Crisis emerged in Turkey Red Sea Following a wave of attacks by Houthi rebels in Yemen on merchant ships passing through the region in response to Israeli attacks on Gaza. harming the European economy. Although there are currently no signs in this direction, the Commissioner for Economy Paolo Gentiloniadvocated staying vigilant this Monday and “monitor“Situation regarding the possible repercussions of attacks on evolution” energy prices and inflation.
Arriving at the meeting, the Italian said: “We started the year with moderate growth, there is some good news on the labor market, but concerns are increasing about the downside risks caused by geopolitical tensions and, in particular, what is happening in the Red Sea.” Eurogroup meeting It will take place this Monday in Brussels. However, for now, the risks do not seem to have materialized. “It doesn’t seem to have any consequences at the moment in terms of energy prices and inflation, but we believe this needs to be watched very closely because these consequences could materialize in the coming weeks.” he warned.
The situation is worrying not only in Brussels but also in other European capitals. “We are undoubtedly following the developments in the Red Sea crisis, seeing how all indicators regarding freight prices and possible disruptions in supply chains are developing.” Carlos’ Body When they arrived at the Eurogroup meeting, it was their first meeting as Spanish economic ministers. “We need to be very careful on this because of the possible impact in terms of macro and price,” he added, regarding a crisis that was already having consequences on trade flows.
Inflation bottlenecks
In fact, according to a recent report from the World Bank, recent attacks and disruption of shipping routes are “eroding” supply chains and increasing the likelihood of inflationary bottlenecks. “In addition, in an environment where conflicts increase, energy supply may be significantly affected, causing energy prices to increase,” said the international organization, drawing attention to possible indirect effects on other raw material prices and more, as well as geopolitical uncertainty.
At the same time, the European Union continues to work on preparations for a new naval mission proposed by the head of European diplomacy. Josep Borrell, and aimed to restore the safety and stability of navigation in the Red Sea. “What the Houthis are doing in the Red Sea is absolutely illegal and contrary to international law. It is contrary to freedom of navigation and maritime security. The attacks are completely unjustified,” European Commission spokesman Peter Stano said on Monday. This showed that the decision of the mission belonged to the governments. Stano did not provide detailed information about the countries that could participate in the mission, but reminded that there are European countries such as the Netherlands, Germany or Denmark that have already participated in the US-led Guardian of Prosperity operation.