The Finance portfolio holders of the euro area countries will meet this Friday, the 27th, via videoconference, to discuss the economic consequences of the conflict in the Middle East, focusing on the pressures on energy prices and the macroeconomic implications for the single currency.
The session aims to assess the immediate impact of the crisis on oil and gas markets — marked by greater volatility and risk of rising prices — and identify vulnerabilities in supply chains that could amplify recessive effects in the European Union.
In a context in which several Member States, including Portugal, have already implemented support packages for families and companies, ministers are looking for coordinated forms of response that mitigate economic shocks without compromising fiscal sustainability. European sources warn that repeating the expensive measures adopted in 2022 will hardly be viable, given the current limited fiscal space.
Among the options under analysis is the possible activation of the safeguard clause in EU budgetary rules — an instrument used during the pandemic to temporarily relax deficit and debt limits — although, according to officials consulted by Lusa, this hypothesis is not yet highlighted in discussions. The European Commission’s next economic forecasts, scheduled for May 21, should serve as a reference for future decisions.
It is worth remembering that the Eurogroup already addressed these issues in March, at a meeting in Brussels, where possible prospects for a “long period of instability” and the risk of lasting impacts if the conflict were to escalate were highlighted. At the time, European leaders called for more coordinated responses than those seen in 2022.
Representing Portugal, the Minister of Finance, Joaquim Miranda Sarmento, admitted that the country could record a deficit in 2026 “if circumstances impose it”, pointing out not only the recent meteorological phenomena but also the new geopolitical crisis as factors of pressure on public accounts.
The worsening of instability is due, in part, to Iran’s closure of the Strait of Hormuz following recent military clashes, a situation that has reduced oil tanker traffic and reinforced concerns about global oil supply. Europe’s strong dependence on foreign imports makes the EU particularly sensitive to shocks from the Middle East, reinforcing the urgency of rapid and coordinated political responses.
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