Wars are fought on many fronts. So far, Russian president Vladimir Putin is winning the energy war. High energy prices, triggered by supply disruptions, have neutered Western sanctions. Russia’s current account balance stands at record highs. Meantime, the same forces are de-industrializing Europe right before our eyes. Industry after industry is throttling back, shutting down, or considering doing so if the energy chaos continues. Britain is staring at the potential shutdown of 60 percent of its manufacturers. Germany and most of Europe are on the same track.
Discussions of how to rebuild Ukraine when the ground war eventually ends are prevalent, but the question of the decade will be how to rebuild Europe’s industrial infrastructure. Industrial facilities and supply chains that use and produce energy can’t easily be restarted once stopped. That’s one lesson, at least, that policymakers should have taken from the Covid lockdowns.
