The year the economic recovery shook the world economy

As the world began to adapt to pandemic normality, as lockdowns gave way and vaccines arrived, the long-awaited economic recovery has been threatened by a historic energy price crisis and bottlenecks in multiple sectors that threaten to move to 2022 Energy moves the world and when the economy began to wake up from the lethargy of the coronavirus, high demand, especially in Asia, began to skyrocket the prices of gas and electricity, but also oil and coal. Added to a bad meteorological year for renewable generation, geopolitical tensions with Russia as the protagonist, the fall in investments in the energy sector during the viral paralysis and the rise in the price per ton of CO2 emitted in the European Union, the The world, and the EU in particular, is witnessing an energy crisis that has not been known since the 1970s.

"These two issues are extremely important because they are both creating inflationary pressure.", explains to EFE the analyst of the center of thought Bruegel Simone Tagliapietra. This mismatch has been transferred to prices, increasing the cost of living in the EU to about 5% year-on-year at the end of 2021, a maximum since there are records. The director of the European Agency for the Cooperation of Energy Regulators (ACER), Christian Zinglersen, convened in December the energy ministers of the EU countries that he does not expect energy prices to fall significantly at least until the month of April. Tagliapietra predicts that, in the short term, governments will have to allocate more resources to "shield vulnerable consumers", which will weigh on taxation while in the long term the solution is to deploy "more renewable to be more protected" of these and future oscillations. But despite the energy shortage, which is expected to worsen with a cold winter, the European Commission predicts that the EU’s GDP will advance by 5% in 2021, to continue growing strongly in 2022 (4.3%) and somewhat less in 2023 (2.5%).

"However, this good growth rate faces new difficulties. Bottlenecks and global supply shocks are weighing on activity in the EU, especially in the highly integrated manufacturing sector", the Commission warned in its autumn economic forecasts, published last November.


Supply chain bottlenecks will linger into 2022 and threaten to become a drag on economic recovery, analysts anticipate. The Bank of Spain, for example, believes that it can subtract between 0.5 and 0.9 points from the growth of Spanish GDP. The rapid recovery of global demand after the first wave of coronavirus, bad weather in Taiwan or Texas that affected chip production and the blockage of the Suez Canal when the EverGrande ship ran aground are at the origin of the shortage. The explosion of orders triggered the price of containers for maritime transport and, together with the lack of personnel, made transport more expensive and difficult, on which 80% of world trade depends. What some experts have dubbed "Perfect storm" It caused many European industries to deplete their reserves of wood, plastic, metals, medicine or other raw materials, forcing activity in certain sectors such as the automobile to be slowed down or paralyzed.

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"Mutating the virus will only worsen our supply chain problems", warns Tagliapietra.


The main problem for Europe is the shortage of semiconductors, essential to make the chips on which all electronic devices depend, from mobile phones, to car navigation systems, to video game consoles or industrial machinery. The situation has been a wake-up call for a European Union that has digitization as its primary objective, but represents only 9% of the global chip market and depends on Asia for its manufacture. As in other regions of the world, the European strategy to reverse the situation is to attract production to its territory and diversify supplies. The European Commission is committed to building a mega-factory for chips in the EU and will make it easier for governments to subsidize a task with which it hopes to double its production of chips so that by 2030 two out of ten in the world will be "made in Europe".


All of this has reinforced the efforts of the European Union to try to embark on a relocation of sectors that range from chips or electric batteries to medicines, in a bid to gain strategic autonomy that will not be immediate since plans have yet to move from the strategies drawn up in Brussels to the real economy.

"That is long-term resilience. Countries that can dominate these essential industries in the decarbonized economy will be more competitive", so that "it is vital for Europe to develop production capacity in these technologies, also from a security point of view, as it will be less dependent", says Tagliapietra.


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