Southern Europe has the energy advantage

Southern European countries have lagged economically for decades compared to the rest of Europe, or to the developed world as a whole. For example, Greece’s foreign debt had to be minimized in order to join the euro in 2001. But that didn’t matter much in the first few years of the 21st century.^st In the 21st century, Greece faced an almost permanent debt crisis no matter what measures it took to strengthen its economy. During this period, the Nordic countries consistently performed better economically than their Southern European counterparts.

Now everything has changed. Southern Europe now leads the European Union in terms of growth rates. Two southern European countries in particular, Greece and Cyprus, have achieved advantages that seemed unattainable until recently. But thanks to the desire to transition to renewable energy and the negative impact of the Ukraine war on other European economies, Greece and Cyprus, with their abundant sunshine and proximity to natural gas supplies in the eastern Mediterranean, are now potential economic stars of Europe.

As the European continent continues to attempt to transition to renewable energy, Greece and Cyprus are taking an ambitious, but perhaps more sensible, balanced and cautious approach. At the annual Eastern Mediterranean Business Summit in New York in late April, Greek and Cypriot officials explained how both countries are benefiting from the new reality and what their plans are for the future. Unlike other European countries that shifted overwhelmingly to renewable energy production a decade ago, Greek Development and Investment Minister Costas Skrekas and Cypriot Energy Minister George Papanastasiou made it clear that they will pursue renewable energy development and green energy exports, as well as the development of natural gas resources. Indeed, both countries continue to develop their natural gas infrastructure, including backing a private pipeline to transport natural gas from Israeli natural gas fields in the Mediterranean off the coast of Israel to Europe, in response to the economic feasibility and hydrogen-compatible potential of the business side, despite complications and additional costs from the Gaza war and the instability in Lebanon.

“We support any project that helps Greece and helps Europe diversify from Russian gas and also increases gas supplies, based on market signals of course,” Skrekas said, demonstrating a much more rational and pragmatic stance than many of his European colleagues have taken in the past few years. Papanastasio added that the Commission has decided not to fund projects linked to fossil fuels. “Perhaps we are moving towards a transition at a pace that cannot be supported by existing technologies,” he warned, reminding Western countries that if the appetite for the energy transition outpaces the technologies and raw materials needed to achieve its goals, the outcome could be the opposite of what was intended.

The pragmatism expressed by southern European leaders contrasts with the all-or-nothing approach pursued by other European countries for decades and bodes well for the countries involved. Energy Transition Having effectively rejected the development of non-renewable energy programs, programs that have created enormous energy vulnerability in Europe after Russia’s attack on Ukraine, southern European countries appear determined to protect their traditional energy sources while expanding mass production of renewable energy.

“We must take advantage of this opportunity to reduce our reliance on critical materials imported from China,” Skrekas explained. “Again, it is clear that we must utilize our local resources. Greece has many minerals and critical materials, for example, gallium, which is essential for the green and digital transition, and we have the potential to meet the demand for the whole of Europe.” Cypriot Minister Papanastasiou agreed, saying, “Despite the fact that part of Cyprus is occupied (by Turkey), Cyprus is very stable politically. Right now, in the Eastern Mediterranean, we are in a volatile situation with the war between Israel and Hamas, which could lead to civil unrest, but Cyprus is stable, so I think this is part of what the United States sees in Cyprus right now. Cyprus is stable.” He added that “if Cyprus decides to supply natural gas to Egypt, it will also help maintain stability in the region.”

Long-term observers of Southern Europe, or Europe as a whole, may be shocked by the idea that countries like Greece and Cyprus are symbols of stability and potential economic stars for the continent, but now it seems increasingly likely. The longer they can maintain stability and attract investment, the easier it will be for them to continue. That will bode well not just for the countries in question, but for the region and the continent as a whole. As the EU single currency hits its 30th anniversary,^Number Now, on its birthday, this small southern European country, long an economic laggard, is set to take the lead in both the energy transition and revitalizing its economy for the future.

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