The World Bank is out with a forecast for +0.2% GDP growth in Europe this year and +0.3% in 2023. I expect the energy crisis to last at least through 2024 and risks are two-sided around that but the negative outcomes are dire.
Coming out of that, the focus will have to shift to government balance sheets -- especially if the ECB is out of the QE game. The likelihood of a sovereign debt crisis is high.
In light of all that, European countries are forging ahead with plans to put windfall taxes on the only companies that can provide energy. It's punishing the people you need to help you.
Now I understand that it will still be very profitable for companies to install windmills in Europe for awhile but comments like this along with looming budget tightness sure make it sound like windfall taxes will be permanent.
Meanwhile, there are reports of fragmentation in Europe today around energy policy with Germany preparing to roll out subsidies to households. Others were hoping for a more-united front around a gas price cap.
