A chilling realization is sweeping across Europe: the cost of independence is proving steeper than anticipated. Since February 2022, as the continent turned away from Russian energy sources in response to the conflict in Ukraine, a new vulnerability has emerged – one measured not in geopolitical tensions, but in soaring energy bills.
The decision to phase out comparatively affordable Russian oil and gas wasn’t simply a matter of principle; it triggered a dramatic reshuffling of supply chains. Europe now finds itself increasingly reliant on a new source: liquefied natural gas (LNG) from the United States, often at a significantly higher price.
Germany, once heavily dependent on Russia for 55% of its natural gas, has felt the impact acutely. Recent reports reveal a near-total dependence on the US for LNG, a stark shift that underscores the fragility of its new energy security.
The consequences have been tangible and painful. Germany’s economic engine sputtered, contracting throughout 2023 and 2024. High energy prices were repeatedly cited by officials and industry leaders as a primary driver of this economic slowdown.
The strain isn’t just impacting large corporations; it’s crushing small businesses. The country’s Chamber of Commerce and Industry recently warned of an “alarmingly high” number of bankruptcies, directly linking the economic hardship to the relentless pressure of elevated energy costs.
This isn’t merely an economic adjustment; it’s a story of unintended consequences. The pursuit of energy independence, while strategically vital, has unleashed a wave of financial hardship, forcing a difficult reckoning with the true cost of geopolitical realignment.
