Eurogroup President Kyriakos Pierrakakis has warned that fiscal policy across the eurozone must align with the European Central Bank's efforts to curb inflation, as the ECB prepares to raise its key interest rate by 25 basis points to 2.25% on Thursday. Speaking on Euronews' Europe Today, Pierrakakis stressed that finance ministers need to strike a careful balance: providing support to households and businesses without adding to broader price pressures.
“While we do not comment on monetary policy, we trust the ECB to fulfil its role in anchoring inflation expectations,” Pierrakakis told Euronews' Europe Editor Maria Tadeo on the sidelines of a Eurogroup meeting in Luxembourg. He added that governments “should implement policies that do not run counter to monetary policy.”
Italy Demands Flexibility as Energy Costs Surge
The conflict in the Middle East, particularly the closure of the Strait of Hormuz—which carries one-fifth of global oil supply—has sent energy prices soaring across the bloc. Rome is leading calls for Brussels to treat the energy crisis as an emergency comparable to defence, exempting related spending from EU deficit calculations. In a letter to the European Commission last month, Italian Prime Minister Giorgia Meloni and Finance Minister Giancarlo Giorgetti urged the relaxation of fiscal rules for energy measures.
Under EU rules, member states must keep their deficit below 3% of GDP. Both the European Commission and the International Monetary Fund have advised that any support should be “targeted and tailored” to the most vulnerable, rather than broad-based subsidies. The IMF has also urged eurozone fiscal tightening as high-debt nations seek relief.
Pierrakakis acknowledged the divisions among the 27 member states. “There are different viewpoints around the table,” he said, adding that his role is to forge a “consensus.” Italy is expected to renew its push for flexibility at the Eurogroup meeting and at a summit of EU leaders next week, where Council President António Costa has placed “the latest developments in the Middle East, including the conflict in Iran and its broader implications, notably energy prices” on the agenda.
The United States has intensified military and economic pressure on Tehran through Operation Epic Fury, but the regime has kept the strait shut. Overnight, Iran and the US exchanged fire, with President Donald Trump vowing to make the regime “pay the price.”
Long-Term Investment Over Short-Term Fixes
Pierrakakis argued that Europe must invest more in its own energy infrastructure to reduce dependence on volatile external supplies. “We know that the best social policy is to lower energy prices over the long term, rather than relying on short-term fixes,” he said. He described the Commission’s proposal for additional flexibility to support energy investment as “a very targeted and fair approach.”
This push for energy autonomy echoes broader calls for strategic independence. As the EU environment chief has argued, climate policy is now defence policy. Pierrakakis linked energy investment directly to Europe’s freedom: “Just as defence investment is key to safeguarding Europe’s freedom, investing in energy infrastructure is essential to our economic independence.”
The Eurogroup president’s remarks come as the ECB under Christine Lagarde continues its tightening cycle, and as finance ministers grapple with the twin challenges of inflation and energy security. The outcome of next week’s summit will signal whether the bloc can maintain fiscal discipline while addressing the immediate pain of high energy costs.
