The economists of the European Central Bank (ECB), in an article published on their official blog by experts Óscar Arce, Gerrit Koester and Antonella Pierluigi, conclude that the Eurozone has weathered the energy crisis better than expected thanks to the deployment of renewable energies, reduced dependence on fossil fuels, and the boost from artificial intelligence (AI).
Despite this resilience, the report warns that the fiscal space of countries is running out and serious geopolitical risks and inflationary pressures persist.
The buffers against the crisis
The ECB's analysis highlights three structural and cyclical factors that have protected the European economy from the energy shock:
- The shield of renewables and efficiency: the Eurozone's economy now depends on oil approximately half as much as it did in the early 1990s. Furthermore, the advance of solar, wind, and nuclear energy has begun to decouple the price of gas from the cost of electricity. In Spain, for example, the proportion of hours in which gas plants set the price of electricity plummeted from 80% in 2020 to just over 20% in the early months of 2026.
- The boost from Artificial Intelligence: technological adoption and trade linked to AI have become key drivers for the region, boosting industrial orders, exports of capital goods and allowing companies to absorb costs thanks to digital automation.
- Massive fiscal support: government budget support reached 0.5% of GDP, doubling initial forecasts mainly due to Germany's spending on defence and infrastructure and energy subsidies.
Warnings and future risks
Despite the good resilience data, the institution's economists raise three important alerts for the future:
- Lower fiscal cushion: much of the public support is temporary. With the budget margin having been exhausted in several countries, fiscal policy will not be able to cushion future crises with the same intensity.
- Delayed impact on food: in another parallel article, ECB economists warn that energy disruptions and extreme weather will cause a "strong impact" on the shopping basket, driving up the prices of basic products such as cereals, bread, pasta, milk, and meat in the coming months, with projections placing food inflation at 3.4% for 2027.
- Necessary measures: to limit exposure to geopolitical volatility, the ECB insists that Europe must accelerate the green transition, increase investment in distribution networks, and strengthen the cross-border electricity interconnections of the bloc.
