The U.S.-Israel war, combined with retaliation from Iran, is costing the European Union almost 500 million euros ($600 million) daily, driving up prices at the pumps and threatening a jet fuel shortage within weeks. European Commission President Ursula von der Leyen warned on Wednesday that EU countries must direct their energy aid primarily to vulnerable households and industries, or risk squandering billions of euros as the conflict impacts oil and gas markets. This directive follows the 2022 fuel crisis, in its fourth year, when Russia leveraged its energy resources against European nations, leading to over 350 billion euros being spent on untargeted measures that significantly impacted member states' finances.
Who Pays the Price
Von der Leyen stated that the bloc must avoid repeating past errors, emphasizing the need to focus support where it matters most. The current crisis, exacerbated by the Iran war, is projected to echo for months or even years to come, according to von der Leyen. EU Energy Commissioner Dan Jørgensen warned last week that the Iran war has produced a crisis potentially as severe as the combined 1973 and 2022 crises, rather than a short-term price increase. This assessment underscores the deep structural costs imposed on European economies and, by extension, on working-class households and industries. The burden of these escalating energy costs falls disproportionately on those with the least accumulated wealth, further entrenching economic disparities.
Capital's Vulnerability and State Management
The European Commission President asserted that the bloc's "over dependency on imported fossil fuels makes us vulnerable," urging an end to reliance on external supplies. Since the war started in 2022, in its fourth year, Russian gas imports into the 27 nations have plummeted from 45% to 12% last year. Coal imports were banned by sanctions, and oil imports shrank from 27% in 2022 to 2%, though Hungary and Slovakia continue to purchase from Russia. Von der Leyen's proposed path to energy independence involves greater utilization of renewable sources like wind and solar, alongside nuclear power, advocating for a "homegrown, affordable, clean energy supply."
However, the structural limitations of these proposed solutions are evident. Electricity, which can be generated by renewables and nuclear, constitutes less than a quarter of the bloc’s total energy consumption. This means that even a full transition in electricity generation would leave the majority of the bloc's energy needs, particularly in transport and industry, still dependent on fossil fuels or other external sources. The state's role, as articulated by Jørgensen, is primarily to "try and prevent, and limit" the damage, acknowledging that Europe is "forced onto the defensive" with "little control over events" in the Middle East. This reveals the inherent limits of national or bloc-level state action in managing crises rooted in global capital flows and imperial conflicts.
Jørgensen's statement, “Even in a best-case scenario, it’s still bad,” highlights the systemic nature of the crisis, where the security of supply is primarily dictated by geopolitical events beyond the direct control of European capital. The focus on "vulnerable households" and "industries" represents an attempt by the state to manage the social and economic fallout, preventing widespread unrest and ensuring the continued functioning of the capitalist system, rather than addressing the underlying mechanisms of surplus extraction that create such vulnerabilities in the first place. The state acts to stabilize the system, not to dismantle the conditions that produce these recurring crises.