On April 7, 2026, as energy prices were surging again as a result of the war in the Middle East, Frank Elderson – a member of the Executive Board of the European Central Bank – published an op-ed on the Frankfurt institution’s blog, which was picked up the same day by the Financial Times. The paper is not a policy document: it is a technical analysis signed by one of Europe’s most influential central bankers. Its content, however, has political significance that is difficult to ignore.
The timing of Elderson’s intervention is not accidental. The ECB’s March 2026 macroeconomic projections had already captured the impact of the Middle East conflict: rising inflation, falling growth. The same pattern already seen in 2022, with the war in Ukraine. And before that in 1973, with the OPEC oil embargo. European dependence on imported fossil fuels turns every geopolitical crisis into a domestic economic crisis.
“Recent geopolitical tensions have highlighted how little this dependence has changed,” Elderson writes. Conflict in the Middle East has “triggered another surge in European energy costs,” making the management of monetary policy “a complex scenario”: raising rates to curb inflation risks crowding out growth; lowering them to support the economy risks entrenching inflation. A structural, not cyclical, trap.
The numbers that dismantle the “too expensive” front
The most frequently used argument against the energy transition is that of cost. Elderson addresses it directly and bluntly, “Focusing only on these costs is deeply misleading.”
The reasoning is simple. Yes, the European Commission estimates that between 2026 and 2030 it will need about 660 billion euros a year in transition investments. But Europe already spends nearly 400 billion euros a year on importing fossil fuels – an expense that comes out of the European economic system, is structurally volatile and depends on decisions made in Riyadh, Moscow or Tehran. For renewables, the calculation is different: “Once the infrastructure is in place, the energy itself is practically free.”
To reinforce the argument, Elderson cites two hard data. The first comes from the UK Climate Change Committee: every pound invested in sustainable energy generates benefits 2.2 to 4.1 times the costs. The second comes from Spain, which has accelerated the transition to wind and solar more than any other major European country: according to an analysis by the Bank of Spain, in early 2024 Spanish wholesale electricity prices were 40 percent lower than they would have been had renewable generation remained at 2019 levels. While Europe was paying dearly for energy, Madrid was not.
“Fossilflation“
Elderson uses a term in the paper that accurately summarizes the mechanism: “fossilflation.” Fossil inflation. A phenomenon that repeats cyclically – 1973, 2022, today – and which central banks cannot neutralize with ordinary tools, because it arises outside the European economy and does not respond to the levers of monetary policy.
The way out, the banker writes, is to structurally reduce exposure: “The most effective way to do this is to reduce dependence on imported fossil fuels and accelerate an orderly transition to clean, home-grown energy.” And he asks governments not to give in to short-term pressures: “Policy certainty, combined with the right incentives, is essential to ensure that long-term prospects are prioritized over short-term gains.”
So they put the brakes on renewables
The ECB is not a political body, and Elderson does not name names. But the context in which he writes is that of the past few years, in which several European governments-and the Italian government first and foremost-have slowed authorizations, multiplied bureaucratic constraints and fueled a public narrative hostile to renewables, presenting them as an expensive and impractical ideological choice. At the same time, in Brussels, political forces harking back to the sovereignist right have worked to undermine the Green Deal and call into question European climate goals.
Elderson’s intervention is not a commentary on these choices. It is something more uncomfortable: a technical assessment, signed by the continent’s most important monetary institution, that clearly states where Europe’s economic interest lies. “The real question is no longer whether Europe can afford to make the energy transition, but whether it can afford not to.” The answer, he writes, “is clear.”
