Interview with Luis de Guindos, Vice-President of the ECB, conducted by Carlos Segovia on 20 March 2026

23 March 2026

How will the war in the Middle East affect the euro area economy?

At our meeting on Thursday we concluded that it will have a strong impact on both growth and inflation. Needless to say, the longer and more widespread the conflict, the greater its impact will be.

What is the ECB’s baseline scenario for how long the conflict will last?

In our projections, we don’t specify how long the conflict could go on for. But we do make some assumptions regarding how long energy market disruptions will last. The baseline scenario assumes a peak in energy prices in the second quarter of 2026, followed by a sharp decline in oil and gas prices. Meanwhile, in the adverse scenario the crisis is assumed to last until the third quarter of 2026, whereupon supply is likely to normalise. And in the severe scenario – our most acute scenario – the crisis would be more pronounced. The…