European Central Bank policy makers say concerns about a recession in the euro area are real and justified.

Yannis Stournaras, Governor of the Bank of Greece, stated that if the Middle East conflict continues, concerns about a recession in the Eurozone are real and justified, and negotiations to end the Iran war will become a key factor in the European Central Bank's monetary policy. Stournaras pointed out, "The market's concerns about the Eurozone potentially falling into recession due to the new round of negative supply-side shocks triggered by the Middle East conflict are real and rational. The Eurozone has a high dependence on energy imports, and rising energy prices combined with increasing uncertainty will directly impact economic growth and inflation levels." He said, "Unlike in 2022, this round of inflationary pressures is occurring against a backdrop of already weak economic growth, tightening financial conditions, and narrowing fiscal policy space. This has reduced policy flexibility and made the economy more vulnerable to risks." Currently, the rise in energy prices has not yet had a clear spillover effect on inflation, but if energy infrastructure is damaged, it may generate inflationary pressures in the medium term; and uncertainty in the situation will also inhibit investment and drag down economic growth.