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European Shutdown

There is no other major economy much impacted since the outbreak of the conflict between Russia and Ukraine than Europe. The majority of the impact is not only limited to the short nature but the fundamental fragmentations that have created not so much of a Union are left.

There is Hungary that is not okay with the oil and gas embargo on the Russian supply and other members are not comfortable with the finances that have been planned to help reduce the impact of the oil embargo.

The problem then elevates to the current season of sowing, with gas prices at double last year's price. The fertiliser prices have gone beyond the affordable for the farmers. And since Europe is driven by large land-holding farmers and corporates these costs are more impactful.

Reduction in gas, fertilisers, and near-future shortage of food brings two costs one is the replacement of the shortage and the price it is going to be replaced.

And the longer these fluctuations remain the uncertainty will drive the demand and new orders down and might be more downward pressure than estimated. Many would imagine the inflation to come down but if it does not then Europe will be going through a long depression.

This would put major pressure on the banking system that is preparing for a rate hike next month and with this level of a pressure rate hike even though delayed by months will cause a crisis of unimaginable pain to the consumers and eventually the economy for a long duration.


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