Surging energy prices are posing a growing problem for Europe’s economies. New figures showed that inflation in the eurozone increased to 7.5 percent this month, the highest level on record. In comparison, economic growth weakened to 0.2 percent.
Rising inflation was a key concern in Europe even before the war in Ukraine, as its economies struggled to weather supply chain disruptions and the long-term impact of coronavirus restrictions. The more recent European sanctions against Russia and the rising tensions over fossil fuel imports have further amplified the concerns by spiraling energy prices upward.
Pressure is unlikely to fade. On Wednesday, Russia’s state-controlled gas company effectively shut off the natural gas supply to Poland and Bulgaria, and the Kremlin warned that other countries could face the same fate.