By Lefteris Papadimas ATHENS, March 13 - Europe should act swiftly to contain pressures and protect its economies and citizens if high energy prices persist for a prolonged period because of the U.S.-
Eurogroup Chair: Europe Must Respond Quickly to Prolonged High Energy Prices
By Lefteris Papadimas
Europe's Response to High Energy Prices Amid Geopolitical Tensions
Impact of the U.S.-Israeli War on Iran
ATHENS, March 13 - Europe should act swiftly to contain pressures and protect its economies and citizens if high energy prices persist for a prolonged period because of the U.S.-Israeli war on Iran, the head of euro zone finance ministers said on Friday.
Oil prices are up about 37% since the start of the war, intensifying concerns over the inflationary impact and putting European governments under pressure to help households and businesses.
Consequences for European Economies
Energy Markets and Consumer Prices
Kyriakos Pierrakakis, who is also Greece's finance minister, said the consequences of a prolonged conflict would inevitably be reflected in energy markets, transport costs, financial markets and ultimately in consumer prices.
"That is why it is important for Europe to act quickly and in a coordinated way to contain pressures and protect both our businesses, our citizens and our economies," he told Reuters in response to questions sent by email.
Short-Term Measures Under Consideration
The European Union is examining energy taxes, network charges and carbon costs as possible areas for short-term measures to ease pressure on industries hit by high energy prices.
France, Greece and Poland this week introduced oil price caps and restrictions on profit margins, but strained finances in some major economies mean their firepower is limited.
Greece's Approach and Economic Outlook
Profit Caps and Fiscal Impact
Pierrakakis said recent profit caps introduced by Greece on fuel and food products would not have a "material direct fiscal impact on the budget" and so far there were no indications that tourism and investments - important drivers of Greece's economic rebound - had been affected.
Greek Economy 'Strong and Resilient'
GREEK ECONOMY 'STRONG AND RESILIENT'
He said Greece's budget had taken into account the worst-case scenario for the whole year.
"Even under such conditions, economic growth would remain close to 2%, which shows that the Greek economy remains strong and resilient," he said.
Pierrakakis said no one can predict with certainty how long the current crisis will last but that the European economy "has the capacity and the resilience to absorb such shocks."
Future Strategies for EU Energy and Financial Markets
Clean Energy Investments
The EU is planning to invest heavily in clean energy, infrastructure and energy grid projects, and is considering additional financing for small modular reactors (SMRs) to reduce its energy dependence on oil imports.
Strengthening EU Competitiveness
Savings and Investments Union
Pierrakakis called for faster moves to strengthen EU competitiveness.
"One of my foremost objectives therefore is the Savings and Investments Union. Well-functioning and competitive financial markets are crucial," he said.
(Reporting by Lefteris Papadimas, Editing by Timothy Heritage)
