An article from DWS says there is a case for ‘cautious optimism’ for the continent’s economy.
This, says the firm, is despite a widespread belief the continent is in something of a ‘downward spiral’ against a backdrop of tariffs from the present US administration. It says its belief in Europe is highlighted by its progress on the energy transition married with a growing political willingness to tackle its challenges.
DWS says that, according to Ember Energy’s European Electricity Review for 2025, the continent reduced its fossil fuel import costs by a collective EUR 59bn between 2019 and 2024. The largest reduction by single countries in that time were Spain (EUR 14.4bn) and Germany (EUR 12.5bn).
The company wrote: “Progress on the energy transition is an important leading indicator for Europe’s prospects, particularly when combined with the growing political willingness to act on its challenges. Before the EU elections, former Italian Prime Ministers Mario Draghi and Enrico Letta were tasked to write separate reports on European competitiveness and the Single market.”
DWS did acknowledge some scepticism.
It wrote: “Readers might be sceptical of reports by elder statesmen, but their recommendations were hard wired into the new Commissioners’ job description or ‘Mission Letters.’ A Declaration from all EU heads of state also signals political willingness for change. And the Commission’s work plan sets priorities for innovation, decarbonisation, and security, pledging to strengthen Europe’s workforce, capital, savings and the Single Market.”
Going back to that European Electricity Review, it was said by Ember Energy that the continent’s power sector gained momentum last year despite challenging political and economic conditions.
Solar, it wrote, was the fastest growing EU power source last year, with capacity overtaking coal for the first time. This, it said, meant coal had fallen from third-most popular energy source on the continent to sixth. Gas, Ember Energy wrote, also declined for the fifth year in a row.
It wrote: “Solar power grew strongly and overtook coal power for the first time. Another year of coal and gas decline – the fifth year in a row for gas – cut EU power sector emissions to below half their 2007 peak and further reduced reliance on imported fossil fuels. Significant progress has been made over the last EU political cycle, but delivery needs to be accelerated.”
