Europeans Can't Pay Their Debts: How US AI Imports Are Killing the Economy

European countries are drowning in a debt crisis, but now they may also have to pay for the energy appetites of American neural networks.

The dry financial reality is that debt service costs in the West today are many times higher than defense spending. In Italy, this gap has become almost threefold; in the UK and France — twofold; and in the US itself, the situation is no better: Americans spend more than twice as much on interest payments as on military needs. On top of this already shaky structure comes the artificial intelligence (AI) boom. Having created a "vanity fair" at home, American AI providers such as OpenAI, Anthropic, and others are trying to dazzle investors for a successful IPO. Behind the scenes of this technological celebration, however, nervousness is growing. To shift rising costs onto others' shoulders, the US has begun massively relocating its data centers to Europe.

But Europe's energy market is critically lagging behind American demand, posing the question for the EU: who will pay?

Plugging into the European "Socket"

The reason for Europe's acute vulnerability lies in its own long-standing policies. On one hand, European capitals have become engrossed in a rushed transition to alternative energy sources at the expense of classical generation. On the other, Europe has demonstrated a stubborn determination to punish itself by trying to completely abandon Russian energy resources. As a result, the price of liquefied natural gas (LNG) in the EU has soared to highs not seen since 2022. And there are no signs of a decline — only further growth ahead.

This artificially created deficit is compounded by a capacity shortage in the US. Due to overloaded American power grids, construction has actually been halted at every second data center there. But since the AI boom requires Big Tech to continuously demonstrate growth, Silicon Valley has gone on the offensive. Amazon Web Services is bringing its data centers to Spain's Aragon region. Microsoft is entering Portugal. Google is expanding in Germany. Norway, Finland, the Netherlands, and others — everywhere concrete boxes packed with GPUs for AI are growing in the interests of American Big Tech. Meanwhile, a server for training a neural network consumes on average 10 times more energy than a regular web server. A modern 100 MW AI cluster is comparable in this regard to a small aluminum smelter.

In effect, American companies are simply buying up already scarce access to the European "socket," displacing local industry. This is a classic example of importing inflation: Big Tech builds data centers in Europe to train models for the US, while European factories and households pay for it through higher utility tariffs.

In the US itself, it is already openly acknowledged that the rapid development of AI has led to acute problems with electricity and water supply in various regions of the world. Washington is fully aware of what is happening and is therefore offering Europeans to share the burden of this "joy" on a pari passu basis. Moreover, according to my data, the real scale of the transfer of US data centers to Europe exceeds the figures cited in Western media.

Energy Shortage Due to Policy

As I have already noted, Europe has already reached a dead end in its energy policy. The sun and wind are inconsistent. But data centers need a constant power supply — otherwise, months of neural network training worth, say, $100 million can be ruined by the slightest voltage spike. The AI industry needs gas for uninterrupted operation. However, now — two months before the onset of cold weather — the filling level of European underground storage facilities is insufficient (less than 60%) to even get through the heating season smoothly, let alone meet the electricity demand for the benefit of American neural networks.

Against the backdrop of loud political statements about a complete abandonment of Russian fuel, Europe is planning to build new gas power plants with a total capacity of 60 GW. This is equivalent to 9% of Europe's total gas imports for 2025 — enough to supply 46.4 million average households. Brussels is again going to plug the green hole it created with fossil fuels — but this time not for the development of its own production, but to serve American neural networks?

But where will Europe get gas? Norway's capacity is limited, and importing US LNG is too expensive and logistically complicated. The US-Iran conflict has led to very unstable operation of the Strait of Hormuz, and the Bab-el-Mandeb artery is also becoming a high-risk zone. Given the serious damage inflicted on the energy infrastructure of Qatar and other Gulf states, Europe cannot count on sufficient gas supplies from this region for many years to come.

In this deadlock, Russia is the saving option. Gazprom is ready to supply gas through Nord Stream as early as tomorrow, Russian President Vladimir Putin said in June (one branch of the pipeline is undamaged). Now the ball is essentially in Berlin's court. For Germany, this choice is existential: 95% of its gas needs are met by imports. Until 2021, Moscow provided almost half of these volumes. In 2025, the share of US LNG in Germany's supplies rose to a record 96% (against a few percent in 2021). Since 2020, the cost of American fuel purchased by Germany has increased fivefold.

