01:01 GMT27 February 2021
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    European drivers are happy about the fact that prices for fuel are becoming lower but their joy won't, however, last long, because on a global perspective the fall in oil prices will affect the region's economy poorly, German newspaper Die Welt wrote.

    For the first time, the cost of fuel fell below one euro per liter and the price is likely to decline further at an accelerated pace. Such a situation can be dangerous not only for countries producing oil, but also for economically sustainable European countries, such as Germany, the newspaper reported.

    First, the most fragile states, such as Nigeria, Malaysia and Colombia, will be forced to drastically reduce public spending due to low oil prices, which may result in civil protests and riots. This, for its turn, may lead to the collapse of these states, which means that new refugees will head to Europe, the article noted.

    Second, European countries are now largely focused on extracting shale oil, which in the present circumstances is extremely unprofitable. If the exploration of new wells stops, the whole shale industry may collapse, leading to a shock of the market and to a subsequent sharp jump in prices, the newspaper wrote.

    The crisis in the shale industry will also have unpleasant consequences for the financial markets, as many projects in this sector are regarded as so-called high-yield bonds. Some companies dealing with the extraction of the shale energy have already gone bankrupt, and if the situation does not change, it may result in an imbalance in the banking sector, despite the fact that the financial crisis was partially overcome a short time ago.  

    Moreover, the decline in oil prices will inevitably affect the level of inflation and lead to the growth of the national debt, the newspaper concluded


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