EU Weighs Fiscal Flexibility for Energy Shock as 2026 Growth Forecast Slows to 0.9%
Updated
Updated · Euronews · May 22
EU Weighs Fiscal Flexibility for Energy Shock as 2026 Growth Forecast Slows to 0.9%
3 articles · Updated · Euronews · May 22
Valdis Dombrovskis said the EU is examining fiscal-policy options, including existing budget-rule flexibilities, to cushion the Strait of Hormuz-driven energy shock.
Italy pushed the issue after Giorgia Meloni urged more budget leeway and Finance Minister Giancarlo Giorgetti raised it at the Eurogroup, but officials said ministers showed no clear consensus.
Christine Lagarde backed only limited support, saying any fiscal response must be temporary, targeted and tailored or risk forcing a different monetary-policy stance.
The debate comes as the Commission cut its outlook to 0.9% growth in 2026 and 1.2% in 2027, with renewed inflation pressure from higher energy costs hitting households and industry.
Dombrovskis said the EU will not weaken Russia sanctions to secure cheaper fuel, even as some governments revisit sourcing and the UK opened a route for fuels refined from Russian crude.
Can the EU ease soaring energy bills for citizens without triggering a new wave of crippling inflation?
As Russia's shadow fleet thrives, is the EU's energy sanctions policy effectively failing in plain sight?