Pierrakakis: “The impact of the war in Iran will depend on its duration”

Brussels – “The war in Iran is placing significant strain on an already fragile international order,” and in the face of the conflict initiated by the United States and Israel, “the consequences are immediate,” with “energy prices and transport costs rising.” Even the President of the Eurogroup, Kyriakos Pierrakakis, is concerned about what the conflict in the Middle East may bring. The fears are the same as those of the European Central Bank and within the European Commission, and regard economic stability. “The impact of this war will depend on the duration of the crisis,” he said, speaking at the European Investment Bank (EIB) Annual Forum. Translated: the longer the conflict lasts, the worse it will be. 

Pierrakakis knows that continued fighting will affect supplies, prices, and, above all, business and household sentiment. Without confidence, things are likely to take a turn for the worse, and so “we must act quickly and in a coordinated manner.” The European Union must show unity and responsibility, but, above all, “what is required now is a clear sense of urgency, with the full understanding that, in times of crisis, time is never neutral.” All this calls for politicians to continue reforms.

“If Europe wants to compete, we need more projects that are investable…and more pathways for private capital to follow,” he explains, offering his anti-crisis recipe. The Europe of States must focus on innovation: “Digital finance can compress the distance between savers and innovators…between national markets and a genuinely European market.” and in this context, “the digital euro is a key strategic initiative.” However, the savings and capital union must be completed, because “digital finance cannot substitute for structural integration. It must complement it.” 

The call for a decisive European response in the sense of coordinated action and determined political action is an invitation to embark on a new course: in light of the war in Iran and its developments, “European sovereignty is no longer an abstract ambition, it is a condition for economic survival,” the President of the Eurogroup argues. The crisis in the Middle East must be seen as an opportunity. After all, he points out, it is precisely in difficult times that the EU has given its best: “We have absorbed financial turmoil, sovereign debt stress, a pandemic, and an energy shock.” The war in Iran can also be overcome.