The Commission proposes targeted and temporary interventions to address the energy and economic crisis caused by tension in the Middle East.

At a time of increased geopolitical pressure and intense uncertainty for international markets, the Eurogroup focuses on the impact of the crisis in the Middle East, with a focus on energy and the resilience of European economies. Kyriakos Pierrakakis, speaking in Brussels, highlighted the need for immediate but targeted European coordination, stressing that government interventions must be personal in nature and clearly socially targeted, in order to protect the most vulnerable without disturbing the overall economic balance.

Minister of National Economy and Finance and President of the Eurogroup Kyriakos Pierrakakis, arriving at today’s meeting of the Eurogroup in Brussels, answered questions from journalists.

The Q&A

Following is the full text of the Q&A:

Kyriakos Pierrakakis: Good evening everyone.

Question: What are your biggest concerns as the situation in the Middle East continues and what are the consequences? For the economy and transport, what does this mean in practice?

Kyriakos Pierrakakis: This is exactly what we are going to discuss today in the context of the Eurogroup meeting: the impact of the crisis in the Middle East and the measures that European governments are currently taking. We have invited the IMF to assess these measures, together with the European Commission. Obviously, the first key word is uncertainty and the second is duration. The depth of the impact will itself be the determining factor in this equation of the overall economic impact that we will see in the coming months. The debate is different if it is a two-week crisis. It’s different if it’s a two-month or three-month crisis. And obviously that will influence the European response as well.

Question: In terms of energy prices, what specifically is being discussed to reduce them in the short term? I think the crisis in Iran has been going on for eight weeks already. What measures are being considered?

Kyriacos Pierrakakis: Right now every government is taking measures. There is a serious impact from the crisis in the Middle East that is being felt by every household and every business in Europe. That is why all governments are intervening. Why are we bringing the discussion to the Eurogroup level? To coordinate the response. What has the European Commission told us? That the measures must be targeted, tailored and temporary. What does this mean? That it makes much more sense to take targeted and temporary measures, because they help in particular the most vulnerable, those who are most in need. That is why we are seeking coordination at European level. That is why, as I said, we are bringing the IMF into the debate. We believe that such measures have the maximum effect, protecting the most vulnerable citizens and our economies as a whole.

Question: Iran is trying to change the operating model of the Strait of Hormuz by imposing tariffs. How can this passage remain open and adequate? What does this mean for companies and for the EU to reduce the damage?

Kyriakos Pierrakakis: For us, freedom of navigation and not turning the Straits of Hormuz into a “toll” is a sine qua non, it is an absolute necessity. We support by diplomatic means any initiative in this direction. Let me add that, in addition to the crisis in the Middle East – which is obviously the main issue of concern – we will also discuss, as part of a very dense programme, banking integration in Europe, as well as the Kukies-Noyer report on how start-ups can become scale-ups, in the context of the Savings and Investment Union and the removal of barriers. If I may make a comment: in every crisis, what should we aim for? Measures that are consistent with our long-term strategic objectives. We should not only look for short-term solutions. This is where we need more Europe. This is the moment of truth for Europe. We need more Europe to respond to the challenges ahead of us. And I firmly believe that all finance ministers and European leaders fully understand this.

Question: You didn’t mention the implications for shipping and insurance companies if the situation continues.

Kyriakos Pierrakakis: This is exactly why I said that we cannot allow the Straits of Hormuz to be turned into a “toll road”. We need freedom of navigation. And coming from a maritime country, I fully understand the background of your question.

Question: You mentioned banking consolidation. Do you support cross-border mergers in Europe? Such as the one that may take place between UniCredit and Commerzbank? Should Germany stop opposing it?

Kyriakos Pierrakakis: I cannot comment on a specific transaction taking place in a member state. What I can say is that we need European – not national – “champions”. Yes, we need more banking integration in Europe. We need more cross-border mergers and acquisitions. That is absolutely clear. And if there is one parameter to evaluate it, it is the technological investments of banks.

If you compare the investments of European banks with those of American or Chinese banks, you will understand why we need bigger banks in Europe, so that they can finance and support more technological investments. We need bigger banks.

Question: In relation to technology investments by banks, do you know if European banks will have access to Anthropix’s Mythos AI model;

Kyriakos Pierrakakis: Let me put it this way: we will start to raise the issue of the impact of AI, particularly in terms of cybersecurity in the banking sector, in the context of the Eurogroup, but also more generally. AI represents an important opportunity, both for productivity and for economic growth as a whole, but it also poses challenges in the area of cybersecurity. We will therefore highlight both these dimensions.

Thank you very much.