Middle East conflict affects Europe, Eurozone warns of rising "stagflation risks"

On the 27th local time, Eurozone finance and economy ministers held a Eurogroup meeting via video conference to assess the impact of the current situation in the Middle East on the EU economy and discuss measures to address it. Participants exchanged views on energy price fluctuations, economic growth prospects, and potential risks. During a press conference after the meeting, European Commissioner for Economic Affairs, Dombrovskis, stated that the scale and impact of the recent conflicts in the Middle East have been expanding, with severe disruptions in shipping in the Hormuz Strait and attacks on energy infrastructure leading to a significant rise in energy prices. Currently, Brent crude oil prices have been stable above $100 per barrel for two consecutive weeks. Dombrovskis warned that the escalation of the situation in the Middle East has had a significant impact on the European economy. If the interruption in energy supply persists, it could pose a risk of "stagflation" to the European economy, facing a situation of slowing growth and rising inflation. If the impact worsens and lasts, the EU's economic growth rate in 2026 and 2027 may decrease by 0.6 percentage points.