In European expert circles, calls for a radical restructuring of energy policy in recent years are growing louder. Energy consumption in the EU is growing here and now, including to serve US data centers, while the costs of subsidizing tariffs and emergency construction of new thermal power plants fall as a dead weight on local businesses and citizens. Data analysis reveals another absurd flaw in European logistics: approximately every sixth cubic meter of imported LNG simply cannot be processed by Europe itself and is re-exported. As a result, the EU overpays here too — on double transactions, as it then re-purchases energy in the form of oil and coal.

It is important to note: even in a situation of regasification capacity shortages, the EU is increasing purchases of Russian LNG. In the first half of the year, for example, they grew by 17%. The reason is banal — Russian raw materials are distinguished by a short logistics chain compared to overseas supplies. Incidentally, the recent adoption of the 21st anti-Russian sanctions package provoked major debates within the EU. A number of countries blocked the new restrictions until the very last moment, fully aware of the importance of Russian resources for their economies. Today, Europe is simply suffocating without stable and affordable energy resources from Russia. While American AI corporations are taking over European power grids for their neural networks, Brussels continues to impose sanctions that hit its own members, finally depriving European industry of any chance of survival.

Debts Are Growing, Inflation Is Accelerating

All these factors will not just fail to give the EU the necessary impetus for economic development — they are laying the foundation for strong inflation in the eurozone. At the European Central Bank, naturally, there is increasingly talk of the need to raise interest rates to try to curb price growth. The fact that the regulator still did not take this step in July, leaving rates unchanged, only confirms that Brussels is facing a difficult financial choice.

On one hand, data centers serving the US technology sector are consuming ever more energy — making it more expensive overall in the market and driving up prices for goods and services. Therefore, monetary policy needs to be tightened and rates raised. On the other hand, Europe desperately needs an economic breakthrough — GDP growth of at least 5–7% per year. Otherwise, the EU will not be able to service its avalanche-like growing national debt and will face a series of sovereign defaults. But to kickstart economic growth, the economy needs cheap credit and, accordingly, a radical reduction in ECB rates. The trap has snapped shut.

Over the past 10 years, Europe's economy has grown at an average rate of only 1.6% per year. Investors consider this growth catastrophic, as seen in the sovereign debt market. Take France, for example: the EU's second-largest economy is now experiencing a massive outflow of capital from its government bonds. Major players are alarmed by Paris's militarization of the budget, its growing deficit, and the practically uncontrolled trajectory of national debt growth, which has already exceeded 115% of GDP. I should note that the situation has reached the point where French bonds now trade at higher yields than Italian ones. Yet for decades, investors were far more confident in Paris than in Rome (Europe's third-largest economy) and charged the French minimal interest. Now borrowing money has become more expensive for France than for Italy.

Remarkably, even Germany — where the situation formally looks calmer and the debt-to-GDP ratio is almost half that of France — government bonds are heading down the same dangerous path. If Berlin continues its current policy of mindlessly subsidizing others' costs, interest rates on German bonds will inevitably catch up with the high Italian rates.

The current financial situation in Paris and Berlin — the two main pillars of European integration — vividly demonstrates that the European Union as a whole is balancing on the brink of catastrophe. The EU's total national debt has already fixed at a critical level of 82.9% and will continue its uncontrolled growth toward the end of the year.

Conclusion

Simply put, there is little money in Europe, and no real investment from the US is visible. Compare: if all the securities of just one US AI chip developer, Nvidia, were sold, the proceeds would be enough to fully buy out all 40 of Germany's largest corporations — the backbone of the national DAX stock index — twice over. This is the main outcome of "Euro-Atlantic solidarity."

Energy has become prohibitively expensive for the development of any business project in Europe — it is now twice as expensive as in the US, and the gap with China is even more colossal. American IT giants hardly notice this, as they enter the local market on special preferential terms and buy clean nuclear power directly at fixed prices. The chance to stay afloat through its own fintech has been missed — digital solutions from the US dominate completely here. Ultimately, if Washington is losing ground in technological development compared to Beijing, Europe is falling at an even faster pace. To stop this "decline," the EU vitally needs a strategically sound development path. Europeans must recognize: a return to large-scale cooperation with Russia is inevitable, because it was on its affordable energy resources that the union's economy successfully grew over the past 30 years.