over there.
In the last two months, the worsening of the international economic situation and the strengthening of the dollar exchange rate led to a rather marked slowdown in the prices of most raw materials: first and foremost metals, more linked to the trend of production activity, and then they gradually extended to agricultural and food raw materials as well.
The higher gas prices, therefore, causing a worsening of growth expectations in the Eurozone, contribute to the slowdown in the prices of other commodities. However, the relationship between energy prices and those of other commodities does not depend solely on expectations on international demand. In recent months, following the sharp increases in energy prices, some foundries in Europe have shut down their plants. This has interrupted the decline in prices, and in some cases led to increases.
The road to European energy independence out of the crisis
Gas arrivals from other countries should increase in the coming months. Crisis exit strategies should also aim to strengthen European energy independence over a one-two year horizon, by reducing energy consumption, through a change in lifestyles, a reduction in the energy intensity of our GDP and by expanding the use of other sources.
We have to run. The countries that succeed in increasing their energy independence before others are the ones that will also win the game of international competition. The need to deal with the emergency by reducing energy dependence will soon push European countries to adopt measures that are not consistent with the programs of the environmental transition, for example using coal-fired power plants e nuclear which were on the way out. But it is also important that investments in renewable accelerate; those who have already invested in self-production of energy are now enjoying an incredible advantage.
