(Finance) – “So far the impact of tensions in the Middle East on the energy markets it has been contained, but there is an increased risk of price increases if the conflict were to worsen. Obviously these new geopolitical tensions add risks and uncertainties”. This was stated by the European Commissioner for Economy, Paolo Gentiloni nn the press conference at the end of the Eurogroup.
As for the euro area economy, the prospects remain “challenging”. GDP contracted by 0.1% in the third quarter, he recalled, while indicators and surveys point to a continued loss of momentum at the start of the fourth quarter. The good news, however, “is that October inflation fell to 2.9% – said Gentiloni – at the lowest since July 2021, and the moderation has been extended to all categories” of goods.
Before the Eurogroup, the Commissioner had also mentioned the Stability Pact. “If an agreement is reached on the new fiscal rules there will be an adjustment between the current phase and the next phase, if an agreement is not reached on the new rules the previous ones will come into force”, Gentiloni said when arriving at the Eurogroup meeting. On the negotiations to reform the Stability Pact, he warned, “time is not unlimited”.
During the press conference, the director of the ESM, Pierre Gramegna, insisted on the ratification: “This year has offered an excellent example of how there can be sudden situations of instability, so it is truly crucial that by the end of the year all the countries have ratified the amendment to the ESM treaty, so that the backstop mechanism can come into force early next year.”