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Economy

Europe's Winter Energy Crisis Has Already Begun

In the face of Russia's stranglehold over supplies, the European Commission has proposed support packages and price caps. But across Europe, fears about the cost of living are spreading — and with it, doubts about support for Ukraine.

photo of a protest and people carrying Russian flags

Protesters on Thursday in the German state of Thuringia carried Russian flags and signs: 'First our country! Life must be affordable.'

Martin Schutt/dpa/ZUMA
Stefanie Bolzen, Philipp Fritz, Virginia Kirst, Martina Meister, Mandoline Rutkowski, Stefan Schocher, Claus, Christian Malzahn and Nikolaus Doll

-Analysis-

In her State of the Union address on September 14, European Commission chief Ursula von der Leyen, issued an urgent appeal for solidarity between EU member states in tackling the energy crisis, and towards Ukraine. Von der Leyen need only look out her window to see that tensions are growing in capital cities across Europe due to the sharp rise in energy prices.

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In the Czech Republic, people are already taking to the streets, while opposition politicians elsewhere are looking to score points — and some countries' support for Ukraine may start to buckle.

With winter approaching, Europe is facing a true test of both its mettle, and imagination.


Will we pull through? An overview of the situation in different European countries offers some insight into the troubles faced by the continent.

Poland

Of all countries, Poland – which is rich in coal and relies on it for more than 70% of its energy – is facing a shortage. Its power stations run on coal mainly mined in the south of the country, but until recently the over 3.5 million households that rely on coal ovens imported most of their fuel from Russia.

That is no longer the case, and as coal becomes scarcer, its price is skyrocketing – now sitting at around 300% compared to last year. Add to that an inflation rate of 16.1% in August, and Poles are suffering. Despite a one-off state grant for households that use coal heating, many are fearing a cold winter.

As a result, support for the ruling national-conservative Law and Justice Party (PiS) is waning: Surveys show it at 32%, only slightly ahead of the largest opposition-party alliance.

But so far there have been no mass protests against the government’s approach. The general population and the major opposition parties are largely in favor of strict sanctions against Russia and support for Ukraine.

Czech Republic

In the neighboring Czech Republic, things look very different.

According to police estimates, Sunday 11 September saw 70,000 people take to the streets of Prague to protest against high energy costs and call for an end to sanctions against Russia. There were lots of Eurosceptic and anti-NATO voices among the crowd, and Prime Minister Petr Fiala accused the organisers of “pro-Russian sympathies”. In his address to the nation, he said that Russia wanted to “destroy peaceful society” in the Czech Republic.

Moscow’s main weapon is energy — and Prague is particularly susceptible. Although the Czech Republic is one of the largest net electricity exporters in Europe, with two nuclear power plants and significant investment in renewable energy, it has also been importing gas from Russia for a long time.

This dependence on the Russian state-owned energy corporation Gazprom is probably the Fiala government’s biggest concern. And inflation here is even higher than in Poland: in July it was at 17.2%. Mass protests have already been announced for October.

Austria

The outlook for Austrian households is grim: The prices of electricity, gas and water are all rising, although at this stage it’s not clear whether this will mean a moderate increase or a tripling of the price. What is clear is that gas tanks are only being filled to 70% capacity and inflation is sitting at around 10%.

Solidarity with Ukraine and unity with EU decisions: yes. But dissenting voices are growing louder.

All this is playing out against the background of the campaign for October's presidential elections contested by the incumbent Alexander Van der Bellen (formerly of the Green Party) and the candidate from the right-wing nationalist pro-Russian Freedom Party of Austria (FPÖ), Walter Rosenkranz.

Austria likes to present itself as an island of neutrality. Solidarity with Ukraine and unity with EU decisions: yes. But dissenting voices are growing louder, with three regional FPÖ leaders recently questioning whether sanctions against Russia are achieving their aim. The mood is similar in the Federation of Austrian Industries and the Chamber of Commerce, dominated by the Austrian People's Party (ÖVP).

But the government is standing by the sanctions. According to APA/ATV-“Österreich-Trend”, public opinion is split: 26% are in favor of abolishing all sanctions, while 12% want to relax them. Then there are 39% who want the current sanctions to remain in place, and 20% who are in favor of making them stricter. There is at least one small chink of light: The price of electricity is going to be capped for up to 80% of last year’s average consumption.

Giorgia Meloni

photo of Giorgia Meloni talking into a microphone

Giorgia Meloni is favored to be Italy's next prime minister

Pasquale Gargano/Pacific Press via ZUMA

Italy

Since the earliest days of the war, the Italian people have been divided over sanctions against Russia and supplying weapons to Ukraine.

Italy historically has close ties with Russia, and the country has a deep-rooted pacifism shaped by the Catholic Church. Since Russia’s invasion of Ukraine, politicians have been playing on these sympathies, and now only 43% of the population agrees with the statement that sanctions against Russia are the best approach, while 37% are against.

Worries about rising energy costs are a contributing factor. So far the government has mostly managed to protect consumers from extreme price hikes, but many small or energy-intensive businesses are being overwhelmed and were forced to halt production after the summer break, at least temporarily.

So far there have been no major protests, but Sunday's elections will give new hints as to how long this relative peace will be determined and by what measures the future government introduces to face the current issues.

