Skyrocketing energy bills are threatening to shutter over 100,000 businesses in Italy, according to Carlo Sangalli, head of the Italian business association Confcommercio.
In an interview with news outlet Corriere della Sera, Sangalli said, “Already today many companies are reorganizing or reducing services… Between now and the first half of 2023, at least 120,000 small businesses in the service sector are at risk… This is a cautious estimate that does not take into account the largest companies.”
He noted the situation may eliminate over 370,000 jobs, which businesses will just not be able to maintain, given the strains of rising energy prices. He noted energy prices in Italy are much higher than in neighboring countries, and this is an unbearable strain on small and medium sized businesses.
Sangalli said, “In terms of energy costs, our hotels, bars, restaurants and stores will pay 40-60% more on their bills this year than in Germany, and three times that than in France.”
He further noted many of these businesses were already reeling from the loss of business caused by the Covid-19 pandemic.
He noted Italy will need, “good reforms and good investments” that will “make our country work better and in a simpler way,” as he called on government to re-implement some of the support programs for businesses which it utilized during the height of the coronavirus pandemic.
As it is being wracked by an energy crisis, Italian businesses have also been enduring record inflation. In August inflation hit 8.4%, driven largely by energy costs. Italy imports nearly 75% of its energy, and is dependent on market prices and supply. At the beginning of the year, it imported nearly 40% of its natural gas from Russia but in July sanctions slashed that amount to 25%. Then earlier this month Italy lost almost all of that when Gazprom halted supplies from the Nord Stream 1 pipeline due to technical problems.
A recent survey found over 70% of Italians are either having difficulty, or are entirely unable to pay their energy bills. Nine out of ten in the survey said they plan to cut their spending on clothing and holidays, as well as cease visiting bars and restaurants, in order to be able to pay for energy.
