Stournaras says Israel-Hamas conflict could have stagflationary impact in Europe
The war between Israel and Hamas could create new challenges for Europe’s economy, from energy market disruption to an influx of refugees, European Central Bank policymaker Yannis Stournaras told the Financial Times on Wednesday.
Since the eurozone continues to be a large net energy importer, the conflict is “likely to have a stagflationary impact if it becomes a problem,” the Greek central bank governor told the newspaper.
He said that the turmoil in the Middle East shifted the balance against any further tightening of monetary policy, the report said.
Crude oil prices spiked in the wake of a massive incursion into Israel from Gaza by a Palestinian Islamist group on October 7.
Israel has vowed to annihilate the Hamas movement that rules Gaza, after Hamas fighters burst across the barrier to Israel, gunning down 1,300 Israelis, mainly civilians, in the deadliest day in the country’s 75-year-old history. [Reuters]
