Written by: Alex Pollock
Article source: www.incontextinternational.org
The [Russia-Ukraine] war will have severe economic consequences for Europe, having struck when the recovery from the pandemic was still incomplete. Large increases in commodity prices and compounded supply-side disruptions will further fuel inflation and cut into households’ incomes and firms’ profits. GDP growth for 2022 has thus been marked down by no less than 1 percentage point with respect to the January 2022 World Economic Outlook Update forecasts in most countries, with far larger output contraction anticipated in Russia and especially in Ukraine.
Inflation is projected to hit a multi-decade high in many countries. And new risks loom from escalating fighting and disruptions to critical energy flows. For Europe’s policymakers the main challenges are clear: caring for the refugees; helping vulnerable households and firms cope with higher spending on energy; beefing up energy security; and, in concert with social partners, ensuring that wage and price expectations remain well anchored. The war and its aftermath will also add to the structural challenges facing post-pandemic Europe. (International Monetary Fund)
Europe’s energy crisis
Europe currently faces a slew of challenges of unprecedented proportions as several nations battle an energy crisis, drought conditions, and political and social distress; all while trying to respond well to the Russia-Ukraine conflict on its eastern border.
On Friday 2 September, Russian gas company, Gazprom, shut down the Nord Stream 1 pipeline indefinitely, further exacerbating Europe’s energy crisis. When fully operational, the Nord Stream 1 pipeline supplied nearly 40% of Europe’s gas supply. Now with the pipeline shut for maintenance, Europe will have to speed up efforts to wean itself from dependence on Russia’s fuel supply. In the last year, gas prices in Europe have soared by 340%. Many European countries are accusing Russia of shutting down the pipeline as a retaliatory response to Western sanctions over its invasion of Ukraine, an accusation that Russia denies.
Whatever the reason for the shutdown, Europe will have to find yet another source of energy as it prepares for winter, a time when demand for fuel and electricity is at its highest. It is estimated that gas prices will climb another 60% during the winter months. In response to rising fuel costs, as well as an overall rise in the cost of living, many European countries, as well as the European Union (EU) are proposing ideas to lessen the impact on families, many of whom are still struggling to recover from the economic effects of the coronavirus pandemic.
Among the most popular proposed solutions is a price cap on Russian gas and households reducing their use of electricity and fuel. The energy ministers of several EU-member countries held a meeting on Friday 9 September to discuss potential bloc-wide responses to the many crises facing the continent. In that meeting, little was accomplished other than reiterating that a quick solution is needed.
Support was split over the capping of the price of Russian oil, as some EU countries are more reliant on Russian oil than others, and it is feared that if a cap is introduced, there will be a total cessation of supplies from Russia. Widespread support was given for the separation of the cost of fuel and other energy sources, but the specifics of such a separation are still to be determined.
Despite these efforts, the EU has been criticised for waiting so long to propose its solutions. European Council President Charles Michel and Belgian Prime Minister Alexander De Croo both released separate statements accusing the EU of waiting far too long to produce a joint proposal. Other concerns over an EU response are focused on the potential that countries will reverse progress on climate change goals to keep fossil fuel plants in operation longer than previously planned to make up for lost energy production.
In conjunction with EU response plans, many individual European countries have put forth their own relief plans as well. Germany recently announced it would spend at least €65 billion to prevent the collapse of utility companies and help maintain energy costs for households and businesses. Many governments are also asking citizens to reduce the amount of energy they use by carpooling, turning down thermostats, and driving less. However, going into a winter season predicted to be very cold due to the ongoing effects of climate change, many households are struggling to lower energy use and electricity bills are continuing to rise despite these efforts.
The attempt of governments to ration the amount of electricity used is reminiscent of the crisis faced by the West in the early 1970s during the Arab oil embargo. After the United States sent aid money to Israel following the Yom Kippur War, the Organisation of Arab Petroleum Exporting Countries (OAPEC) issued an oil embargo against the United States, increasing prices and cutting oil production, causing ripple effects across much of the Western world, including Europe. During this period, caps on energy use were implemented such as car-free Sundays, fewer and dimmer streetlights, and reduced television broadcasting.
While there are some similarities to the 1970s embargo, Europe’s current crisis spans much further than just oil shortages. According to International Energy Agency (IEA) executive director Fatih Birol, Europe is facing an unprecedented ‘perfect storm’ of circumstances. “We are in the middle of the first global energy crisis,” Birol said. “The world has never witnessed such an energy crisis in terms of its depth and consequences. It is interwoven by many factors including geopolitics, and I believe we may not have seen the worst of it yet. This winter in Europe will be very, very difficult.”
The worst drought in 500 years
One benefit that Europe has now that it did not have during the crisis of the 1970s is the diversification of energy resources. Hydropower is the most prominent renewable energy source in Europe, with an average of 660 TWh generated across the continent in 2021. However, as two-thirds of Europe is currently experiencing the worst drought conditions in over 500 years, the ability for hydropower to continue to serve as a major energy generator is drastically diminished.
The most recent report from the Global Drought Observatory found that 47% of Europe is under a “drought warning,” meaning the soil is critically dry. Another 17% is under a “drought alert,” meaning that the vegetation in the area is showing signs of stress. The Observatory warned that such conditions can lead to wildfires and the significant loss of crops. When compared to the last five years, Europe’s grain maize harvest is down by 16%, soybeans by 15%, and sunflowers by 12%. All of Europe’s rivers have faced some level of drying, causing the production of hydropower to drop by approximately 20%. These conditions are expected to last at least until November, and Italy, Spain, Portugal, France, Germany, the Netherlands, Belgium, Luxembourg, Romania, Hungary, northern Serbia, Ukraine, Moldova, Ireland and the UK are experiencing the harshest effects, according to the Observatory report.
