Global Review – 18th June

Moscow cuts hit gas price by 43%; food by 70%

The cuts in gas supplies from Russia to Europe have caused the price of methane to rise by 43% in a week, from €82.5 to €117.74. The balance could have been heavier if, after a very volatile day, futures in Amsterdam had not lost 5.3% on recession fears. “The stockpiles were filling up at a good pace but there was a sudden change,” said Ing. Warren Patterson, calling the 60% cut in flows from Nord Stream “significant”. The Russian move can put Europe in difficulty, hindering the accumulation of reserves and causing prices to rise.

Faced with a daily request for gas by Eni of approximately 63 million cubic metres, Gazprom has announced that it will supply only 50% of what is requested. The Italian Ministry of Ecological Transition in the middle of next week will take stock to assess the situation on gas supplies. 

COMMERCE AND TOURISM – Even the Italians have to deal with what is happening. However, electricity and gas do not only weigh on families. From the bar to the grocery store, from the restaurant to the hotel, even the trade and tourism sector finds itself in the difficult situation of those who on the one hand find themselves paying increasingly expensive bills, on the other hand they must avoid transferring too much the price increases by moving away customers. The Confcommercio Energy Observatory, together with Nomisma Energia, did the calculations in the cash register of the various shops, which overall estimates an energy bill that rises to €27 billion compared to 11 last year. The survey also cross-referenced the 10 best commercial offers of gas and electricity, but despite this, the calculation signals a sting also on the production sector closest to the citizens. Here it is type by type:

FOOD – The bill has risen by 31% since January. It is obvious given the massive use of refrigerated counters. For them, a 70% increase in the electricity bill is calculated, which on the average of the 10 cheapest ‘fixed’ offers stands at €39,645. It is close to $40,000 but if you choose a variable contract you can instead go down to €34,635.

BARS – The annual expenditure, based on the increases, now stands at €10,670 for electricity: the bill increases by 54% compared to January. But the expected increase in gas prices is much lower, which is calculated at around 5%.

RESTAURANTS – An annual bill for electricity alone is now estimated to be €18,000. The increase is 58% compared to January. Added to this is the outlay for gas, which obviously has a greater use in the sector. The bill went from just under €8,000 in January to an estimated €10,000 in April, an increase of more than €2,000 or 34% in a few months.

SHOPS (NOT FOOD) – A bill is now estimated at around €9,400, with an increase of 87% compared to the €5,000 assumed in January. The trend of gas, on the other hand, is the same as for foodstuffs: the increase is 31% for an expenditure of around €3,000.

HOSPITALITY INDUSTRY – It is this activity that in the Confcommercio exam has the greatest outlay for electricity. The average bill would now stand at €137,000 while in January it was assumed a cost of under €80,000. The increase in a few months is in this case of 76%. Of course, the hotel sector is not spared from spending on gas. Since January, the increase has been €6,000 or 31%.

In other news…

EU inflation in May reaches 8.8%

The estimate of inflation in May in the euro area is confirmed at the record value of 8.1%, after the flash estimate, still at 8.1%, given on May 31. This was announced by Eurostat, the EU statistical office. Inflation was 7.4% in April and 2% a year earlier. In the EU, inflation in May was 8.8%, compared to 8.1% in April and 2.3% a year earlier.

WTO: unprecedented results at ministerial level

The 164 member states of the World Trade Organization achieved an “unprecedented” set of results at the last minute, said the director general of the WTO Ngozi Okonjo-Iweala. “We worked day and night, but we don’t go home empty-handed,” she added. At the end of the 12th ministerial conference, ministers and delegates adopted agreements on the WTO response to the Covid-19 pandemic and on the preparation for future pandemics, on the response to food insecurity, on exemptions for the purchases of goods by members of the World Food Programme, a ministerial decision on the TRIPS (intellectual property) agreement and an agreement on fisheries subsidies. Started on Sunday and extended by one day, the WTO ministerial was dominated by uncertainties until the very end.

Xi will host virtual summit of BRICS

Chinese President Xi Jinping will host a virtual summit of the BRICS countries on June 23 with the leaders of Russia, India, Brazil and South Africa, in the first initiative of its kind since Moscow’s aggression on Ukraine. Foreign Ministry spokeswoman Hua Chunying said the next day will be followed by the “high-level dialogue on global development”, always virtual, dedicated to promoting “a global development partnership for the new era on joint implementation of the 2030 Agenda and sustainable development”. Brics leaders and leaders from the main emerging markets and developing countries will participate.

Biden appeals to the Senate: ‘pass weapons law without delay’

President Joe Biden has strongly re-launched his appeal to the Senate to approve “without delay” a “significant bipartisan law on arms safety”, praising the tightening just approved by Delaware, his ‘home stat ‘, which also banned assault weapons. “States like Delaware, thanks to the leadership of Governor John Carney and the state parliament, continue to lead the way in protecting its people, but a national crisis requires a national response and the time has come for Congress to do the right thing,” he said.

EU Commission’s yes to Ukraine, Moldova EU membership

“We all know that Ukrainians are ready to die for their European aspirations. We want them to live with us for the European dream.” Said European Commission president Ursula von der Leyen, announcing the favorable opinion of her executive on the granting of EU candidate country status. A sincere yes, but conditional on implementation of fundamental reforms, from justice to the rule of law, passing through anti-corruption. The same judgment applies to Moldova while Georgia will still have to comply with some conditions and for now it must be satisfied with the granting of the “European perspective”.

‘Pence, a coward and a robot’ – Trump

‘A coward’ and a ‘robot’: that’s how former US President Donald Trump attacked and ridiculed his vice-president  Mike Pence in the aftermath of the public hearing of the parliamentary commission of inquiry into the attack on the Capitol, which revealed the strong pressure that the then president put on his deputy to overturn the outcome of the presidential elections. And to do so, he chose an evangelical religious forum in Nashville, Tennessee, in front of the public that represents the political base of Pence, in an attempt to undermine his chances in an eventual race for the White House.

UK orders Assange extradition to the US

British Minister Home Secratary Priti Patel has ordered the extraction of Julian Assange to the United States. The final green light comes after the judicial procedure in the United Kingdom had been completed on the controversial affair of the Australian activist who risks serving a very heavy sentence in a US prison for having contributed to disseminate through the online platform Wikileaks confidential documents also containing information on war crimes committed by US forces in Iraq and Afghanistan. “A dark day for press freedom,” commented Mrs Assange.

The cities where World Cup 2026 will be played

Fifa has unveiled the list of the 16 cities that will host the matches of the final phase of the 2026 World Cup. The World Cup scheduled in four years will be the first with 48 teams and will be staged in Canada, Mexico and the United States. These are the host cities: Atlanta, Boston, Dallas, Guadalajara, Houston, Kansas City, Los Angeles/SoFi Stadium, Mexico City, Miami, Monterrey, New York, Philadelphia, San Francisco Bay Area, Seattle, Toronto and Vancouver.

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