EU economy in turmoil
In a recent interview, Paolo Gentiloni warned that the European Union faces a looming recession in the coming months. Some member states are already contemplating how to ration energy use to cope with the strain.
He acknowledged that a eurozone recession cannot be ruled out. Persistent inflation could push the economy into harder times, with next winter potentially among the most challenging on record. A high level of uncertainty remains, yet overall EU figures still show positive trends, and the labor market has been comparatively strong.
Gentiloni noted that the shift toward reduced energy consumption will hinge on decisions made by European leaders and Moscow’s actions. He stressed that energy conservation is already necessary, even as gas storage levels improve in some countries and efforts to save energy gain traction across the bloc.
Officials have begun implementing substantial measures. By late summer, roughly one percent of the EU’s economic output was directed at offsetting the energy crisis. Additional steps include a German government aid package, with projections suggesting that support measures could represent about two percent of production by year’s end.
Protecting German industry
In a session before parliament, Robert Habeck, a deputy minister of the economy, noted that Russia had halted gas supplies for a week, yet Germany’s gas storage remains full. He emphasized independence from Russian gas, crediting the government for steady and prudent action that has helped achieve this milestone.
Habeck underscored the ongoing challenge of curbing price manipulation in energy markets. He warned that rising costs for gas, oil, and coal could limit the ability of authorities to support businesses and households over the long term. His solution included redesigning the energy market so that consumer prices can be kept fair and volatile highs smoothed out through market mechanisms.
He pledged broad backing for companies as prices begin to fall, with a phased program that prioritizes small businesses and expands across industries in a way that aligns with defined criteria. The overall aim is to shield German industry and the middle class from the worst effects of the crisis.
Habeck also noted that Germany is undergoing its deepest energy crisis since the 1970s, though he stressed that the tasks at hand are larger and more complex than before. Klaus Ernst, head of the Bundestag’s Energy and Climate Committee, attributed the price increases to Western sanctions on Russia and warned of negative outcomes for both the economy and citizens. He urged Berlin to maintain dialogue with Moscow.
Ernst spoke about ongoing energy discussions within the Bundestag and cautioned that Russia bears responsibility for the price surges and their impact. He urged a pragmatic approach, acknowledging that Russia is unlikely to refrain from reactions and that dialogue remains essential.
An exit strategy
At an economic forum in the Far East, Vladimir Putin rejected attempts by the Russian Federation to set price ceilings for energy resources, labeling them as nonsensical. He argued that some parties are seeking to sidestep market forces with administrative actions and warned that such moves would only push global markets higher, including in Europe.
Putin contended that European nations had carved out policies that now place them in a difficult position, calling the sanctions a stalemate. He suggested that the only viable path forward would involve adjustments that reflect market realities.
According to the Russian leader, European countries face demonstrations and debates about energy routes, including calls to reconsider Nord Stream 2. He framed the situation as a moment to rethink strategies rather than press toward quick fixes.