An Increased Risk Of Social Unrest
Similarly to the 1970s oil embargo, the current crisis is causing an uptick in protests and social unrest in many often calm European countries. Verisk Maplecroft, a global risk and strategic consulting firm based in England, released its latest report on global civil unrest predicting that European countries could see an increase in serious civil unrest in the coming months. The Netherlands, Switzerland, and Bosnia-Herzegovina are at the top of the list of countries with the highest risk for escalated unrest. The combination of the energy crisis, the rising cost of living, and potential rolling blackouts, along with the lingering effects of the pandemic all played a role in Europe’s overall risk assessment.
Protests have already taken place across multiple European countries as governments struggle to find quick and efficient solutions. The Czech Republic’s capital of Prague was the centre of protests recently as over 70,000 people gathered to voice their discontent with the cost of living, demanding that the Czech government end sanctions against Russia. People from both sides of the political spectrum are urging the Czech government to rework its policy against Russia to increase gas supply and halt all weapons sales to Ukraine.
The German cities of Dusseldorf, Cologne, and Berlin also hosted protests following Russia’s continued closure of the Nord Stream pipeline. Protesters also called for an easing of sanctions and a ban on weapon sales to Ukraine. Despite Germany’s recent plan to help ease the cost of fuel and electricity, German citizens are criticising the government for using so many resources to aid Ukraine rather than working to ease the burden on the German population. This argument of European countries focusing too much on Ukraine and not enough on their own population is also gaining traction and fuelling protests in Spain, Belgium, and France.
Workers from multiple sectors, including transportation, aviation, and healthcare, are participating in strikes arguing for higher wages due to skyrocketing inflation. According to Naomi Hossain, a professor of development politics at the American University in Washington DC: “When people start complaining en masse about their inability to pay for their basic needs and must choose between heating or eating, it can overturn governments. Often an energy protest turns into a political protest, like in Sri Lanka, where an uprising against an economic crisis led to the unseating of the president. Such unrest can also see far right or left-wing parties capturing the political energy from discontent.”
Many European countries are also in the process of either electing or acclimatising to new leadership, which also has the potential to ignite public unrest. There has been a steady rise of far-right parties and politicians gaining ground all around Europe, and the political landscape of the continent is arguably the tensest it has been in decades. The pressure for European leaders to quickly and efficiently address the many issues facing the continent is high, and if they fail to do so, the consequences could be far-reaching for the social stability of Europe as a whole.
From A Christian Perspective
Europe has a long Christian history and was once a highly religious continent. However, over the past few decades, the number of people who genuinely adhere to faith has declined significantly. A Pew Research study found that the number of practising Christians has decreased, and more than half of the population in Western Europe identifies as “non-religious” or “non-spiritual” yet when asked “What is your present religion if any?” over half responded with Christian. Despite a high percentage of proclaimed Christians, a much smaller percentage of the population of Western Europe regularly attends church. In the UK, there are three times as many Christians who do not attend church, referred to as non-practising Christians (55%) than those who do regularly attend, referred to as practising Christians (18%).
Non-practising Christians outnumber “non-religious” people in the UK. A similar trend is seen in other European countries as well. Such a dynamic can make ministry difficult among Europeans, as they can often get to the point of thinking they do not need God, or that since they are “culturally Christian” they have secured salvation. However, Jesus tells us in John 14:6, that there is only one way to secure salvation: “I am the way and the truth and the life. No one comes to the Father except through me.”
The practising European Church has the opportunity to reach out to those who are suffering during this time of crisis, by demonstrating what it looks like to genuinely follow Christ. Crises such as those Europe is currently facing can often be a catalyst for Church growth, as the things that people tend to put their confidence in are shaken. This slew of crises is relatively unheard of in Europe, especially in modern times. Many people’s livelihoods are being challenged, and the global Church can pray that this will turn people’s hearts to the only secure hope, which is Christ.
As many in Europe may not have experienced such circumstances before, the Church can pray that they will meditate on the words of the Apostle Paul, written to the Philippian Church: “I know how to make do with little, and I know how to make do with a lot. In any and all circumstances I have learned the secret of being content—whether well fed or hungry, whether in abundance or in need. I am able to do all things through Him who strengthens me.” (Philippians 4:12-13 CSB)
The Conference of European Churches released a statement as the continent was struggling through the end of the coronavirus pandemic, but its principles can apply now, as Europe is entering into a new time of various challenges. The statement’s sentiment is to remind the Church that it should pursue an active role in helping society recover from adversity.
“The current crisis will not simply end today and be gone tomorrow. Although we do not yet know the full extent of the crisis, we are called to think about tomorrow. The hope for a ‘new Jerusalem’ does not allow us to become idle spectators. On the contrary, as churches, we should actively contribute to shaping the future of Europe. This includes a sincere and open discussion in our churches, in a fraternal spirit, which takes on board the great challenges regarding the making of a socially just and unified Europe. We are living out the Christian hope that ‘God makes all things new.’ Our hope unites us and encourages us to share and contribute to a just world through our Christian traditions, our experience of democracy and our appreciation for the value of human rights. As it is written in the letter to the Hebrews 10.23-24, ‘Let us continue to hold firmly to the hope that we confess without wavering, for the One who made the promise is faithful. And let us continue to consider how to motivate one another to love and good deeds.’”
Please join us in prayer:
- For European governments to seek godly wisdom in how to respond to the myriad of challenges being faced
- For the European Church to mobilise and make the most of every opportunity presented to bring to more people the hope of Christ
- For the growth of the Church through crisis and adversity, and for each person to find his/her confidence in the Lord, rather than earthly securities
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Date published: 17/09/2022
Feature image: Image for illustrative purposes only. Reppie Waste-to-Energy Facility/commons.wikimedia.org
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