Putting the Cost of COVID-19 in Perspective

What is the Cost of Europe’s Energy Crisis?

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Europe is scrambling to cut its reliance on Russian fossil fuels.

As European gas prices soar eight times their 10-year average, countries are introducing policies to curb the impact of rising prices on households and businesses. These include everything from the cost of living subsidies to wholesale price regulation. Overall, funding for such initiatives has reached $276 billion as of August.

With the continent thrown into uncertainty, the above chart shows allocated funding by country in response to the energy crisis.

The Energy Crisis, In Numbers

Using data from Bruegel, the below table reflects spending on national policies, regulation, and subsidies in response to the energy crisis for select European countries between September 2021 and July 2022. All figures in U.S. dollars.

Source: Bruegel, IMF. Euro and pound sterling exchange rates to U.S. dollar as of August 25, 2022.

Germany is spending over $60 billion to combat rising energy prices. Key measures include a $300 one-off energy allowance for workers, in addition to $147 million in funding for low-income families. Still, energy costs are forecasted to increase by an additional $500 this year for households.

In Italy, workers and pensioners will receive a $200 cost of living bonus. Additional measures, such as tax credits for industries with high energy usage were introduced, including a $800 million fund for the automotive sector.

With energy bills predicted to increase three-fold over the winter, households in the U.K. will receive a $477 subsidy in the winter to help cover electricity costs.

Meanwhile, many Eastern European countries—whose households spend a higher percentage of their income on energy costs— are spending more on the energy crisis as a percentage of GDP. Greece is spending the highest, at 3.7% of GDP.

Utility Bailouts

Energy crisis spending is also extending to massive utility bailouts.

Uniper, a German utility firm, received $15 billion in support, with the government acquiring a 30% stake in the company. It is one of the largest bailouts in the country’s history. Since the initial bailout, Uniper has requested an additional $4 billion in funding.

Not only that, Wien Energie, Austria’s largest energy company, received a €2 billion line of credit as electricity prices have skyrocketed.

Deepening Crisis

Is this the tip of the iceberg? To offset the impact of high gas prices, European ministers are discussing even more tools throughout September in response to a threatening energy crisis.

To reign in the impact of high gas prices on the price of power, European leaders are considering a price ceiling on Russian gas imports and temporary price caps on gas used for generating electricity, among others.

Price caps on renewables and nuclear were also suggested.

Given the depth of the situation, the chief executive of Shell said that the energy crisis in Europe would extend beyond this winter, if not for several years.

Mapped: Which Countries Still Have a Monarchy?

In the wake of Queen Elizabeth II’s death, the question of monarchy is brought sharply into focus.

However, a surprising number of countries have ruling monarchs, and in this visual we break down the kinds of royal leadership across the 43 countries that still have them.

Types of Monarchies

A monarch in the simplest sense is a country’s king, queen, emir, or sultan, and so on. But before diving in, it’s important to break down the distinctions between the types of monarchies that exist today. Generally, there are four kinds:

① Constitutional Monarchy

The monarch divides power with a constitutionally founded government. In this situation, the monarch, while having ceremonial duties and certain responsibilities, does not have any political power. For example, the UK’s monarch must sign all laws to make them official, but has no power to change or reject new laws.

Here are some examples of countries with constitutional monarchies:

🇯🇵  Japan
🇬🇧  United Kingdom
🇩🇰  Denmark

② Absolute Monarchy

The monarch has full and absolute political power. They can amend, reject, or create laws, represent the country’s interests abroad, appoint political leaders, and so on.

Here are some examples of countries with absolute monarchies:

🇸🇿  Eswatini
🇸🇦  Saudi Arabia
🇻🇦  Vatican City

③ Federal Monarchy

The monarch serves an overall figurehead of the federation of states which have their own governments, or even monarchies, ruling them.

Here are some examples of countries with federal monarchies:

🇦🇪  UAE
🇲🇾  Malaysia

Malaysia is a unique form of federal monarchy. Every five years, each state’s royal leaders choose amongst themselves who will be the monarch, or the Yang di-Pertuan Agong, of Malaysia and the respective states. Furthermore, the monarchy is also constitutional, allowing a democratically elected body to govern.

④ Mixed Monarchy

This is a situation wherein an absolute monarch may divide powers in distinct ways specific to the country.

Here are some examples of countries with mixed monarchies:

🇯🇴  Jordan
🇱🇮  Liechtenstein
🇲🇦  Morocco

Interestingly, Liechtenstein is the only European monarchy that still practises strict agnatic primogeniture. Under agnatic primogeniture, the degree of kinship is determined by tracing descent from the nearest common ancestor through male ancestors.

Kings, Queens, Emperors, and Sultans Around the Globe

Now let’s break down the different monarchies country by country:

Constitutional monarchies are undoubtedly the most popular form of royal leadership in the modern era⁠, making up close to 70% of all monarchies. This situation allows for democratically elected governments to rule the country, while the monarch performs ceremonial duties.

Most monarchs are hereditary, inheriting their position by luck of their birth, but interestingly, French president, Emmanuel Macron, technically serves as a Co-Prince of Andorra.

Another unique case is the Vatican’s Pope Francis, who has absolute power in the small independent city⁠—he gained his role thanks to an election process known as a papal conclave.

The Role of Monarchies

One of the most notable and famous ruling monarchies is the United Kingdom’s House of Windsor⁠—also known as Queen Elizabeth II’s family. King Charles III has now ascended to the country’s throne, making him head of state in 15 nations total, including Canada, Australia, and New Zealand.

Many see the benefit in having a stable and consistent form of tradition and decorum at the country’s head of state.

“The Crown is an integral part of the institution of Parliament. The Queen [now King] plays a constitutional role in opening and dissolving Parliament and approving Bills before they become law.” – British Parliament

Japan’s royal family has been a prime example of stability, having reigned in the country for more than 2,600 years under the same hereditary line.

Critiques and the Future of Monarchy

Some claim, however, that there is no function of monarchy in the modern day, and complaints of monarchies’ immense wealth and power are rampant.

For example, according to the Dutch government, King Willem-Alexander’s budget for 2022, funded by the state and thus, taxpayers, comes out to more than €48 million.

Beyond tax dollars, with absolute monarchies there is typically a lack of political freedoms and certain rights. Saudi Arabia, for example, has no national elections. Rather its king, Salman bin Abdulaziz Al Saud, stays in power for life, appoints the cabinet himself, and passes laws by royal decree.

The death of Queen Elizabeth, though, may bring about change though for many of the world’s royally-governed. Since Barbados’ removal of her as head of state in 2021, six other Caribbean nations have expressed the desire to do the same, namely:

🇧🇿  Belize
🇧🇸  The Bahamas
🇯🇲  Jamaica
🇬🇩  Grenada
🇦🇬  Antigua and Barbuda
🇰🇳  St. Kitts and Nevis

The future of monarchy in the 21st century is certainly not a guarantee.