The European Commission has issued a stark warning about the economic fallout from the ongoing war in the Middle East, estimating that up to 1.3 million jobs across the European Union could be lost. The alert came from Roxana Mînzatu, European Commissioner for Jobs, during the presentation of the 2026 Spring Semester Package, a biannual report that sets out economic priorities for the bloc's 27 member states.
"Due to the war in the Middle East, up to 1.3 million jobs are at risk, particularly in energy-intensive industries," Mînzatu told journalists in Brussels. She added that the surge in energy prices, triggered by the conflict that began with Israeli and US strikes on Iran in late February, is disproportionately affecting vulnerable households. "Increased energy costs will have a particular negative impact on lower-income households in Europe, which is why we recommend that all member states take targeted measures to support vulnerable groups," she said.
The conflict has already slowed European economic growth and pushed inflation higher, according to the Commission's latest economic forecasts from May. The European Bank for Reconstruction and Development has also revised its growth projections downward, citing the energy shock from the Iran conflict. The Commission's report highlights sharp disparities in growth and inflation across the EU, which it views as a threat to the bloc's overall competitiveness.
Skills Shortages and Working Conditions
The Semester Package dedicates considerable attention to employment, focusing on promoting quality jobs and addressing persistent shortages of skilled workers in strategically important sectors. "Improving educational outcomes and better aligning people's skills with labour market needs remain key priorities, also to address labour and skills shortages which are particularly acute in strategic sectors such as cybersecurity, quantum, artificial intelligence and semiconductors," the document states.
Mînzatu noted that 77 percent of European companies report that skill shortages are a significant barrier to investment. She identified poor working conditions as the main driver of these shortages. "We cannot attract talent, we cannot reduce shortages, we cannot improve people's earnings without making sure we have good working conditions," she said.
Competitiveness as a Core Priority
Since the start of her mandate, European Commission President Ursula von der Leyen has made competitiveness a top priority amid mounting geopolitical uncertainties. The latest Semester Package reflects this focus, outlining how Europe can strengthen its global position. Key measures include reducing economic barriers within the single market, creating a more business-friendly environment for companies and capital, and minimising strategic dependencies—particularly on China and the United States.
The Commission is urging member states to adopt a more robust industrial policy, increase investment in capital markets, and pursue a simplification agenda to reduce administrative burdens in both the private and public sectors. However, progress depends heavily on the willingness of member states to act, a longstanding coordination challenge that the Commission acknowledges.
The warning about job losses comes as the OECD has warned of recession risks if the Iran conflict persists, cutting its 2026 growth forecast. The Commission's report underscores the urgency of coordinated action to protect European jobs and maintain economic stability.
