Europe should act swiftly to contain pressures and protect its economies and citizens if high energy prices persist for a prolonged period because of the US-Israeli war on Iran, the head of euro zone finance ministers said yesterday.
Oil prices are up about 37 per cent since the start of the war, intensifying concerns over the inflationary impact and putting European governments under pressure to help households and businesses.
Kyriakos Pierrakakis, who is also Greece’s finance minister, said the consequences of a prolonged conflict would inevitably be reflected in energy markets, transport costs, financial markets and ultimately in consumer prices.
“That is why it is important for Europe to act quickly and in a co-ordinated way to contain pressures and protect both our businesses, our citizens and our economies,” he told Reuters in response to questions sent by email.
The European Union is examining energy taxes, network charges and carbon costs as possible areas for short-term measures to ease pressure on industries hit by high energy prices.
France, Greece and Poland this week introduced oil price caps and restrictions on profit margins, but strained finances in some major economies mean their firepower is limited.
Pierrakakis said recent profit caps introduced by Greece on fuel and food products would not have a “material direct fiscal impact on the budget” and so far there were no indications that tourism and investments - important drivers of Greece’s economic rebound - had been affected.
He said Greece’s budget had taken into account the worst-case scenario.
“Even under such conditions, economic growth would remain close to 2pc, which shows that the Greek economy remains strong and resilient,” he said.
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