Eurogroup chief on energy prices crisis: Measures should be targeted, with priority for vulnerable households and businesses

Measures taken during this period should be targeted, fair, and effective, with priority given to the most vulnerable households and businesses, Eurogroup president Kyriakos Pierrakakis said on March 27, after the group discussed the situation in the Middle East and its economic impact on Europe.

“They must be implemented swiftly, but also remain temporary, so as to address the crisis without creating new, larger problems in the future,” Pierrakakis said.

The Eurogroup meeting had been intended to be held in Nicosia, but instead was held by teleconference because of the situation in the Middle East.

Of the Middle East crisis, he said: “This is a concerning crisis affecting energy, trade, prices, and overall global economic stability. For us, this means heightened vigilance, coordination, and readiness to support our societies”.

One month after the outbreak of the conflict, its effects are already beginning to pass through to the real economy, Pierrakakis said.

Businesses are seeing it in their operating costs, and households are seeing it in their energy bills, he said.

“This creates inflationary pressures and significant risks of lower growth across Europe.”

He said that the key issue is the duration and intensity of the crisis, as these will determine the scale of the economic impact.

“Uncertainty remains high. Europe must stay alert and ready to respond where needed,” Pierrakakis said.

“Our shared hope is for de-escalation and to avoid major and lasting disruptions to energy infrastructure and global energy markets.”

Europe today is better prepared than it was in 2022 during the previous energy crisis, he said.

“It has reduced its energy dependence, strengthened its energy infrastructure, diversified its energy sources, and, above all, gained experience in managing such crises.

“This means we can now respond more quickly, more cohesively, and more effectively,” he said.

“At the same time, we must act with seriousness and responsibility, remaining consistent with the commitments we have undertaken,” Pierrakakis said..

“Because ultimately, this is what allows us to support our citizens in difficult times. Sound fiscal management gives a country the capacity to protect society and to invest in its future. It is what makes an economy more resilient in the face of crises.”

Europe’s energy transition and energy independence constitutes strategic objectives, and no short-term crisis should divert us from them, he said.

“On the contrary, this crisis highlights the importance of investing even more in clean energy, infrastructure, and Europe’s energy autonomy.”

The Eurogroup plays, and will continue to play, a key role in coordinating economic policies in this direction, Pierrakakis said.

He said that Europe is called upon to play a dual role: to protect citizens today and to build a more resilient and competitive economy for tomorrow.

“In this context, a key growth tool is the savings and investments union. It is the means by which Europe can channel European savings into investments within the European economy, finance businesses, innovation, the green transition, and eventually strengthen its competitiveness.”

He said that the Eurogroup meeting had concluded by discussing international economic developments ahead of the IMF and G7 meetings.

“We are living in a period of profound change in the global economy, with geopolitical tensions, shifts in trade, exchange rates, and global economic balances,” Pierrakakis said.

It is clear that in a changing world, the responsibility for global economic stability cannot rest on one region alone. It requires adjustment and responsibility from all major economies, he said.