Washington will refund a French energy giant to exit US offshore wind plans, fueling criticism from environmental groups. The Trump administration has agreed to pay $1 billion (€860 million) to TotalEnergies SE to abandon two offshore wind leases off the coasts of North Carolina and New York. The French company will instead redirect the funds toward fossil fuel projects, according to a press statement from TotalEnergies.

“Considering that the development of offshore wind projects is not in the country’s interest, we have decided to renounce offshore wind development in the United States, in exchange for the reimbursement of the lease fees,” said Patrick Pouyanné, chairman and chief executive officer at TotalEnergies. He added that the refunded lease fees will finance a liquefied natural gas plant in Texas and support the company’s oil and gas activities, describing it as a “more efficient use of capital” in the US.

The Interior Department confirmed that after these investments, TotalEnergies will be reimbursed up to the amount initially paid for the offshore wind leases. The company acquired its Carolina Long Bay lease in 2022 for roughly $133 million (€115 million), aiming to generate more than 1 gigawatt of clean energy, enough to power about 300,000 homes. Its New York and New Jersey lease, also purchased in 2022 for $795 million (€685 million), was designed as a larger project capable of producing 3 gigawatts to supply nearly one million homes. TotalEnergies has significant experience in offshore wind projects in Europe and Asia.

The Trump administration has intensified efforts against offshore wind construction. Last year, it halted five major projects, including Denmark’s Ørsted development, citing national security concerns. Developers and states challenged the orders in court, and federal judges allowed all five projects to resume, ruling that the government had not demonstrated an immediate risk. Interior Secretary Doug Burgum described the current deal as “an innovative agreement” that prevents “ideological subsidies that benefited only the unreliable and costly offshore wind industry.” He praised TotalEnergies for committing to projects that deliver “dependable, affordable power” to US households.

Environmental groups, however, denounced the arrangement as a “billion-dollar bribe” to block clean energy. Lena Moffitt, executive director of Evergreen Action, said, “After losing again and again in court on his illegal stop-work orders, Trump has found another way to strangle offshore wind: pay them to walk away.” Ted Kelly, clean energy director at the Environmental Defense Fund, called it “an outrageous misuse of taxpayer dollars to prevent Americans from having clean, affordable power exactly when they need it most.”

East Coast states continue to invest in offshore wind to expand the supply of affordable electricity, even as natural gas prices rise. Critics warn the TotalEnergies deal could undermine these efforts at a critical moment for the transition to renewable energy.

The Iran conflict has handed Europe its most punishing economic combination in years — stagflation. With input costs surging, output stalling and confidence collapsing, the European Central Bank’s window of stability appears to have closed.

The war in Iran, along with the surge in oil prices it has triggered, is already taking a toll on eurozone business activity, supply chains and corporate confidence. Flash Purchasing Managers’ Index (PMI) surveys from S&P Global released Tuesday showed eurozone growth slowed in March as energy costs hit their highest level in more than three years.

The headline eurozone composite PMI fell to 50.5, down from 51.9 in February and below the 51.0 consensus. While the number still indicates minimal growth, economists are concerned about the concurrent spike in input costs. Rising energy prices, fuel expenses and maritime freight disruptions linked to the conflict in the Middle East pushed inflation among manufacturers and service providers to its fastest pace since February 2023.

Supplier delivery times lengthened to the worst level since August 2022, as companies struggled to secure essential inputs. “The flash Eurozone PMI is ringing stagflation alarm bells as the war in the Middle East drives prices sharply higher while stifling growth,” said Chris Williamson, chief business economist at S&P Global Market Intelligence. He added that the drop in future output expectations was the largest since Russia’s invasion of Ukraine in 2022.

The slowdown is particularly pronounced in the services sector, where new orders declined for the first time in eight months. Manufacturing has shown modest resilience as firms frontloaded purchases to mitigate potential disruptions. Inventories fell as businesses tried to buffer against further supply shocks.

Germany remains in expansion territory, with its composite PMI at 51.9, supported by manufacturing, which reached a 45-month high. Analysts say this surge is largely due to companies stockpiling materials to hedge against disruptions rather than genuine demand growth. German services activity weakened, reflecting rising costs and falling new business.

France presents a bleaker picture. The flash France Composite PMI dropped to 48.3, indicating contraction. Both manufacturing and services activity fell, with new orders declining at the fastest pace in 15 months. Input costs in France surged to the highest since November 2023, but limited pricing power prevented companies from passing costs to customers, squeezing margins.

The PMI data highlight a growing dilemma for the ECB. Growth across the eurozone is approaching stagnation while inflation accelerates due to supply-side shocks rather than demand. Policymakers face the risk of stagflation if energy prices remain high and supply-chain disruptions continue. The trajectory of the Iran conflict and its effect on global energy markets will largely determine the eurozone’s economic outlook in the months ahead.

The European Central Bank (ECB) kept its key policy rates on hold on Thursday, as fresh spikes in oil and gas prices threaten to derail recent progress in reducing inflation.

The bank concluded its March meeting without altering borrowing costs, leaving the deposit facility rate at 2%. Other main policy rates, including the main refinancing operations (MRO) rate and the marginal lending facility rate, remain at 2.15% and 2.4% respectively. The move had been widely anticipated by analysts.

In its statement, the ECB warned that the ongoing war in the Middle East has added significant uncertainty, creating upward risks for inflation while posing downside risks for economic growth. The central bank noted that the conflict in Iran “will have a material impact on near-term inflation through higher energy prices,” and said its medium-term effects will depend on the conflict’s duration and intensity, as well as the broader impact on consumer prices and the European economy.

Thursday’s decision came amid a dramatic spike in energy costs. European natural gas futures jumped over 30% to €74 per megawatt hour, the highest level in more than three years. Oil prices also surged, with Brent crude climbing above $119 a barrel and West Texas Intermediate (WTI) exceeding $96, following Iranian attacks on key energy facilities in the Middle East. Analysts warn that if elevated energy costs persist for months, they could feed into wider price pressures and delay any rate cuts until well into 2027.

The ECB’s hold follows a similar decision in February, when the bank left rates unchanged and reaffirmed its commitment to bringing inflation back to its 2% medium-term target. Christine Lagarde, president of the ECB, emphasized the delicate balance policymakers face between supporting economic growth and containing inflationary pressures.

Markets responded cautiously to the announcement. Major European stock indices opened lower as investors weighed the energy shock against the ECB’s expected move. The euro edged slightly higher in early trading, while government bond yields rose modestly.

For households and businesses across the 21-country eurozone, the decision means that mortgage and loan rates linked to ECB policy will remain steady for now. However, money-market contracts have already adjusted to reflect the potential for one or two rate hikes later this year, rather than the cuts that had been forecast just weeks ago.

Economists noted that the ECB’s message signals continued vigilance. Any prolonged surge in oil and gas prices could force the central bank to maintain tight monetary conditions longer than anticipated, leaving both consumers and businesses to navigate higher financing costs while energy bills continue to rise.

The ECB’s action underscores the fragility of the eurozone recovery in the face of geopolitical shocks, highlighting the challenge of managing inflation while safeguarding economic growth.