The energy crisis could fragment the European Union

In her State of the Union address on Sept. 14, European Commission President Ursula von der Leyen emphasized European Union unity in response to Russia’s war in Ukraine, noting that the “Union as a whole has risen to the occasion.” This statement largely rings true. The EU’s severe sanctions on Russian central bank assets, oligarchs, and its commercial banking sector, along with measures such as military assistance to Ukraine and protection for its refugees, demonstrate an impressive willingness to act together in a crisis. As the war passes the seven-month mark, however, fractures in European solidarity are deepening, driven largely by turmoil in the energy sector.  

A bleak winter looms for the European Union. As temperatures drop, demand for natural gas will surge, putting pressure on the bloc’s increasingly constrained supplies in the wake of Russia’s cutoffs of exports through and apparent sabotage of key pipelines such as Nord Stream 1. Already, citizens are struggling to deal with dramatic rises in energy costs — residential consumers in Spain, for example, have paid 140 percent more for natural gas, while German and French electricity prices had increased by more than tenfold over the previous year as of late August.  

This energy crunch is causing quarrels among member states. Germany, Spain and Portugal are currently at odds with France over the completion of the MidCat pipeline, which could alleviate Central Europe’s gas supply constraints by linking it with the Iberian Peninsula. French President Emmanuel Macron adamantly opposes the project, arguing that the pipeline is unnecessary and clashes with the bloc’s energy transition goals. However, this opposition likely stems instead from a desire to block competition for French energy exports — an unpromising sign for EU solidarity.   

Fractures are also evident in the debate around sanctions. While the European Commission and most EU member states wish to impose additional restrictive measures on Russia, Hungarian Prime Minister Viktor Orbán is now calling for sanctions to be lifted and blames them for the energy crisis. Despite little evidence to support such assertions, recent protests in Czechia and polling in Italy suggest this sentiment is shared in other member states. More governments, therefore, soon may face pressure from the public to oppose sanctions, casting doubt on the future of EU unity regarding sanctions policies. 

Finally, member states’ domestic economic policy responses to the crisis may undermine EU cohesion. In Italy, where high dependence on Russian gas has contributed to weakened growth prospects and some of Europe’s highest electricity prices, the incoming government promised to introduce tax cuts and higher social spending. Such a loose fiscal policy could raise questions about the sustainability of Italian debt, increasing fragmentation among Eurozone government bond yields. The European Central Bank’s efforts to address this risk through increased purchases of Italian bonds could spark pushback from more frugal member states, replicating the bitter divisions of the previous Eurozone crisis and even casting doubt on the future of a common currency.  

While there is much discussion in Brussels about how to mitigate the energy crisis, no consensus on a way forward has emerged. Fifteen member states recently endorsed a price cap on natural gas imports, but it lacks buy-in from other member states and the Commission. An alternative proposal would have EU member states agree to common gas purchases. This idea has a different set of supporters and detractors, but in either case, member states would need to agree on how to divide gas purchases among themselves. If the EU does not get its act together soon, tensions will only worsen as winter approaches.    

However, a union riven by energy-related conflict is not a foregone conclusion. EU and member state officials are well aware of the risks the energy crisis poses to the bloc’s unity and are working to bolster energy resilience. The European Union is already in a better position than it was a mere three months ago — on Sept. 30, member states agreed to a windfall tax on energy firms, and countries have raced to store gas and diversify away from Russian supplies. In fact, the EU reportedly met its goal of reaching 80 percent of reserve capacity by Nov. 1 early, on Aug. 29. Though variations in storage levels could strain relations in coming months, high rates of gas storage across Europe undoubtedly will blunt the impact of a full gas cutoff from Russia.  

In the long term, the forced move away from Russian fossil fuels could spur Europe to move more quickly toward its goals of energy transition and sustainable energy security. Indeed, these goals are not necessarily at odds with each other — one of the best ways to guarantee Europe’s long-term energy security is to scale up the deployment of renewables.  

This message was at the core of von der Leyen’s speech, in which she put forward a vision of clean, sustainable European energy security. During the address, she announced that the Commission would introduce a Critical Raw Materials Act to support access to lithium and rare earths, along with the creation of a European Hydrogen Bank. The Hydrogen Bank would secure €3 billion investment in the sector and support the REPowerEU plan announced in May, which aims to reduce European dependence on Russian fossil fuels and accelerate Europe’s green transition. 

As European leaders face the daunting task of managing the energy crisis during the winter ahead, it will take adept political compromise to maintain the morale of citizens and their support for Ukraine in its war with Russia. After all, second to her description of the conflict as a war “unleashed by Russia against Ukraine,” von der Leyen identified it as a “war on our energy.” Yet the energy crisis is also an opportunity to reorient toward sustainable, long-term energy security — the EU should heed von der Leyen’s encouragement to focus on clean energy as the best tool to do so.   

Nick Lokker is the research assistant for the Transatlantic Security Program at the Center for a New American Security. His work focuses on European political and security affairs. 

Gibbs McKinley is the executive research assistant at the Center for a New American Security. Her work encompasses U.S. national security and global threats to democracy.