Europe’s biggest enterprises may go bankrupt without Russian gas

European Union countries are experiencing enormous problems due to the denial of affordable gas supplies from Russia. The high price of energy will inevitably lead to industrial decline in Europe, and some energy-intensive steel companies can stop working forever. The Wall Street Journal (WSJ) wrote about it.

Energy crisis affected almost every industrial company of the European Union, and some factories can be shut down forever, WSJ reported. For decades many European industrial companies have used freely available Russian natural gas which at first came from the Soviet Union and then from Russia.

Now, the newspaper said, citing analysts, the high price of energy could cause a wave of industrial decline in Europe with the complete closure of a number of energy-intensive enterprises. Before the current events the cheap Russian gas helped European industrial companies to compete with American ones. But increased labour costs, tightening unions and environmental concerns and now the rejection of affordable Russian gas have put European industry in a worse competitive position compared to US manufacturers.

The publication notes that production cuts and plant closures are among the forced measures that have allowed the EU to eventually fill more than 80 percent of its gas storage capacity. Most national governments in Europe have decided that plant closures are now preferable to shutting off electricity to hospitals and schools for the winter. However, the WSJ concludes, plant closures are always costly. Representatives of energy-intensive industries are already openly saying that if they are not provided with state support this winter, they will face bankruptcy and closure.

Europe’s biggest enterprises may go bankrupt without Russian gas