Greece's finance minister, Kyriakos Pierrakakis, has warned that the global economy may be entering a period of severe energy disruption linked to the war in Iran, with consequences that could surpass those of previous crises. Speaking at the Semafor World Economy conference on the sidelines of the IMF and World Bank Spring Meetings, he said the situation could evolve into "one of the most serious energy crises in modern history", potentially exceeding both the oil shocks of the 1970s and the economic fallout from Russia's invasion of Ukraine in 2022.
According to Pierrakakis, European economies are already revising growth forecasts downwards while facing rising inflationary pressures, developments he described as typical in the context of an energy shock. While stagflation is not currently the baseline scenario, he cautioned that it remains a possibility depending on how long and how deeply the crisis unfolds. "The critical question is the duration and depth of the crisis," he said.
In his capacity as Eurogroup president, Pierrakakis stressed the importance of coordinated European responses, noting that lessons from 2022 provide a useful framework. He argued that any support measures should be "targeted, temporary and tailored", designed to assist households and businesses without undermining long-term fiscal stability. "We now know what worked and what did not," he added, emphasising that protecting the most vulnerable while maintaining fiscal discipline should remain a central objective.
Beyond immediate crisis management, the minister highlighted the need for structural reforms within the European Union, particularly to deepen the single market and strengthen financial integration. He said Europe continues to underutilise its economic potential due to internal barriers.
On transatlantic relations, Pierrakakis described ties between Europe and the United States as strategic despite periodic tensions. "There may be disagreements, but common interests remain," he said, pointing to cooperation in areas such as technology and artificial intelligence.
Reflecting on Greece's economic trajectory over the past decade, he said the country's recovery has been built on fiscal stability, policy consistency and sustained reforms. He highlighted the state's digital transformation, citing the Gov.gr platform as a key example that has improved public services and strengthened tax compliance.
Pierrakakis also referred to political developments in Hungary, describing the election of a more pro-European government as a positive step for European coordination.
Adapted from ERT
