The risk of the current crisis becoming one of the most serious global energy crises has been warned by Minister of National Economy and Finance and chairman of the Eurogroup, Kyriakos Pierrakakis<\/b>.<\/p>\n
He pointed out that the evolution of the situation will largely depend on the duration of the turmoil in international markets energy<\/b>.<\/p>\n
Kyriakos Pierrakakis, in conversation with Alfred Kammer, director for Europe at the IMF, at a public event at the Fund’s headquarters entitled “Europe under pressure. Securing growth and resilience in a more fragile world”<\/b>, he highlighted that uncertainty and the duration of the crisis are critical variables in the intensity of the economic impact in Europe.<\/p>\n
As he said, the scope of the crisis may exceed previous historical data, noting that “if the Stena remain closed for an extended period of time, (the crisis) has the potential to become the largest energy crisis in history.” In this light, he pointed out that during the oil crises of the 1970s, the loss of supply amounted to about 10 million barrels per day, compared with about 13 million today.<\/b><\/p>\n
With this in mind, the Eurogroup president stressed that the effects are already visible in energy prices and costs for households.<\/b>He particularly stressed the importance of targeting support measures towards the most vulnerable, noting that the effectiveness of intervention depends on the proper allocation of limited resources in conditions of uncertainty. “We must do everything we can to support especially the most vulnerable”<\/b>, he said.<\/p>\nTargeted measures<\/h3>\n
Referring to the Greek experience, he noted that the government implemented targeted measures, such as fuel subsidies for households and interventions to support businesses<\/b>, avoiding horizontal and non-targeted tax cuts, which would have a more permanent fiscal footprint. On the cost of the interventions, he noted that current measures are running at around 0.2% of GDP, compared to around 2.5% in the 2022 crisis.<\/b> In this context, he underlined that the challenge for governments is to balance fiscal discipline and social support,<\/b> especially in an environment of economic uncertainty, rising interest rates and high public debt.<\/p>\n
He went on to note that Europe appears more resilient than during the energy crisis of 2022,<\/b> due to the greater diversification of energy sources and the investments made in infrastructure since then. Regarding the structural picture of the European energy market, he noted that “we still import about 57% of our energy”, which makes the European economy vulnerable to external shocks. <\/b>This fact, he argued, makes it necessary to accelerate investment in networks, storage systems and energy interconnections.<\/p>\nNeed to promote energy integration<\/h3>\n
He made a special reference to the need to promote energy integration, stressing that “promoting a full Energy Union in Europe will have a direct and positive impact, not only on energy, but also on competitiveness as a whole”. At the same time, he underlined that “47% of electricity production now comes from renewable sources”,<\/b> noting however that this progress does not negate the need for further investment in infrastructure.<\/p>\n
At the same time, the Minister of National Economy and Finance expressed concern about trends slowing down the green transition<\/b> in some member states, noting that the energy crisis could be either a brake or an accelerator of reforms, depending on the policy options adopted.<\/p>\n
As regards the medium-term prospects for growth in Europe,<\/b> the Eurogroup president highlighted the need to boost productivity and remove internal barriers to the single market, noting that fully exploiting its potential can provide a significant boost to the European economy. In this context, Kyriakos Pierrakakis underlined the importance of the implementation of the Savings and Investment Union<\/b> and the creation of favourable conditions for business development on a European scale.<\/p>\n
In this regard, he highlighted the need to create “European champions” in strategic sectors and to support innovation ecosystems,<\/b> so that European businesses can grow, raise capital within Europe and become globally competitive.<\/p>\n
Referring to the Greek experience, the Finance Minister noted that progress in recent years has been based on political stability, fiscal consolidation and the implementation of reforms, noting that the strengthening of administrative capacity and the digitalisation of the state have had multiplier benefits for the Greek economy.<\/b><\/p>\n
Finally, the Eurogroup President underlined that the success of European policies depended on the speed of implementation and confidence building among member states, noting that the challenge for Europe was to turn strategic directions into tangible results.<\/p>\n","protected":false},"excerpt":{"rendered":"
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