Speech by Philip R. Lane, Member of the Executive Board of the ECB, at an exchange of views on “The economic and fiscal implications in Europe of the Middle East crisis” at the Committee on Economic and Monetary Affairs of the European Parliament

Brussels, 23 June 2026

It is a pleasure to be here for this timely exchange of views on the economic and fiscal implications for Europe of the situation in the Middle East.

I will focus my remarks today on the implications for euro area economic activity and inflation, and for our monetary policy response.

Implications for euro area economic activity and inflation

The peace agreement in the Middle East is welcome, but the situation remains fragile, with risks of setbacks or re-escalation. The full implications of the war for medium-term inflation and growth will depend on the intensity and duration of the energy price shock, and on the scale of its indirect and second-round effects.

Let me start by reviewing the implications of the energy…