European manufacturers shutter production amid skyrocketing energy costs

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European companies have paused production in their factories as energy prices continue to skyrocket. 

Earlier this month, Russia cut the flow of natural gas through the Nordstream 1 pipeline, citing mechanical issues, as the country continues its military operation in Ukraine. Prior to the cut off, European countries sanctioned Russia for its invasion of neighboring Ukraine. 

Germany, which remains Europe’s largest economy, has relied largely on Russian natural gas for 55 per cent of its imports as of last year and has seen the price of wholesale energy increase by 20 times since then. 

As detailed by the Federal Statistical Office of Germany, the producer price index for industrial products has risen 45.8 per cent year over year as of August, which followed a previous increase of 37.2 per cent in July, and 32.7 per cent in June, the Daily Wire reported. 

A number of European manufacturers have paused manufacturing and have begun laying off workers. One of the affected companies, ArcelorMittal, the world’s second-largest steel maker, is turning off production in one of its two German furnaces. 

“The high costs for gas and electricity are putting a heavy strain on our competitiveness. On top of that, from October onwards, there will be the German government’s planned gas levy, which will further burden us,” stated ArcelorMittal Germany CEO Reiner Blaschek, per Reuters. “With a tenfold increase in gas and electricity prices, which we had to accept within a few months, we are no longer competitive in a market that is 25 per cent supplied by imports. We see an urgent need for political action to get energy prices under control immediately.”

The European Union asserts that Russia is to blame for the continent's ongoing economic troubles and has called to redistribute profits from fossil fuel companies, Rebel News reported last week. 

Despite Europe’s ongoing energy troubles, numerous green politicians continue to insist on transitioning the country’s energy requirements toward green energy and renewables by decreasing the continent’s reliance on fossil fuels and nuclear energy. 

Shifting away from conventional European thinking, newly appointed British Prime Minister Liz Truss has proposed legislation to open the North Sea for oil and gas drilling, and build additional nuclear power plants. 

“We will deliver this by securing the wholesale price for energy, while putting in place long-term measures to secure future supplies at more affordable rates,” said Truss at an energy policy debate in the House of Commons. “We are supporting this country through this winter and next, and tackling the root cause of high prices, so we are never in this position again.”

The legislation, if passed, could save the average household up to £1,000 a year for the next two years, and provide the government the means to aid businesses and public organizations with their bills. 

In contrast to the U.K., Germany has been shutting down its remaining nuclear power plants, which it initiated plans to shut down in 2011, following the nuclear meltdown in Fukushima, Japan.