MILAN (AP) — Edoardo Ronzoni inspects a construction site near Milan that he closed in March due to soaring material costs.He couldn’t complete a half-built roundabout at an intersection famous for its fenders because asphalt, cast-iron pipes and concrete were too expensive — prices exacerbated by Russia’s war in Ukraine.
Italy’s public works projects are coming to a standstill just as the EU injects 108 billion euros ($114 billion) into pandemic recovery Money means a construction frenzy.
Rozoni laments that his company has lost its busiest three months and expects the worst to come: “We’re worried we won’t be able to work this year. We’re shutting down all our sites.”
The war accelerated inflation across Europe and the worldenergy pricematerials and food Soaring at a rate not seen in decades.It’s causing sticker shocks at grocery stores, gas stations, electricity bills and construction sites.
Oil and gas prices soar is the main driver of inflation In Europe, which is heavily dependent on Russian energy Power generation and power industry.Inflation in EU-27 is expected to hit nearly 7% this year, leading to slower growth forecasts.
Fishmongers and farmers forced to charge for their catch and crops Even they thought it was astronomical.high oil prices There is the potential to paralyze ground cargo transportation. Bread prices have soared from Poland to Belgium. Protests against rising prices have erupted in places like Bulgaria.While governments have responded with tax cuts and other aid, they face constraints in mitigating the impact of volatile energy markets.
Even thrifty people with backyard hens wonder if the price of the feed is worth the eggs they produce. Alina Czernik, a saleswoman in Warsaw, did the math because she saw the price of grain for her hens jump 150 percent to 200 zloty (45 pound) per 100 kilograms (220 pounds). Dollar).
It’s spreading a sense of futility, especially for those on low incomes.
“I’ve always been a positive person, but now, I don’t see the light at the end of the tunnel,” said Eva Fuchsova, a mother of three who lives in the town of Tuskov in the western Czech Republic.
“I have to tighten my belt. I buy fruit and vegetables, so my kids have everything, but I don’t touch it,” she said.
Economists have called it the perfect storm, one that has stunned as countries unleash spending to stimulate economic rebound from the COVID-19 pandemic.Surging customer demand overwhelms factoriesports and freight yards, leading to shortages driving up prices.
Plus: The war in Ukraine has hindered exports of raw materials like steel and minerals that keep Western Europe prosperous, as well as exports of commodities like grain and seed oilexacerbating global shortages.
Inflation is particularly acute in the countries of Central and Eastern Europe, the closest countries to the Ukrainian battlefield. Prices rose 14.2% in April in the Czech Republic, 12.3% in Poland and 10.8% in Greece. An eye-popping 61% in Turkey, whose currency has lost 44% of its value against the US dollar last year.
Shop workers from Warsaw to Istanbul said customers were cutting back on lower-priced items and forgoing fancy items like fresh flowers and items they could hold off on, like new clothes.
In the Turkish capital, butcher Bayram Koza said his sales were down 20 percent after prices nearly doubled, mainly due to feed costs. This makes livestock farming unprofitable and many farmers are selling and moving to cities, he said.
“Even in Cankyaya (a wealthy area), people no longer buy according to their needs, but according to what they can afford. Those who bought two kilograms of ground beef are now buying up to one kilogram,” he said.
In Rhodes, Greece, fish restaurant owner Paris Parasos gets up at dawn to go fishing to keep costs down.But he still had to raise restaurant prices In the island’s main towns, the price of cooking oil has quadrupled. In addition, cooking gas and electricity bills are three times higher.
“I could lower the quality and use the oil more, but I refuse to do that. We want customers to come back and expect the same quality,” Parasos said.
In Poland, bread prices have risen by 30 percent, drawing shoppers to discount stores. Bakers in Belgium are laying off workers as the price of bread rose 30 cents to 2.70 euros ($2.85).
“I know bakers who work 13 or 14 hours a day to get out of trouble and pay off their loans,” Albert Denoncin, president of the Federation of French Bakeries, told La Premiere radio. “We can do it for a while, but when I hear from World Bank management that this will last until 2024, we won’t be successful.”
In Spain, diesel prices for truck drivers have received some relief as the government has taken some emergency measures, including small rebates and allowing higher fuel costs to be passed on to customers.
Still, the burden is huge. Óscar Baños, who drives his own cargo trailer in the central Spanish town of Palencia, said the price of tires has risen from 400 euros to 500 euros, a new truck cab from 100,000 euros to 120,000 euros and a liter of diesel from 1.20 euros 1.90 euros for the past year. That’s the equivalent of going from $4.80 to $7.60 a gallon of gasoline.
“There’s a lot of uncertainty, not just in our industry, but in the industry as a whole,” Banos said.
European car market also faces price hikes With Ukrainian factories shutting down, sanctions on Russia and an existing global semiconductor shortage, supplies of parts needed to make cars have been constrained.
As a result, average new car prices in Europe are expected to rise by $500 to $2,000 this year, according to Nishant Mishra, associate director of investment research at Acuity Knowledge Partners.
Back in Milan, the roundabout is just one of six non-EU-funded sites that Rozoni has had to close in recent months. He found himself unable to deliver the work at the agreed price.
High costs mean companies won’t bid for public works, including a bridge in Rome that will be the first to be built using EU recovery funds. According to ANCE, the National Association of Construction Workers, as the tender stalls, funding for the infrastructure – worth nearly half of the EU’s 220 billion euros – and the jobs it will bring are in jeopardy.
The government has announced 3 billion euros to help cover the rising prices, but it’s not enough for builders, with costs rising by an average of 40%, but sometimes much more. Iron prices, for example, rose 170 percent, Rozoni said.
“It’s exponential,” he said.
Associated Press reporter Suzan Fraser in Ankara, Turkey; Monika Scislowska in Warsaw, Poland; Joseph Wilson in Barcelona, Spain; Derek Gatopoulos in Athens; Karel Janicek in Prague; Kelvin Chan in London; Paul Wiseman in Washington; Samuel Petrequin in Brussels; and Veselin Toshkov in Sofia, Bulgaria contributed.