The sharp rise in energy prices in Europe due to the war in Ukraine poses a threat to European industry. This is what the accounting and consultancy firm PwC writes in a study. According to PwC, industrial companies may decide to leave Europe due to high energy costs.
The researchers argue that Europe is losing competitiveness due to the energy crisis and becoming less attractive as a location for industrial companies. Germany, the largest economy in Europe, has been particularly hard hit due to its heavy dependence on Russian gas. As a result, the automotive, chemical and metallurgical industries in Germany are under great pressure, because these sectors use a lot of energy in their production processes.
“Many companies may decide to restructure their production in Europe in the future,” writes Andreas Späne, a researcher at PwC, in the report. For example, one can choose European countries where energy costs have risen least drastically, such as France, or even a complete move away from Europe.
Government support
Researchers think the problems with energy prices won’t abate until 2024. To maintain an important industry in Europe, governments must make the right choices with measures to support companies against high inflation and accelerate the energy transition , says the report.
Source: BNR
Andrew Dwight is an author and economy journalist who writes for 24 News Globe. He has a deep understanding of financial markets and a passion for analyzing economic trends and news. With a talent for breaking down complex economic concepts into easily understandable terms, Andrew has become a respected voice in the field of economics journalism.
