Bankruptcy, Blackouts, and Industrial Shutdowns Sweep European Energy Markets

Sept. 20, 2021 (EIRNS)—In continental Europe and the United Kingdom, a hyperinflationary rise in energy prices over the course of 2021, and resulting bankruptcies and shutdowns of critical industrial production, has now unleashed a chain reaction of breakdowns of the physical economy of strategic proportions—not unlike what happened with the orchestrated 1973 oil price shock, which permanently reorganized the world economy under the financial dictatorship of the City of London’s speculative eurodollar.

Europeans are now staring with growing alarm at the prospect of a cold, hungry winter. Goldman Sachs warned in a recent report about potential widespread power blackouts in Europe in the coming winter.

The price of natural gas has tripled this year in Germany and the U.K., and prices for coal, oil and electricity are all zooming out of reach. Sharp shortfalls in electricity generated by idiotic, dysfunctional wind-power parks during the first half of the year, are part of the cause for the increases; so, too, is financial speculation, since energy prices are determined at the speculative spot markets for gas (TTF) in Amsterdam and for electricity in Leipzig. The dramatic rise in energy prices is bankrupting industries, consumers and energy companies alike, and is leading to the first shutdowns of energy-intense industries.

The British government called an emergency cabinet meeting today to address the crisis. Kwasi Kwarteng, U.K. Secretary for Business, Energy and Industrial Strategy, held talks today with energy suppliers about an expected wave that smaller providers will go bust in the weeks ahead, while putting on a stiff upper lip for the public by announcing that the government remains “confident that electricity security can be maintained under a very wide range of scenarios.” He dismissed rumors of impending rolling blackouts and a three-day work week.

Prime Minister Boris Johnson stated: “We’ve got to try and fix it as fast as we can, make sure we have the supplies we want, make sure we don’t allow the companies we rely on to go under. We’ll have to do everything we can.” The largest energy suppliers are asking the government for a bailout of some sort, possibly placing defaulting customers into some sort of a “bad bank” as smaller suppliers go belly-up.

Zero Hedge reported that five British suppliers have gone bankrupt since Aug. 1, and only 6-10 companies out of 55 are expected to survive the carnage. “Bulb Energy is one power supplier on the verge of financial turmoil as it fails to cope with record-high wholesale prices. The startup has 1.7 million customers and has been advised by financial advisory and asset management firm Lazard to explore ‘options.’ ”

Zero Hedge went on: “Millions of Britons brace for natural gas and electricity inflation, soaring food prices, and possibly electricity shortages this winter. The broader implications could cripple the Eurozone economy.”

The same is happening in related industries across Europe. Fertilizer producer CF Industries suspended production at two British plants. Yara International, a Norwegian chemical producer which is the world’s largest fertilizer company and which, along with Cargill, practically controls all world nitrogenous (and other) fertilizer, which is made from natural gas, announced cuts in production of ammonia by 40%. Also Germany’s leading chemical producer BASF and the aluminum producer Aurubis are considering production cuts.