The war in Ukraine has aggravated the situation, with the price of energy registering an unstoppable rise as one of its consequences, causing in turn a reduction in the spending capacity of European citizens and the burden that this can pose for an economy that seemed to be starting to pick up after the onslaught of the pandemic.
The war will further boost energy prices in Europe, which are already high, according to Euler Hermes, who expect a 30% increase in energy bills this year.
By 2022, they estimate a total energy bill per household of €3,400 in Germany, more than €3,000 in the UK, €2,800 in France and just under €2,000 in Italy and Spain. Low-income households will be hit the hardest by rising oil and gas prices, as their energy bills tend to account for a larger share of consumption, ranging from around 5% in France and Spain to 6 .5% in Italy, more than 7% in the United Kingdom and close to 8% in Germany, where energy prices are the highest in Europe.
Currently and until June 31, a reduced VAT of 10% on electricity is in force in Spain for all consumers with contracted power of up to 10 kW. In Italy, in the case of gas, system charges have been canceled and VAT has been reduced from 10% to 5%. The German government has reduced the so-called EEG-Umlage, a tax used to promote and guarantee the development of renewable energy sources. Now it is at €0.065/kWh, compared to €0.372/kWh at the end of last year.
German homes will be the hardest hit