Europe's industry is being ravaged by exorbitant energy costs and an over-valued euro, blighting efforts to reverse years of global manufacturing decline.

"We face a systemic industrial massacre," said Antonio Tajani, the European industry commissioner.

Mr Tajani warned that Europe's quixotic dash for renewables was pushing electricity costs to untenable levels, leaving Europe struggling to compete as America's shale revolution cuts US natural gas prices by 80pc.

"I am in favour of a green agenda, but we can't be religious about this. We need a new energy policy. We have to stop pretending, because we can't sacrifice Europe's industry for climate goals that are not realistic, and are not being enforced worldwide," he told The Daily Telegraphduring the Ambrosetti forum of global policy-makers at Lake Como.

"The loss of competitiveness is frightening," said Paulo Savona, head of Italy's Fondo Interbancario. "When people choose whether to invest in Europe or the US, what they think about most is the cost of energy."

A report by the American Chemistry Council said shale gas has given the US a "profound and sustained competitive advantage" in chemicals, plastics, and related industries. Consultants IHS also expect US chemical output to double by 2020, while Europe's output will have fallen by a third. IHS said $250bn (£160bn) in extra US manufacturing will be added by shale in the next six years.

European president Herman Van Rompuy echoed the growing sense of alarm, calling it a top EU priority to slash energy costs. "Compared to US competitors, European industry pays today twice as much for electricity, and four times as much for gas. Our companies don't get the rewards for being more efficient," he said.

Europe's deepening energy crisis has for now replaced debt troubles as the region's top worry, with major implications for the Commission's draft paper on shale expected in October. The EU's industry and environment directorates are pitted against each other. The new legislation could in theory stop Britain, Poland, and others going ahead with fracking.

"Personally, I am in favour of shale gas in Europe because we have to do more for industry," said Mr Tajani.

David Fuller's view

I have harped on about this for years so I certainly share Mr Tajani’s views.  However, on reading the quotes in this article I worry about his job security as European industry commissioner! 

Fortunately for Europe, solutions to the energy problem are at hand, so this is really a question of will. 

1) Restart viable nuclear plants, of which France has the largest number.  Invest in smaller and somewhat safer ‘new nuclear’ plants.

2) Develop Europe’s considerable shale oil and gas potential.  Yes, people will protest, as we see in the UK, but this is a matter of education and reward, plus responsible management by companies with the fracking skills. 

3) Do not build any more windmills.  Instead, encourage the use of more solar panels on buildings.