On Friday 27 March, following the postponement of their informal meeting scheduled for Cyprus (22-23 May), the European Finance Ministers will take stock of the macroeconomic impact of the war in the Middle East triggered by the American-Israeli attacks on Iran at a remote meeting.
Meeting in an inclusive format, the Eurogroup will analyse developments on the energy markets and will be informed of the various emergency measures taken by several EU countries, such as Spain (see EUROPE 13833/1), to cushion the impact of soaring oil and gas prices on citizens and businesses.
We are seeing “a negative impact” from the war in the Middle East, which is spreading through various channels: “energy prices, a fall in asset valuations and volatility on sovereign debt markets”, noted a European source on Wednesday 25 March.
The Director of the International Energy Agency, Fatih Birol, will brief the Ministers on the latest developments on the energy markets. The Commission will provide an overview of the budgetary measures taken at national level and recommendations on the type of measures that are acceptable. The ECB will inform Ministers of its recent monetary decisions and, despite the uncertainty over the duration of the conflict, of the envisaged impact on inflation (see EUROPE 13832/17).
This European source hoped that the Member States would be able to “coordinate more” than during the inflationary shock suffered in 2022 at the start of Russia’s military aggression against Ukraine. Member States must develop their measures “prudently, in order to guarantee budgetary stability”, maintain a level playing field and continue to encourage the “energy transition”, the only way for the EU – in the source’s view – to be less dependent on macroeconomic shocks linked to fossil fuels. All the more so because in 2026 they will not have the same budgetary leeway as in 2022.
I hope that EU countries will be “smarter” by not subsidising fossil fuels, the source added, noting that it is “more difficult to withdraw” emergency budget measures than to implement them.
G6. Ministers from the six largest EU economies – Germany, France, Italy, Spain, Poland, and the Netherlands – will present their work on the integration of capital markets (see EUROPE 13809/2).
In its usual format, the Eurogroup will prepare the position of the European countries with a view to the spring meetings of the IMF and the World Bank. In the current climate of uncertainty, they will be keeping a close eye on exchange rates, particularly between the euro and the US dollar. The issue of global imbalances, a priority of the French Presidency of the G7, will also be addressed. (Original version in French by Mathieu Bion)