The deindustrialization of the European Union

Op-ed views and opinions expressed are solely those of the author.

Economically, this agreement is the equivalent of a one-way street.” Bill Clinton, October 2000

The Industrial Revolution began in England in the late 18th century with the advent of new manufacturing materials (iron and steel), new energy sources (coal, petroleum, and electricity), the invention of new machinery and the factory system. It spread to Belgium, then France and later to Germany and the rest of Europe. It created a new paradigm for economic growth, prosperity for the populace, and the creation of wealth for nations. Now, almost 300 years later, it appears that there could be a counter-revolution: the deindustrialization of Europe.

With few exceptions (the Benelux and oil-rich countries come to mind), the standard of living of any nation is directly related to its per capita energy consumption and the size of the manufacturing sector. President Clinton signed the U.S.-China Relations Act of 2000 in October, granting Beijing permanent normal trade relations with the United States and paving the way for China to join the World Trade Organization in 2001. At the time that he signed the agreement, President Clinton stated: “Economically, this agreement is the equivalent of a one-way street.” He was right, but I don’t think that street ran in the direction he expected. Between 2000 and 2010, U.S.-China trade rose from $100 billion to $350 billion. It is estimated that one-third of all US manufacturing jobs vanished between 2001 and 2009. Some argue that the 2001-2009 period was worse for US manufacturing than the Great Depression.

However, to a great degree, we, the American people, are responsible for the demise of our domestic manufacturing sector. We traded our long-term economic prosperity for short-term economic gratification. We bought cheap goods from China at the expense of our economy, our balance of trade and our manufacturing sector. Now it appears that the European Union (EU) is about to experience a similar impact on its manufacturing sector as did the US in the first decade of the 21st century, albeit, for different reasons. The EU traded long-term economic prosperity for short-term political gain to satisfy their Green political parties. They bought into the fraudulent global warming hypothesis and reconfigured their electric power grid to eliminate coal-fired power plants and burn cheap natural gas supplied by Russia.

For the last 30 years, the EU depended on the supply of a critical energy component, natural gas, from an adversary-Russia. It was used to fuel its economies and the electric power grid as well as to heat homes, businesses, schools, and hospitals. Then, politicians placated Green parties and eco-terrorists who demanded a reduction in carbon emissions from electric power plants by shutting down coal-fired plants and increasing the percentage of natural gas and “renewables” that power the electric grid. While it is too early to tell the exact toll that these actions will take, the effects will be devastating for all the EU countries’ economies and the standard of living of every EU resident.

The 2022 EU embargo on Russian oil and gas and Mr. Putin’s subsequent decision to shut down the Nord Stream 1 pipeline supplying the EU with 40% of its natural gas supply, have caused havoc with energy prices throughout the EU. It does not take a rocket scientist, or even a climate scientist, to see the impact that the rapid rise in energy cost, primarily electricity costs, is having on manufacturers throughout the EU. That impact ranges from reduced production at many facilities, to lay-offs or plant closures, involving virtually every manufacturing industry. The long-term result will be increased unemployment, a recession, staggering inflation, and a cratering of the manufacturing GDP for the EU.

A graphic example of the problems that EU manufacturers face is the European operations of BASF, an ammonia manufacturer with headquarters in Ludwigshafen, Germany. As a result of the rapidly escalating price of natural gas, Chief Executive Martin Brudermuller recently announced that BASF would downsize in Europe “as quickly as possible, and also permanently.” A recent note by Deutsche Bank analyst Eric Heymann predicted that the share of Germany’s manufacturing sector in the country’s GDP will decline in coming years. “If we look back at the current energy crisis in about ten years, we could see this time as the starting point for an accelerated deindustrialization of Germany.”

In December 2022, the EU reached an agreement on the implementation of the world’s first “carbon border tax.” While it is billed as a central part of the EU’s strategy to reduce its carbon emissions to net zero by 2050, it is nothing more than a protectionist tariff. In theory, it is designed to make importers pay for the cost of the carbon emissions that were produced in their home country during the manufacturing operations, including carbon emissions to produce the materials and generate electricity used to manufacture the product. However, it is nothing more than an attempt to shield domestic manufacturers from the adverse competitive impacts of the rapidly escalating costs of energy resulting from the reconfiguration of the power grid to eliminate coal and increase renewables.

I find it sadly ironic that the continent that gave us some of the greatest scientific minds in history such as Copernicus, Galileo, Newton, Maxwell, Planck, and Einstein, would allow the pseudoscience of the fraudulent global warming hypothesis to wreck their way of life.  If those in the EU had paid attention to the real science regarding the subject of man-made global warming, they would not have attempted economic suicide and endangered their national security.

Now, many countries in the EU are turning back to coal to fuel their electric power plants. However, mines have been closed and coal-fired power plants shuttered over decades. The transition will not be easy or quick. Green parties and eco-terrorists will violently protest these actions. Civil unrest throughout the EU will occur as high inflation, high energy bills and high unemployment rock the economies and the standard of living for all citizens of the EU.

There are many respected scientists in Europe and around the world who refute the claims of the fraudulent man-made global warming hypothesis. Will the US and the rest of the world learn from the EU’s mistakes? It is time for the world to stop the war on the carbon atom and the hydrocarbon bond.

Guy K. Mitchell, Jr. is the author of a book titled “Global Warming: The Great Deception-The Triumph of Dollars and Politics Over Science and Why You Should Care.” It was published on on January 4, 2022


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Guy K. Mitchell Jr.
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