Finance Minister Kyriakos Pierrakakis arrives for a meeting of eurozone finance ministers at the European Council building in Brussels, March 9, 2026. [Geert Vanden Wijngaert/AP Photo]
Greek Finance Minister Kyriakos Pierrakakis has delivered a stark warning about the scale of the ongoing energy disruption triggered by the war in Iran, describing it as potentially the most severe energy crisis in modern history.
Speaking at the Semafor world economy summit on the sidelines of the IMF and World Bank Spring Meetings, Pierrakakis, citing recent assessments by the International Energy Agency, underscored that the magnitude of the current shock could exceed that of the two oil crises of the 1970s as well as the energy fallout following Russia’s invasion of Ukraine in 2022.
The comparison is not merely rhetorical, he said, as in terms of supply disruptions current losses in oil and natural gas flows appear to have surpassed previous historical benchmarks.
“If the Strait of Hormuz remains closed for a prolonged period, the consequences will be profound,” he said, pointing to the strategic importance of the passage, through which a significant share of global energy and critical commodities transit. Beyond oil and gas, disruptions are already affecting sectors such as fertilizers and industrial inputs, amplifying the risk of second-round effects across global supply chains.
While Asia is currently the most directly exposed – absorbing the majority of energy flows passing through the strait – the price impact is global. “Energy prices are set in international markets, so all economies are feeling the shock,” Pierrakakis noted, adding that Europe is already revising its macroeconomic outlook accordingly.
According to the minister, European growth forecasts are being adjusted downward, while inflation expectations are moving higher – developments consistent with the early stages of an energy-driven supply shock. Although the worst-case scenario of stagflation is not yet the baseline, it remains a credible risk depending on the duration and intensity of the crisis.
“The key variables are time and depth,” he said. “Is this a short-lived disruption, or something more persistent? That will determine the macroeconomic outcome.”
Even in a best-case scenario, Pierrakakis cautioned, the damage to energy infrastructure already sustained will delay any normalization of supply. As a result, risk premia in energy markets are likely to remain elevated, prolonging inflationary pressures.
EU response
As president of the Eurogroup, Pierrakakis highlighted ongoing efforts to coordinate a common European response. Drawing on the experience of the 2022 energy crisis, he emphasized that policy interventions must adhere to three key principles – they should be temporary, targeted and tailored.
This approach aims to strike a balance between cushioning households and businesses from the immediate impact of price shocks, while avoiding distortions such as excessive demand stimulation or long-term fiscal slippage.
“We know what worked and what didn’t,” he said. “The objective is to support the most vulnerable, while preserving fiscal discipline.”
Beyond the immediate crisis response, Pierrakakis used the platform to advocate for deeper structural reforms within the EU, particularly in financial integration and market efficiency.
He argued that Europe continues to underutilize its economic potential due to internal barriers within the single market, especially in capital allocation. European savings, he noted, are not effectively channeled into productive investment, in contrast to the US.
On the geopolitical front, Pierrakakis reaffirmed the enduring strategic importance of the transatlantic relationship, despite recent tensions. While acknowledging disagreements – ranging from trade issues to unilateral policy decisions – he stressed that both the US and the EU ultimately share common long-term interests.
“There may be turbulence, but the strategic alignment remains,” he said. “In a world of increasing competition, alliances matter.”
He also highlighted emerging domains such as artificial intelligence and technology as key areas where transatlantic cooperation will be critical.
Reflecting on Greece’s economic trajectory over the past decade, Pierrakakis presented the country as a case study in fiscal consolidation and structural reform. Key drivers of this recovery, he argued, include political stability, a consistent reform agenda, and the digitization of the state – exemplified by the Gov.gr platform, which has transformed public administration and improved tax compliance.
However, he cautioned that Greece’s experience also highlights the cost of delayed reforms. “There are lessons to learn – but also lessons on what to avoid,” he noted, referring to the prolonged adjustment period the country endured.
Hungarian elections
Pierrakakis also addressed the elections in Hungary, welcoming the victory of a more pro-European government as a positive step for EU coordination.
He noted that Hungary’s previous stance had at times slowed down collective decision-making, particularly on issues such as support for Ukraine and broader policy alignment within the EU. With the new government in place, he expressed confidence that decision-making would accelerate and cohesion within the EU would improve.
“The presence of pro-European governments across member states facilitates progress on critical issues,” he said, adding that he looks forward to close cooperation with Hungary’s new finance minister.
At the same time, he stressed that Europe must strengthen its strategic autonomy and avoid repeating past mistakes by moving more decisively in areas such as energy integration, the removal of internal barriers and investment coordination.