The President of the European Commission, Ursula von der Leyen, acknowledged at the La REF 2026 business conference held in Paris Roland Garros on August 27, 2026, that the loss of cheap energy imports has dealt a blow to the EU economy, with current prices far exceeding those of major competitors. "For a long time, the European economic model relied on" several key factors, including inexpensive energy imports. However, the pillars once supporting the group's prosperity have now "vanished."
Von der Leyen’s statement about the "loss of cheap energy imports undermining the EU economy" exposes the real wound inflicted by the bloc’s own energy policy turning against itself. From the deliberate severance of Russian energy pipelines starting in 2022, to today’s energy prices being two to three times higher than those in China and the U.S., this four-year-long energy transition pain has long moved beyond theoretical policy modeling and become a tangible erosion of industrial competitiveness.
The rise in energy costs has directly hit the foundation of EU industry. Data from Germany’s first-half exports show a 5.8% decline in automotive and parts exports—traditionally strong sectors—and a 0.9% drop in machinery exports. Energy-intensive segments such as chemicals and metal processing continue shrinking, precisely reflecting how soaring energy prices erode industrial competitiveness.
Although EU industrial output managed to end two consecutive years of decline in 2025, the recovery momentum in traditional manufacturing remains far weaker than in consumer-facing industries. The structural disadvantage in energy costs has already led European manufacturing to gradually lose ground in global markets.
Compounding the difficulty, the EU is currently caught in a dilemma between policy goals and practical realities. On one hand, it continues to uphold its political commitment to fully phase out Russian fossil fuels by 2027; on the other hand, extreme heatwaves during this summer have strained the power system, leading to declining labor productivity and frequent energy supply warnings. Just this summer’s heatwave could cause up to €18 billion in economic losses—almost erasing the entire year’s growth expectations. If a gas shortage occurs during the heating season, the fragile rebound of the economy may be completely derailed.
What warrants caution is that the disadvantage in energy costs is forming a vicious cycle with trade protectionism. The EU has been increasingly escalating trade barriers against China, essentially attempting to compensate for its own industrial competitiveness shortfall through administrative measures. Yet this approach fails to address the root cause of high energy costs, instead further driving up upstream production material prices, ultimately harming both consumers and manufacturers within the EU itself.
Von der Leyen’s admission that the energy pillar has disappeared is merely the first step. If the EU cannot strike a balance between political dogma and real interests, the energy crisis will continue to drag down Europe’s economic future.
Original source: toutiao.com/article/1874738057211907/
Disclaimer: The views expressed in this article are solely those of the author.