Italians await winter with fear amid soaring prices

ROME

Italians are looking at the coming winter with a mix of fear and disillusion amid soaring energy and food prices and electoral promises after the country was plunged again into political instability. 

With early elections slated for Sept. 25, after the unexpected collapse of the national unity government led by Premier Mario Draghi, most Italians and small business owners do not expect concrete answers from politicians to daily problems.

Italy has been hit hard by surging inflation stemming from the Ukrainian war, which has pushed global energy prices higher, causing food shortages and disrupting supply chains.

In June, the year-on-year price increase reached 8%, the highest in Italy since the creation of the euro currency in January 1999.

The Draghi government stepped in to shield families and companies from price hikes, approving more than €50 billion ($50.8 million) in aid to soften the effect of electricity, gas and fuel costs on consumers’ bills.

But many fear that will not be enough.

“We’ll be probably forced to close our activity because we won’t be able to handle this situation,” said Luciano Massarri, 72, owner of a butcher shop in Maccarese, a small town a few kilometers from Rome. “We are not expecting any real help, the government doesn’t care.”

Massarri notes that electricity costs have already reached “unsustainable levels,” with bills rising to €1,400 ($1,424) and he expects the situation to worsen in the fall.

“I have four fridges that need to be active all the time. It’s impossible to switch them off. What am I supposed to do?” he asked.

Italy’s National Consumers Union said a slowdown in prices in the coming months is only “a mirage.”

In the third quarter, electricity prices have grown by more than 80% compared to the same period last year, while gas prices will rise 46%, according to the Union’s forecasts.

“We don’t have to deal only with the gas and electricity hikes, but also with the increase in the cost of raw materials, starting from flour,” said Ciro Biancolino, co-owner of a pizzeria in central Rome.

“We hope that, since we worked a lot this summer, we’ll be able to put something aside to face the tough winter ahead,” he added.

Draghi said the price increases will be limited by the government’s steps and predicted that despite the challenges, the economy this year will still grow faster than those in France and Germany — the two largest economies in the euro area.  

EU energy reduction plans

In response to fears that Russian President Vladimir Putin will cut off gas supplies, the European Union has already agreed to trim energy use by 15% from August until March, but single countries are taking different approaches.

For now, the measure is voluntary, but in case of a severe shortage or exceptionally high demand, the 15% reduction target will become mandatory under the so-called Union alert — an unprecedented scheme that could lead to painful sacrifices.

“The war in Ukraine is not a situation that is going to be solved soon,” said Erminio Modulon, a pensioner living in Fregene, a beach town close to Rome.

“We are saved by the fact that we’re still in the summer, but what is going to happen in November and December?” he asked.

The surge in electricity prices has already shown its effects, reverberating in bills.

This quarter, an average Italian family will see its costs almost doubled, with electricity bills rising from €155 to €282, according to consumers’ associations.

Silvana Battista, 72, the owner of a bar in the lively Monti neighbor in central Rome, also manages a 12-room hotel in the area.

“Awaiting the government’s solutions to our problems is an illusion,” she said. “Unfortunately, it’s us, the small businesses, that pay the higher price.”

Battista said she recently received an electricity bill for €1,800 for just one month, which would end up killing her business in the long run.

“We cannot even change prices on the menu slightly, otherwise clients would run away,” she said. “This autumn is going to be hard. We won’t have a government yet and then, with the new one, we’ll start from scratch, once again.”

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