Letter: Europe Express
Your critical focus on what is needed in Europe today. We are saved on the weekend.
Maria Grazia Zingarello could not believe her ears when the Italian government warned that electricity bills could rise by 40% in the next three months.
“If prices go up again, I don’t know where to go,” said a 49-year-old Milan caregiver who is already struggling to pay her rent, mortgage and food. “I often look at the calendar and think I’m not going to be there at the end of the month.”
Her monthly salary of about € 1,000 is the only allowance in a small house where she lives with her two daughters and two grandchildren.
The family provides an example of why governments throughout Europe are concerned about rising electricity and electricity prices. They are negotiating billions of euros in emergency packages to protect families, as well as small businesses that have been struggling to keep pace with the coronavirus.
On September 23, Italian Prime Minister Mario Draghi unveiled a € 3bn package to reduce rising electricity prices, aimed at helping poor families and small businesses repay their debts.
The system suspends gas and electricity bills for 3m households. Fixed wages for all households and small businesses of 6m will be eliminated, and the value added value for natural gas will be reduced from 22% to 5%, in the fourth quarter.
Speaking to the country’s business community on Thursday, Draghi said the move was “of great importance to the parties”. His government has already spent € 1bn on the electricity market to reduce consumer prices.
Italy consumes two-thirds of its electricity and exports and gas accounts for more than half of the country’s electricity, much higher than in France, Spain and Germany. This means that the cost of gas will accelerate into larger operations.
The rise in Italian commodity prices has risen to an average of 20% in August, the fastest rate in about 40 years and faster than 15.4% in euros.
Italians spend more on electricity, gas and other household items than any other part of the euro, so rising electricity prices have a significant impact on household income, especially for those on low incomes.
The rise in energy prices is “forcing poor families to meet their basic needs”, said Isabella Catapano, director of Albero della Vita, an anti-poverty watchdog. “Bills are fixed costs, which need to be paid. As a result, families are forced to spend less and less money on other things, such as good food or education and entertainment for their children. ”
The unemployment rate in Italy is more than 9 percent, more than twice as much as in Germany, and by 2020, about 5.6m people are considered to be extremely poor.
Major electricity tariffs are also hitting businesses, with commodity prices rising at an annual rate of 12.3% in August, from less than 1% at the beginning of the year.
Silvia Barbati, 37, a gymnast in Rome’s Trieste area, worries that the rise in prices could mean the commitment of small businesses like hers in two years of a pandemic outbreak was in vain.
“Our operations have been significantly reduced during the Covid era and we are now working to get it back on track. I hope the next debt will not be in heaven,” he said.
Many families and small businesses are afraid to continue, says Paolo Peroso, President of the Amici di Porta Pia, a business community in central Rome.
“There is a lot of confusion and fear right now. . . loans that can be more emergency than 30 or 40% more than usual are useless, ”he said. “It can be hard to suck, especially for those who have to keep your windows, lights, or refrigerator running all day long. Some worry that they will not be able to do it right now. ”