Hard Times in Europe: An economic policy of shared sobriety

The war started by Vladimir Putin in Ukraine has brought an end to a complacent energy market that accepted Russia as its main supplier of fossil fuels. His decision to invade a European country has caused the EU to ban the purchase of Russian energy. When Brussels imposed severe sanctions on the aggressor, the Kremlin in turn responded with an embargo on the gas it supplied to EU member states.

This situation has caused a rupture, a disconnection with the energy aspect only the tip of the iceberg. It is a geo-economic change that has repercussions on international relations, markets, supply chains, prices and lifestyles. Quite a few countries are rethinking almost all aspects of their foreign policy, trade, defense spending and military alliances. As a result, energy security has joined climate change at the top of the list of national governments’ main concerns. It has become imperative to reconcile these two objectives.

This war, which broke out on the 75th anniversary of the Marshall Plan, has led to a strengthening of transatlantic ties and caused the EU to close ranks, showing a capacity for international action that was unthinkable before Russian aggression, in a world that seems to have reached a turning point. In fact, “deglobalization” is marching ahead at an ever faster pace and a new period of stagnation and inflation seems inevitable.

The relentless waves of Covid-19, the recent effects of climate change – tremendous droughts, floods and devastating fires – and war which first blocked and then hindered the export of grain and raw materials – have made it necessary to find economic solutions that guarantee health, the purchase of food, and the ability to heat and warm ourselves at reasonably affordable cost. Will the economic policy responses be effective?

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