Millions of Germans went to the polls yesterday to choose a new leader, bringing a close to the era of Angela Merkel after her 16 years in power. A major problem awaits the new chancellor of Europe’s largest economy: rising energy costs. Droughts in Brazil, reduced output in the North Sea and other global supply and demand pressures as economies reopen from the pandemic have sent wholesale natural gas costs spiralling, with little sign of easing off over winter. Benchmark European contracts are already up about 250pc this year, forcing fertiliser plants in Europe and Britain to shut down, hitting household finances, and threatening the eurozone’s recovery. Amid clamour for a co-ordinated response, the European Commission is trying to develop measures to help countries in the bloc respond to surging prices within energy market rules, including by tweaking VAT or other charges on bills. It is also facing calls to investigate Russia’s role in the crisis, given accusations that the state is restricting supplies to put pressure on Germany to quickly approve Russia’s controversial new Nord Stream 2 pipeline to Germany under the Baltic Sea, bypassing Ukraine.
Telegraph 27th Sept 2021 read more »