Europe is getting good at absorbing shocks. The question is how long it can keep it up. Having endured the worst cost-of-living crisis in a generation after Russia invaded Ukraine, the region is adjusting to the Iran war with considerably less fuss. Evading the recession many feared, its economy has instead proved unexpectedly robust.

Data Friday showed euro-zone output jumped 0.4% in the third quarter, twice the pace analysts estimated, though volatile Irish numbers have boosted recent readings.

Lessons learned after 2022 have been crucial. Energy supplies are more diversified, consumers are tapping savings and the European Central Bank has responded more quickly to inflation — factors that can help the continent weather future turbulence over energy and trade in a world that’s becoming more prone to shocks. The latest crisis is far from over. But for now, Europe is reaping the rewards.

Perhaps the most progress has been made on energy. The split from Russia following its blackmail over pipeline deliveries in 2022 is now “by and large done,” according to European Economy Commissioner Valdis Dombrovskis, who lists Norway and the US as the region’s top providers at present.

“We had to invest in diversification of notably natural gas supplies, and that’s helping us,” he said in an interview. “But also then to continue our rollout of renewables and improvements in energy efficiency. So that certainly has contributed to resilience right now.”The share of green sources in European Union electricity output rose to 47% in 2025 from 39% in 2022, cushioning the impact of rising gas costs on power prices. Energy-guzzling industries have also stepped up efficiency efforts.

Cement maker Heidelberg Materials AG has revamped a French plant to run on 90% alternative fuels and trimmed power demand by a 10th. Chemicals firm Covestro AG cut energy consumption per ton of product by more than 12% in 2020-2025.

Businesses have learned to use energy when it’s cheap and will benefit as batteries become more prevalent, according to Stefan Kapferer, who heads German power-grid operator 50Hertz. Among other innovative solutions, he lists a chemical park that saves on natural gas by using excess electricity to generate steam.

“These are all trends that would have happened without the experience of 2022,” Kapferer said. “But they’ve, of course, been accelerated.”Households have helped too, resulting in an overall drop of about 15% in gas usage from before the war in Ukraine that’s left both consumers and industry less vulnerable to the current shock, ING Chief Economist Marieke Blom estimates.

EU nations better coordinating purchases to avoid bidding up market prices has also helped, she said.

Beyond energy, shoppers have kept spending despite inflation eroding disposable incomes, in part by dipping into the outsized cash stockpiles they’ve accumulated since the pandemic, according to S&P Global Ratings economist Sylvain Broyer.

“It looks like the resilience of the consumer has its roots in a very unusual drawdown in savings,” he said.

Even after tapping those reserves, he expects saving to continue eclipsing pre-Covid levels, especially while rates on deposit accounts are high. That could provide ammunition for the next shock.

Interest rates look set to rise further, too. Unlike after the start of Russia’s war in Ukraine, when borrowing costs were only lifted with inflation already near 9%, policymakers were much quicker to act this time around.

The ECB has hiked twice since the US attacked Iran, distinguishing it as the first mover among G7 central banks. The contrast to 2022 follows a strategy review designed to prepare for more frequent jolts from geopolitics, climate and demographics. President Christine Lagarde had promised more agility.

The faster response may itself be helping the economy absorb the shock. Medium-term inflation expectations remain anchored near the 2% goal, while knock-on effects such as lofty wage demands look contained, potentially reducing the amount of monetary tightening ultimately needed.

What Bloomberg Economics Says...“We expect the economy to continue expanding at a moderate pace close to trend, but downside risks are building as market stress and tighter financial conditions increasingly weigh on activity.”—Simona Delle Chiaie, chief euro-area economist. Click here for full note With no end in sight to the conflict in the Middle East, however, the story of this latest episode isn’t over and Europe still has reasons to worry.

A fresh surge in oil and gas prices has dashed hopes that the Iran war’s economic consequences will quickly fade, threatening a renewed squeeze on households and company margins. With inflation closing in on 4%, consumers may retrench.

And while the continent has erected buffers following past crises, it’s unclear what form future ones will take. Gas storage, France, trade tensions, war and inflation can interact, and resilience built to withstand one shock may be harder to maintain when several arrive together.

Right now, Europe appears to have some momentum and will continue to benefit from AI spending alongside huge outlays on the military and infrastructure. Despite some vulnerability at the country level, Paolo Grignani, a senior economist at Oxford Economics, sees grounds for optimism.

“The euro-zone economy remains resilient amid geopolitical turmoil and a worsening inflationary environment,” he said after Friday’s GDP data. “The economy is still set to end the year on a decent footing.”