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EBRD Chief Warns of 'Serious' Economic Shock if Middle East Conflict Drags On
Impact of Middle East Conflict on Economies
Odile Renaud-Basso, President of the EBRD (European Bank for Reconstruction and Development), highlighted that the Middle East conflict is directly impacting economies in its operational regions through rising energy prices and escalating inflation. She noted that surging oil and gas prices affect the broader economy, while increasing interest rates add pressure on highly indebted nations. A decline in tourism and overall market uncertainty were also identified as factors hindering economic growth. Renaud-Basso stressed that a prolonged conflict could lead to a deeper economic shock.
EBRD's €5 Billion Support Package
The EBRD has launched a €5 billion support package to assist neighboring countries affected by the conflict. This aid targets nations such as Lebanon, Jordan, Egypt, Türkiye, and Armenia, which are in close proximity to the conflict zone. Renaud-Basso explained that the EBRD aims to act as a counter-cyclical bank, stepping in to continue investment as private sector banks withdraw or reduce their exposure. This initiative seeks to strengthen economic resilience and prevent further instability in these countries.
Comparison to 1970s Oil Shock and Europe's Challenges
Renaud-Basso drew comparisons to the 1970s oil shock, noting that modern economies are less dependent on fossil fuels than they were then. However, she warned that a more severe and prolonged conflict could result in a much greater economic impact. According to EBRD assessments, if oil prices remain at $100 per barrel for an extended period, growth in their operational countries could drop by 0.4%, and inflation could increase by 1.5%. Europe faces dual challenges of inflation and growth, with fiscal capacity to mitigate the impact of rising energy prices more limited than in the past, such as during 2022 or post-COVID.
*Source: YouTube: Euronews (2026-04-14)*
