Written by: Basant El-Farmawy
The Spanish employers' organization has warned that the significant rise in gas and electricity prices poses a grave threat to the continuation of industrial activity and the stability of the production sector, urging the government to implement an immediate emergency plan to confront this escalating crisis.
Warnings of production stoppages and factory closures
The organization pointed out that the lack of a quick and effective response from the government to address these sharp increases in production costs could lead to a doubling of production stoppages, factory closures, and the implementation of large-scale labor regulation measures. It emphasized the urgent need for exceptional, immediate, and targeted measures specifically for economic sectors that rely heavily and intensively on gas and electricity supplies.
Huge losses in the chemicals and energy sector
Official data and estimates showed that the Spanish chemical sector had accumulated, by last August, additional and surplus energy costs amounting to about 354 million euros, with expectations that these costs will witness a massive jump to reach a full billion euros by the end of 2026. In the same context, organization leaders warned of the potential risk of widespread industrial power outages in the Catalonia region due to the lack of reliance on nuclear energy and the delay in deploying renewable energy projects.
Impact of shrinking profit margins on investment
Data confirmed that the continuous escalation in energy prices leads directly to shrinking corporate profit margins and hinders future investment plans. The organization also considered it unacceptable that Spanish industry should be forced to compete with other European economies under unequal conditions and in an environment characterized by energy costs that exceed those of competitor markets.
