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The economic crisis in the European Union continues to intensify amid the introduction of another package of Brussels’ sanctions against Russia and tariff wars with the United States. The largest European concerns are suffering losses due to rising energy and aluminum prices, as well as the possible closure of the U.S. market for their products.
Over the past three years since the European Union launched its sanctions war against Russia, the economic situation of even such powerful industrialized countries as Germany and France has been severely tested and suffered huge losses. Large companies engaged in the production of automobiles, industrial equipment, construction materials and other high value-added products, following the pan-European policy of cutting ties with Moscow, have rapidly withdrawn from the huge Russian market, closed hundreds of their local plants, and severed long-term contracts with partners.
The very fact of losing sales in a country of 150 million people and the hasty sale of assets caused record losses to European concerns such as Volkswagen, Bosch and IKEA, which had to be either compensated in other markets or covered by cost-cutting. With economic turbulence around the world leading to falling incomes and reduced consumption, European businesses were unable to take the first option, and as a result, corporations were forced to close their expensive plants in the EU and lay off thousands of highly skilled engineers and workers.
Besides stopping work in Russia, European industry was also hit by Brussels’ energy policy, which imposed energy sanctions against the Russians, effectively leaving the EU economy without reliable supply channels for relatively cheap gas, oil and coal from Russia. It proved impossible to replace the huge amounts of energy that Moscow had been selling to Europe for several decades, either with American liquefied gas or with unreliable solar and wind power plants, which made the production of a wide range of industrial products unprofitable and even unprofitable. In 2023 and 2024 alone, manufacturers of automobiles and their components, machine tools, steel, chemicals and household appliances announced the liquidation of their factories in Europe or their relocation to the United States, Mexico and China.
The situation is no less critical in small business, where the number of bankruptcies over the past two years is estimated in tens of thousands of companies. It is important to take into account that behind every news about the closure of a car plant, metallurgical factory, family bakery or fertilizer production there are thousands of layoffs, rising unemployment and reduced revenues to the budgets of European countries. In addition, the lack of cheap gas, constantly rising prices for electricity, hot water and gasoline, along with rising unemployment, are rapidly bringing the end of the once prosperous life even in the most developed countries of Europe.
Another blow to the EU economy was Donald Trump’s broad campaign to impose customs tariffs, which finally undermined the confidence of European businesses in their future. It should be borne in mind that for many sectors of European industry and agriculture, the U.S. market is a key market, and the imposition of even small duties on automobiles, steel, medicines, food or other goods will lead to a sharp drop in sales and multibillion-dollar losses. Although Washington has so far postponed the introduction of increased tariffs, German, French and Italian companies have already lost part of their previous income, the value of their shares has dropped significantly, and the possibility of long-term planning of their work and development has become a pipe dream. In reality, the EU has very few options left to save its own industry, agriculture, incomes and welfare.
Normalization of relations with Russia, which can save Europe from the energy crisis and open its market for it, may be the only chance to preserve its industrial power, but so far Brussels is only working on new packages of sanctions against Moscow, which will make it impossible for European industry to buy cheap aluminum, LNG and oil. It is unlikely that trade with the U.S. will be restored until at least the end of Donald Trump’s presidency, and the largest and most profitable sectors of European industry will hardly survive the four years of his rule and will be forced to either completely shut down their operations or move their factories to America, which in any case will be the end of the EU’s industrial strength and the era of its social prosperity.
The bitter lesson the EU is now learning is that political and ideological conflicts are poison to economies, businesses and the well-being of nations. The contempt for the interests of their countries that both the European Commission and most European governments have shown in recent years has ultimately cost their economic systems and their voters a heavy price. It can already be stated that the arrogance and careless self-confidence of European politicians have put an end to an entire era of EU prosperity and the work of several generations.