The Netherlands

In the Netherlands, dissatisfaction is not limited to farmers protesting the government’s mandate to reduce nitrogen emissions. The consequences of the war in Ukraine are also fraying nerves. According to figures from Trading Economics, the inflation rate in August was 12%. Energy prices are also skyrocketing: According to the Household Energy Price Index, in August electricity costs in Amsterdam rose by 22%. Despite that, support for Ukraine remains high.

According to an IPSOS survey in late August, two in five Dutch people are in favor of boycotting Russian gas, even if that leads to further price hikes. One fifth are against. This rejection of Russian gas is not only due to solidarity; it also has a lot to do with the Netherlands’ lack of dependence on Russia, given that the country has the largest gas field in Europe, in Groningen.

But that doesn’t mean it is insulated from energy troubles. After years of disputes with local residents due to earthquakes caused by the drilling, work at the oil field was set to be put on hold this summer. Because of “volatile geopolitical developments”, Hans Vijlbrief, State Secretary for Bergbau, believes that it won’t be shut down until next year or the year after.

To combat energy price rises, liberal conservative Prime Minister Mark Rutte’s government has announced a support package that will see low-income households receiving a one-off payment of 1,300 euros, while VAT on energy is being cut from 21% to 9%.

France

By introducing energy price caps, France has managed to keep inflation under 6%, the lowest rate in the EU. The government, however, is steeling itself for a “torrid winter” of mass protests, with left-wing populist Jean-Luc Mélenchon announcing a “show of force” and a “march against the cost of living”.

According to a recent survey, only one in 20 households will be able to comfortably cover the higher cost of living. Most will have to dip into their savings. 40% of respondents called for the return of the yellow vests movement. Faced with the spectre of renewed protests, the government has been writing blank cheques for months, although this hasn’t succeeded in truly dowsing the ire of the revolution-loving French.

Populist parties on both sides of the political spectrum have already seen historic victories in the parliamentary elections in June, stripping President Emmanuel Macron of his majority. Macron has called for his fellow citizens to prepare for “an end to abundance and carefree living”. Among protesters, calls for a return to abundance have dominated social media, being shared thousands of times online.

Switzerland

Since the start of the war, Switzerland’s position on support for Ukraine has been unique. In line with the country’s stance of “active neutrality”, it adopted the EU sanctions against Russia, but did not allow Swiss-produced weapons to be sent to Ukraine or NATO planes to fly over its airspace.

But Switzerland can’t escape rising energy prices: At the end of August, energy providers announced that electricity prices in 2023 would increase by around 30%, and it could be even more expensive in certain areas. Switzerland’s gas supply could also run low in winter, as the country is completely dependent on imports from neighboring countries.

Switzerland’s position on support for Ukraine has been unique.

So far there have been no major protests, and none are expected. Fabian Eberhard, a Swiss investigative journalist and expert on extremism, says, “As is often the case, until there are more dramatic developments in neighboring countries, Switzerland is unlikely to follow suit.”

Uk inflation protests

photo of protesters in the UK holding a banner of dontpay.uk

Anti-inflation rallies have hit

Thabo Jaiyesimi/SOPA Images via ZUMA

UK

The Brits are naturally a reserved people who don’t often take to the streets. The protest against the Iraq War in 2003 and Brexit in 2016 are two notable exceptions.

Therefore the country has expressed its anger about the rising cost of living in a different way: through strikes. This summer, rail workers and Transport for London staff brought the country and its capital to a standstill for days at a time. In Scotland the rubbish collectors went on strike, while in England it was criminal barristers.

At the Trade Union Congress on September 11, there was talk of coordinated strike action, perhaps even a general strike. This was abandoned after the death of Queen Elizabeth II, as were all other strikes planned to take place during her mourning period.

After her funeral on 19 September, however, the threat of strikes is likely to rear its ugly head once more.

Germany

The first Monday in September saw thousands of people take to the streets of Leipzig to protest against high energy prices and government policy. The Left was keen to be seen as the party of “social protest”, although extreme right-wing groups were almost demonstrating.

The situation is complicated – and politically charged. Protests against Russian sanctions and rising costs are no longer confined to major cities in the east. They have spread throughout the former East Germany and beyond.

Something is brewing in the east, warned George Maier (SPD), Minister of the Interior in Thuringia, four weeks ago in an interview with Die Welt. He said that societal factors were “at the heart of the conflict”, and differences between East and West Germany also play a significant role.

That may well be true. While in West Germany, the majority of the population supports the government’s approach to Ukraine, there was never widespread support for weapons and sanctions in the east. That is clear from the demonstrations. “This is not our war,” said one protester in Arnstadt, Thuringia. He was not convinced by the oft-repeated claim in Berlin that Ukrainians are fighting for freedom across the west. And he is not alone.

Many of the protesters are driven by deep-rooted fears that are far more pronounced in the east than in the west. The main beneficiary of their dissatisfaction is not the Left, but the right-wing Alternative for Germany party, which was at least partly responsible for organising the protest.

At an Alternative for Germany rally in Magdeburg in early September, the party’s leader in the state government, Oliver Kirchner, attacked two journalists from the Central German Broadcasting Foundation for their reporting on events.

Tensions are running high and many local and regional politicians are concerned. “The people are telling us that they see no evidence of serious attempts at peace talks, and all the talk is about supplying weapons. The ideologically-driven government needs to respond to the price rises for gas and electricity. Until that support comes into effect, lots of people are facing unemployment and companies are likely to fold,” says Markus Kurze (CDU), member of the state parliament from Burg in Saxony-Anhalt.

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