The energy crisis will trigger social unrest across Europe as the euro, and the pound have dropped to their lowest levels in decades

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The energy crisis will trigger social unrest across Europe as the euro, and the pound have dropped to their lowest levels in decades

The continuous tensions between Russia and Europe over the Ukrainian conflict and Moscow-Brussels retaliatory sanctions have led European nations to confront their worst socio-economic crisis since World War II as a cold, terrible winter looms large on the horizon.
Since the outbreak of hostilities in Ukraine, the euro’s value against the dollar has plummeted to its lowest since December 2002, falling below $0.99 in recent days.
Rodrigo Catril, a senior foreign exchange strategist at National Australia Bank, said, “The euro has more downside given the full impact of the indefinite cut in Russian gas supply to Europe is yet to come.” Catril added, “No gas means no growth [for the EU].”
Meanwhile, Goldman Sachs Group Inc. analysts led by Kamakshya Trivedi cut their forecasts for the euro to 97 cents over the next three months.
Meanwhile, the British pound dropped to its lowest level against the US dollar since 1985 due to the continuing energy shortage and ambiguity about Liz Truss’ economic policy. Economists believe the fall of the euro and the yen against the dollar contributed to the pound’s unprecedented downturn.
Economists project that Europe is rapidly approaching a period of gloomy economic growth slowdown and inevitable recession in light of the European Central Bank (ECB)’s decision to raise interest rates to contain inflation, which has exceeded 9.2% in the European Union and over 10% in the United Kingdom.
Additionally, the inflation rate is expected to approach 20% due to the hike in fuel prices.
Following the statement by Russia’s state-owned Gazprom that it will cease providing gas to Europe through the Nord Stream pipeline, the EU countries, namely Germany, adopted urgent steps to address the plight of soaring living costs and rising energy prices.
Apart from the calamitous implication that the crisis of cutting off Russian gas to Europe through the Nord Stream 1 pipeline has had on the economies of European nations, the emergence of such a dire situation would result in the reduction of industrial production and a concomitant increase in the unemployment rate across Europe.
This apocalyptic scenario will ultimately spark social turmoil and widespread protests.

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