The current energy situation, marked by a rise in prices, is “comparable, in intensity and brutality, with the 1973 oil crisis”, said French Economy Minister Bruno Le Maire this Wednesday (9).
The minister ruled out a massive aid plan, such as the one applied during the Covid-19 crisis, as it would “only fuel the rise in prices”, he declared, ahead of a conference on energy sovereignty.
“It would be like pouring gasoline on a fire,” said Le Maire.
“In 1973, this response provoked the inflationary shock (…) forced central banks to massively increase interest rates, which ended growth”, he justified.
“It has a name: stagflation, and it is precisely what we do not want to relive in 2022,” added the French minister, referring to the situation of economic stagnation with rising inflation.
The Russian invasion of Ukraine caused an increase in the prices of oil and gas in the world. The former is currently trading above $120 (R$610), close to its record high, and the latter is at unprecedented levels.
Strongly dependent on Russian gas, Europe is looking for ways to reduce its dependence in the coming months, in a context of rising prices and a US embargo on the lucrative and fundamental Russian hydrocarbon sector.
Le Maire thus reiterated “the good answer” at the European level: increase gas reserves for the next boreal winter (summer in Brazil), diversify sources of supply and protect affected homes and businesses.
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