With the global economy looking gloomy and financial trade more restricted than ever before in history, government-mandated prices are seemingly coming back with a vengeance. Europe is suffering from significant financial hardships stemming from the Ukraine-Russia war, and just recently the Kremlin disrupted the European Union’s main gas supplies. Now members of the European Commission and G7 finance ministers are attempting to implement price caps on crude oil and electricity.
Axios Editorial Claims Price Control Ideas Are Being Taken up by ‘Influential Economic Thinkers’
The Ukraine-Russia war, following the Covid-19 pandemic and the massive amounts of stimulus produced worldwide, has propelled the global economy into a tailspin. This past weekend, global economists discussed how Russia wants the “collective West” to lift the financial sanctions against the country.
A spokesperson for Vladimir Putin, Dmitry Peskov, claims that the Nord Stream 1 pumping issues are due to the financial sanctions imposed against the country. Reuters reported that “European gas prices rocketed as much as 30% higher,” following Peskov’s statements.
Nearly every single day during the last few months, reports note that “Europe is bracing for a brutal, cold winter,” this year as the price of gas — used to generate electricity and residential heating — has soared to colossal heights. The rising gas prices across Europe have pushed politicians toward reinstating price control regulations not leveraged since the seventies.
The debate over reinstating price controls started to resurface late last year and it sparked many conversations about the subject throughout 2022. With the Ukraine-Russia war, however, the discussions have intensified into a reality.
On September 6, 2022, Axios Markets author Matt Phillips explains in an editorial that mandates on prices are “no longer a 1970s relic,” and the reporter adds that “price controls are back.” Phillips’ editorial discusses the G7 finance ministers’ meeting last Friday and how the members “pledged to put in place a plan aimed at limiting the amount of money Russia makes from oil sales.”
Furthermore, the reporter adds that the European Commission revealed plans last week to initiate an “emergency intervention and a structural reform of the electricity market.” Price controls have been on the minds of politicians worldwide and the trend is taking place in America as well.
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