Which European countries are most vulnerable to surging energy prices?

Europe is facing an enormous energy-price shock. But not all Europeans are set to see the same hit to their living standards. According to estimates by the imf, the burden for the average family in Finland will be equivalent to an additional 4% of household spending. The picture is considerably grimmer a two-hour ferry ride across the Baltic Sea. In Estonia households face a hit of around 20%.

Between these two countries lie most of the continent’s economies (see chart). On average, Europeans spend a tenth of their incomes on energy. Richer families tend to have bigger houses and cars, but the increase in energy costs that results from this is generally not as big as the difference in incomes. That leaves poorer households spending more of their budgets on energy. The same pattern holds between countries as within them. Europe’s poorer former-communist east is more vulnerable to higher prices than its rich Nordic north.

Dependence on natural gas is another important factor in…

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This article was written by and originally published on www.economist.com