Financial TimesFinancial Times

Doom-mongers are wrong to underestimate the European economy

By Martin Sandbu

21 May 2023 · 3 min read

Editor's Note

The German economy's resilience in the face of Russian energy sanctions shows that the European economy is more flexible than many give it credit for, writes The FT's Martin Sandbu.

“Not even a recession.” That is the verdict on how Germany coped when it abruptly had to do without Russian energy supplies last year — a dependency that had been cultivated by all German governments of the past half-century, for both commercial and political reasons.

The phrase is the title of a new study by economists Benjamin Moll, Moritz Schularick and Georg Zachmann, who compare the outcome for the German economy with the predictions made immediately after Vladimir Putin’s full-scale assault on Ukraine. The invasion triggered what they call “the great German gas debate” between disagreeing groups of economists, with business lobbies and unions weighing in about whether the economic cost of ending Russian gas imports would be bearable.

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