Stagflation Shock Stalks Europe as Middle East War Drags On
EU’s economy commissioner says the risk of a fallout has grown
Welcome to the Brussels Edition. I’m Suzanne Lynch, Bloomberg’s Brussels bureau chief, bringing you the latest from the EU each weekday. Make sure you’re signed up.
Europe is at risk of a stagflationary shock. That’s the stark warning today from the European Union’s economy commissioner, Valdis Dombrovskis, after a meeting of euro-area finance ministers in Brussels.
“It is now clear that the scale severity and impact of the war has increased” since ministers met two weeks ago, Dombrovskis said, warning that a protracted war in the Middle East could shave as much as 0.6 percentage points off economic output across the EU in 2026 and 2027.