How much will the energy cost us?

Despite the many messages of condolence that have come from Italian politicians in tribute to Queen Elizabeth II, the news of her death does not seem to have distracted party leaders too much from their election commitments. The general election is 16 days away and by now the campaign has moved into full swing. Political leaders continue to tour Italy shaking hands and engaging in mostly long-distance polemics. An exception was the Forum in Cernobbio where they challenged each other on Sunday afternoon in a discussion of major current issues. The most shared observation among those who followed the debate was the increasing distance, exacerbated during the week, between the arguments of FdI leader Giorgia Meloni and those of Lega Secretary Matteo Salvini, especially on what concerns the effectiveness or not of sanctions against Russia. Meanwhile, PD Secretary Enrico Letta has seen some of his statements be at the center of the political debate in recent days, dragging more than a few controversies on himself. During a meeting of PD candidates, Letta in fact spoke of an «alarm for Italian democracy» in reference to the possible victory of the center-right, appealing to the rhetoric of “useful vote” for the PD and not for the M5S or the Third Pole. In essence, Letta would take the center-right’s victory in the next election for granted, and for this reason on September 25 he seems to be aiming not at winning but rather at “losing well”. A strategy, this, certainly not reassuring to the party’s voters for whom the best scenario presented seems to be that of a “moderate” defeat. 

But in the background of the election campaign, always predominating is the concern related to high energy prices, the true common denominator among the attentions of all parties that have been calling on the government for weeks for prompt action. The Ministry of Ecological Transition has provided an initial response with the publication of the Regulation for the Containment of Gas Consumption, aimed at “immediately making useful savings at the European level to prepare for possible disruptions in gas supplies from Russia”. The aim of the text is to promote conscious and intelligent gas and electricity consumption behaviors that will affect the containment of gas demand but also decarbonization policies. The fulfillment of such measures is thus left to the common sense of most, or at least that is the hope of Ecological Transition Minister Cingolani, according to whom «if all citizens observe the rules we can save up to 5.5 billion». But not everyone appreciated such a measure. In fact, among the reactions to the Regulation stands out the one that came from Moscow, which raises quite a few concerns. According to Russian Foreign Ministry spokeswoman Maria Zakharova, the Italian plan to reduce dependence on Russian energy sources would be imposed by Brussels, which in turn acts on orders from Washington, but in the end «it will be the Italians who will have to suffer» for it.

In contrast, Europe is continuing to watch the Italian election campaign by showing a certain neutrality. «Elections of member States should be respected. The Eurogroup does not speculate on the outcome of the vote (…) it would be inappropriate for the EU to take a position», are the words of a senior European official ahead of the Eurogroup meeting in Prague on Friday to discuss the global economic situation and macroeconomic policy coordination in the eurozone. Simultaneously, the extraordinary meeting of European Energy Ministers in Brussels to discuss possible emergency measures for soaring energy prices, especially in view of the coming winter. According to what is being reported, possible emergency credit lines for energy market participants are also being discussed on the table and, in particular, the possibility of imposing a Price cap on gas, as proposed by Prime Minister Draghi. The latter possibility does not seem to have gone unnoticed by Putin, who thundered this week: «Russia will no longer supply oil and gas to those Western countries that will impose a Price cap on Russian energy», stressing that the Western attempt to isolate Moscow, is futile and «impossible». All this while the price of gas continues its upward race and on Monday alone it sprang 35%, +400% from a year ago. Moreover, according to an estimate by Unicredit, Europe could pay 450 billion more per year for higher gas and oil prices, about 3% of EU GDP. The question then arises, a few months from now, what will be the real impact of high energy prices on families, businesses and the Italian economy. Most importantly, will it be sustainable?