The crisis hinders the solution

"The 'Market Era' has provided us with unprecedented prosperity during the long peace that it is evident we have not been able to appreciate enough. But the peace has ended.

For decades, the European project was built on this elegant belief, which today may seem naive, namely that the market in its simplicity would be able to satisfy the most pressing desires of people and industries. From the liberalized gas hubs in the Netherlands to the impeccable logistics of aviation fuel, the market has been the supreme arbiter of efficiency, profitability, and well-being. However, that era seems to have reached a brutal structural end, under the shadow of the blocked Strait of Hormuz, a war theater ignited in the Middle East, and a war in Ukraine that shows no signs of ending.

We are no longer just going through a series of unfortunate events. We had barely escaped it (the Covid-19 pandemic had brought the concept to the forefront), but here we are back in the era of "permacrisis" — a state of perpetual and overlapping shocks, in which "urgency" is no longer a deviation from the norm, but the norm itself. While Brent crude has been pushed towards the threshold of 120 dollars per barrel, and QatarEnergy invokes major force for the liquefied natural gas (LNG) that was supposed to save us, Europe has been thrown into a grim march towards a war economy.

The figures published by the European Commission are not mere statistical data; they represent an indictment of our remaining reserves. With gas storage hovering at a precarious level of 30% after a merciless winter, the math for the 2026-2027 season simply no longer adds up. In a functional market, high prices would have tempered subsequent demand and attracted new sources of supply. But in a "permacrisis," there are no new sources to attract. When 20% of the world's oil and a third of LNG are "sequestered" behind a naval blockade, the price mechanism ceases to be a signal and becomes a blunt instrument of destruction. The call from the Commissioner for Energy and Housing, Dan Jørgensen, to European capitals to reduce consumption of gas and electricity has been presented as a "preparatory" measure. In reality, European chancelleries are whispering that it was actually the preview of rationing. When we see flight cancellations move from the stage of inconvenience to that of systemic collapse of the transport sector, it means that the "market" has already failed.

The change we are witnessing is a fundamental migration of power. For thirty years, the European Commission has acted as an arbiter, ensuring competition and preventing monopolies. Today, it is being asked to act as a General Staff. The "defensive options" on the table of ministers meeting in Brussels — mandatory reductions of various percentages of demand, state industrial subsidies, and the potential for a "special aid" fund — represent a total pivot. We are witnessing an "energy covidization." Just as the pandemic forced the state to penetrate the private lives of citizens to manage a biological threat, the current energy shock forces the state to intervene directly at the thermostat of homes and in factory halls to manage a geopolitical threat.

This "war economy" is characterized by brutal necessities. First of all, a centralized command is needed: the era in which national governments bid against each other for the last tank of diesel must come to an end. A common energy purchasing shield at the EU level is no longer a federalist dream; it is a survival requirement for the European project. Then, the thesis of "strategic rationing" must be addressed with maximum responsibility: do we subsidize the heating bill of a pensioner in Athens, Bucharest, or Berlin, or do we keep the BASF chemical plants in Ludwigshafen and the Dacia plant in Mioveni operational to avoid their permanent closure? In a market, the one who offers more wins. In a war economy, the state decides who survives.

The G7's call to avoid "unjustified export restrictions" is a desperate attempt to stem the tide of energy nationalism. However, as budgetary spaces narrow, the temptation to hoard electrons and molecules will become irresistible unless a special European fund is created to socialize the costs of this crisis. The danger of the current moment is the fragile hope that we will "return to normal" quickly, once the drums of war in the Middle East quiet down.

This is the error of the previous decade. Permacrisis suggests that, even if the Strait of Hormuz were to reopen tomorrow, vulnerability has already been exposed, stocks have been depleted, and trust in global supply chains has been shattered. Europe's industrial base is currently facing a 30% energy surcharge (an aggregate estimate of the cost-price competitiveness loss that European heavy industry bears compared to its main global competitors, at a time when supply chains through Hormuz are broken), which threatens a silent and permanent exodus of production to more stable geographical areas. This is not just a fluctuation in the business cycle; it is a tectonic shift. Treating the situation as a temporary price increase means inviting deindustrialization through inaction.

A bitter joke circulates through the offices of officials in Brussels that a future European Council could be canceled because the leaders' flights could be blocked precisely by the fuel crisis they are called to resolve. Is this not a perfect metaphor for permacrisis: the crisis itself prevents the solution.