Severe winter risks triggering social unrest in Europe, IMF warns

Europe could face social unrest in the event of a cold winter, the head of the International Monetary Fund (IMF) has suggested, as Brussels plots a 140bn euro (£121bn) raid on the energy industry to help solve the crisis.

Kristalina Georgieva, managing director of the International Monetary Fund, raised the specter of unrest in Europe if the winter turned out to be particularly “harsh”.

“There is certainly a fear of recession in some countries, or even if it’s not a recession, it would look like a recession this winter,” she said.

“If Mother Nature decides not to cooperate, and the winter is actually harsh, it could lead to social unrest.”

Ms Georgieva said the European Central Bank needed to be “mindful of the need to keep the economy going” while tackling inflation.

The comments came as the EU unveiled a plan to cap electricity producers’ revenues and plunder the profits of oil and gas producers.

Ursula von der Leyen, President of the European Commission, said it was “wrong” that companies were making record profits amid energy shortages due to Russia’s war on Ukraine, and that the money should be shared.

She outlined plans to cap energy sales from nuclear plants, wind and solar farms at €180 per megawatt-hour, well below half of current prices, and to tax oil, gas, coal and refining companies 33% of their excess profit.

The Commission also proposes a target for countries to reduce their electricity consumption by 5%, to try to save electricity and gas.

Cuts in Russian gas supplies to Europe since the invasion of Ukraine have upended energy markets, triggering a cost of living crisis in Europe and the UK and forcing some heavy industries to stop their production.

Mary I. Bruner