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Electricity Price Shocks Will Hit German and Italian Households

The Left-Liberal government of Germany will allow a doubling of electricity prices for households in 2024. This, as a result of (1) canceling subsidies for grid fees (€5.5 billion) from the federal budget; and (2) increase of CO2 tax, as per EU regulation, from €40 to €45/ton.

This will probably mean a 20% increase of electricity costs for producers, according to the chamber of commerce, and a 30% to 100% increase for households, according to the federation of local utilities.

Italian households, too, will pay more for natural gas and electricity in 2024. On Jan. 10, price caps for gas will be lifted, and on April 1st those for electricity. This is due to EU “free market” regulations, which had been agreed on back in 1999, but now have been forced in a stretto by the EU as conditionalities to borrow so-called recovery money. It is not clear how much prices will increase. Keep in mind that most Italian households use gas for heating and all of them for cooking.